Meghnagi v London Borough of Hackney

This is an application for permission to appeal against a decision of the Lands Tribunal as to the amount of compensation that Mr Meghnagi should receive pursuant to the compulsory purchase of his freehold interest in a house at 24 Lea Bridge Road, London, E5. The valuation date was 13 November 2000. The amount that he claimed was ₤320,000. The respondent authority’s valuation was ₤120,000. The Tribunal awarded a sum of ₤147,500.

At paragraph 9 of the decision, Mr Rose, the Tribunal member, rejected Mr Meghnagi’s figure of ₤320,000 on the basis that Mr Meghnagi had no valuation experience and did not produce any reliable evidence to support his assertion. Mr Craig was instructed to value the property on Mr Meghnagi’s behalf in December 2001, and he reported that in his view it was worth ₤240,000 in its condition at that time. Mr Thomas, on behalf of the authority, valued the property at ₤120,000. Mr Rose said that he obtained little assistance from the comparable evidence submitted by the experts, and said at paragraph 13 that the most reliable starting point was the price of ₤133,150 which the authority obtained in April 2002.

The main thrust of Mr Meghnagi’s complaint is that the respondent authority did not set about marketing the property in the most effective way. He has identified some ten factors which he argues were relevant to the question of whether the authority had gone about the selling of the property in the most effective way; factors which he says should have been taken into account by Mr Rose but were not. In particular, he emphasises the fact that the authority required a financial bond of ₤80,000 from the would-be purchasers; that, he says, would have had a depressing effect on the price that they were prepared to offer, and was a grossly excessive figure to require as a bond to ensure that the defects in the property which had given rise to the compulsory purchase order in the first place were made good. He also says that the property should have been auctioned; having decided not to auction but to seek competitive tenders, the authority also depressed the price that was likely to be offered by would-be purchasers by requiring the tenderers to attend for interview. There are various other matters of which Mr Meghnagi makes complaint relating to the way in which the property was marketed; all of which, he says, were likely to depress the price at which the property was sold.

Paragraph 13 of Mr Rose’s decision refers to the fact that the authority instructed auctioneers to offer the property for sale in its dilapidated state, and that those auctioneers in a report of 21 November 2000 said that the adjoining property, number 26, which had been auctioned in May 1999 for ₤136,000, was clearly in a better state than the subject property, Number 24, and that they suggested a guide price that they would recommend of a figure of ₤70,000-plus. That figure hardly supports the suggestion that an auction would necessarily have led to an offer significantly higher than the figure at which Mr Rose ultimately awarded compensation.

Mr Rose explains at paragraph 15 that the reason why the authority decided not to go to auction was that the authority wished to be able to exercise control over the identity of the purchaser, in order to ensure that the property would be rapidly restored to residential occupation in accordance with its strategy for dealing with empty properties. Mr Rose clearly accepted that that was a reasonable strategy to adopt in the circumstances. In my judgment, he was entirely justified in so doing. I would, therefore, reject the argument that Mr Rose was in error in some way in not assessing compensation on the basis of sale by auction.

15 bids were received; the highest was ₤135,000, the next highest was ₤133,150, the next ₤130,000, and the next highest was only ₤100,000. These figures were no doubt explicable by the fact that, as Mr Rose said at paragraph 19, he was satisfied that the building was derelict and dangerous. He considered that the sparse description provided in the tender particulars would have encouraged prospective purchasers to overestimate the extent of building work required. That belief would also have been fuelled by the fact that the bond of ₤80,000 was required.

It was for that reason that Mr Rose came to the conclusion that the highest tender offer underestimated the value of the property by a percentage; he assessed that percentage at 15%, because, as he put it, the highest tender offer assumed that the cost of the necessary building works was significantly higher than in fact it was. That is how he arrived at his figure of ₤147,500. He referred to the only other item of evidence which seemed to him to provide assistance, namely the ₤136,000 paid at auction in May 1999 for Number 26, and he explained why he did not consider that that evidence was of sufficient weight to justify an adjustment to his figure of ₤147,500, and he gave two reasons for this in paragraph 25 which seem to me to be perfectly sound and justifiable reasons for so concluding.

The only other point of substance made by Mr Meghnagi is that there was in the papers before Mr Rose and there is before me a letter dated 30 August 2000 from a Mr Lubelsky to Mr Meghnagi which purports to be an offer to buy the property for ₤195,000. Mr Lubelsky, apparently, was unwilling to come to give evidence before Mr Rose. Mr Meghnagi tells me that he asked Mr Rose to issue a subpoena requiring him to do so. At paragraph 26 of his decision, Mr Rose refers to the letter from Mr Lubelsky. He says:

“Rather surprisingly, that offer was made some months after the CPO had been confirmed, and shortly before the acquiring authority proposed to take possession of the property. Mr Lubelsky was not prepared to give evidence explaining his offer, and I attach no weight to it.”

It is true Mr Rose does not explain there why he refused to issue a subpoena, but it is clear enough that in the circumstances where Mr Lubelsky was not prepared to give this evidence, and having regard to the date of the letter, Mr Rose was not prepared, as he put it, to attach any weight to it. In my judgment, he was entitled in the exercise of his discretion to take that approach to Mr Lubelsky.

Standing back from this matter, I consider that Mr Meghnagi’s complaints are really no more than a disagreement with Mr Rose’s valuation. Valuation, as Mr Rose himself said, is a necessarily imprecise exercise. In my judgment, there are no substantive causes for criticism of his decision, and the points that Mr Meghnagi wishes to make would in my judgment not have any real prospects of success on an appeal.

Therefore, I refuse permission to appeal.