Landlink (Stoke Mandeville) Ltd v The Secretary of State for Transport

Until 18 May 2022, the claimant, Landlink (Stoke Mandeville) Ltd, owned 27 acres of undeveloped land about half a mile south of the village of Stoke Mandeville in Buckinghamshire. Part of the land was allocated in the local plan for use as housing for older people and planning permission would have been available for the development of an ‘integrated retirement community’ (an ‘IRC’) providing 162 units of accommodation for older people immediately adjoining Risborough Road.

On 18 May 2022, as part of the wider HS2 Project, the Secretary of State for Transport permanently acquired 2.7 acres of the claimant’s land by a general vesting declaration made under powers conferred by the High Speed Rail (London – West Midlands) Act 2017. The land was required for the diversion of Risborough Road to form a new Stoke Mandeville Bypass. Part of the claimant’s land was also taken temporarily while the works to create the new bypass were undertaken.

The purpose of this reference is to determine the compensation payable to the claimant for the taking of its land which has prevented it from developing its proposed 162 unit retirement village. The reference includes an appeal by the claimant under section 18 of the Land Compensation Act 1961 (the 1961 Act) challenging a negative certificate of appropriate alternative development issued by the local planning authority following an application by the claimant. That appeal is not contentious, as the respondent agrees that, but for the compulsory acquisition, planning permission would have been available for the 162 unit retirement scheme in May 2022.

It is agreed in principle that compensation is now payable for the value of the land taken, for diminution in the value of the land retained by the claimant, which can no longer accommodate the 162 unit scheme, and for disturbance. At the conclusion of the evidence the claimant valued its claim at a little under £12.8m, while the respondent considered the appropriate compensation sum was a little over £6m.

The claim is brought under section 5 of the 1961 Act in respect of the land permanently acquired by the Secretary of State and under section 7 of the Compulsory Purchase Act 1965 (the 1965 Act) in respect of injurious affection of the land retained by the claimant. The valuation date in respect of both heads of compensation is agreed to be 18 May 2022. It is also agreed that the Tribunal should allow the claimant’s appeal under section 18 of the 1961 Act and grant a certificate of appropriate alternative development, or CAAD, in respect of the claimant’s 162 unit retirement village (“the CAAD Scheme”).

Claims for compensation under section 5 of the 1961 Act and section 7 of the 1965 Act arise out of the same acquisition but are claims to recover different loss in respect of different land. As we will explain, the rules which govern their assessment are materially different. Notwithstanding those differences, the consensus between the parties in this reference has been that the most convenient way of assessing compensation under section 5 and section 7 is to adopt a single “before and after” valuation, looking at the value of the claimant’s interest in the round before and after part of its land was taken, with the amount of compensation payable being the difference between the two figures. The parties have proceeded on the basis that the value of the claimant’s original 27 acre holding (‘the Site’) should be assessed first, making the assumptions required by section 14, of the 1961 Act, including that the HS2 scheme had been cancelled and that planning permission had been granted on the valuation date for the CAAD Scheme. This is the “before” value. The value of the land remaining to the claimant after the permanent acquisition should then be determined; in making that assessment no assumption is required to be made about planning permission since in reality there was none on the valuation date. This is the “after” value. By deducting the second figure from the first a sum is arrived at which is said to reflect both the value to the claimant of the land taken permanently from it, and the reduction in the value of the land which it retains. The valuation date for both elements of this calculation is the same, namely, 18 May 2022.

The parties’ methodology combines in a single calculation their assessment of the value of the land taken with their assessment of the damage caused by severance. That is not the approach contemplated by the statutory scheme. The statutory code assumes separate calculations of different sorts of loss. Whether the parties’ approach affects the amount of compensation which is determined is not obvious, but it may give rise to additional complexities which the parties have not appreciated, especially regarding the effect of events occurring after the statutory valuation date for the purpose of rule 2.

The claimant was represented at the hearing of the reference by Ms Tafur KC and Ms Noble, and the respondent by Mr Westmoreland Smith KC and Mr Brett.

Factual evidence about the circumstances of the acquisition and pre-reference exchanges between the parties was given by Mr Gerald Knight and Mr Simon Mole. Mr Knight has been involved with the site on behalf of the claimant since 2008 and is a director of Hambledon Land (Stoke Mandeville) Ltd (‘Hambledon Land’), which is itself a corporate director of the claimant. Mr Mole is a chartered surveyor and his firm, Montagu Evans, provide valuation, compensation and land acquisition services to the Secretary of State in connection with the HS2 project. He has been responsible for the management of this claim on behalf of the Secretary of State since November 2022.

We also received expert evidence in relation to highways, planning, development costs and valuation. Evidence on highways design was given in writing by Mr Phil Bell MCIHT, and Mr Ben Dawson MCIHT who reached agreement on the matters on which they were asked to express an opinion. Planning evidence was given by Mr Roger Hepher FRICS MRTPI of hgh Consulting and Mr David Mabb MRTPI of Montagu Evans. Evidence on building costs was provided by Chartered Quantity Surveyors, Mr Joseph Smith MRICS of Stockdale LLP and Mr Babak Erfani MRICS of Quartz Project Services. Finally, valuation evidence was given by Mr Iain Lock MRICS of Cluttons and Mr Will Seamer MRICS of Montagu Evans.

We are grateful for the assistance of all who participated in the preparation and presentation of the reference.

The route of the new HS2 railway passes close to Stoke Mandeville, crossing the main road between Princes Risborough and Aylesbury just southwest of the village. The construction of the new railway therefore necessitated substantial changes to the road network in the area including the creation of a new Stoke Mandeville bypass to the west of the village. The new bypass begins at its southern end at a point adjoining the claimant’s land.

As it was originally configured, the Site comprised a single 27 acre parcel of open grass meadows on the southern side of Risborough Road having a frontage to the road in two places. The longer of the two frontages extended to about 220 metres at the northern end of the site. There was a gated access to the land in that area, with another access further south on the second shorter stretch of frontage to the road. Most of the roadside land between the two frontages was also once part of the claimant’s holding and before that had been the site of an agricultural research facility which had closed in the 1980s. The claimant began to promote this previously developed part of the Site in 2008 and by 2011 had secured planning permission for its redevelopment. In 2014, after it had passed into separate ownership, a new residential care home known as Fremantle Court opened on the site of the former research facility. A dwelling known as Longacre separates Fremantle Court from the remainder of the claimant’s land. The general layout of the land in the area before the road was constructed is shown on the plan below, with the claimant’s land edged in red.

At the valuation date, the claimant’s land straddled the boundary between two local planning authorities, shown by the green line on the plan above. Of the 27 acres left after the disposal of Fremantle Court, approximately 8 acres situated at the northern end of the Site and adjoining Risborough Road lay within the area covered by the 2013-2033 Vale of Aylesbury Local Plan (‘the Local Plan’). It was in this location that the claimant envisaged its retirement village scheme being developed. The remainder of the land was within the Wycombe local plan.

In 2018, through his company, Hambledon Land, Mr Knight began to promote the 8 acre site as suitable for allocation under the Local Plan for development under Class C2 (residential institutions) of the Town and Country Planning (Use Classes) Order 1987. A scheme was drawn up which included a development of 110 to 115 independent living units for older people in a retirement and care community including a swimming pool, restaurant, and other communal facilities. The remainder of the claimant’s land was envisaged as a nature reserve to which the public would have access.

When the Local Plan was prepared in draft, no part of the Site was allocated for development, but the Inspector appointed to consider the proposals believed they made insufficient provision for accommodation for older people, and the District Council was obliged to revisit the draft. An opportunity to secure an allocation for the Site therefore presented itself after publication of the Inspector’s interim findings. In the Local Plan’s final form as adopted in September 2021, a belt of land adjoining Risborough Road totalling 11.8 acres and including not only the 8 acres belonging to the claimant but also the adjoining Fremantle Court and Longacre, was allocated under Policy H6b for approximately 100 units of C2 older people's accommodation for delivery in the period 2020-2025.

Proposals for the construction of a relief road around Stoke Mandeville are not new and were known to the claimant when it prepared its original scheme for a retirement village of 110 to 115 units. At that stage Mr Knight understood that the new road would require 1.7 acres of the Site, and the scheme was designed and promoted in that expectation. In the event, the design of the new bypass was not sufficiently advanced to provide clarity over the area required for construction. For that reason the Secretary of State’s general vesting declaration of 4 August 2021 authorised the acquisition of all of the land up to the limits permitted by the 2017 Act and on 18 May 2022 the claimant was permanently deprived of a total of 2.7 acres (‘the Acquired Land’).

The Acquired Land bisected the 8 acres of the claimant’s land that were subject to development proposals, and left it with a triangular parcel of only 1 acre on the northern side of the route of the new bypass, and a larger parcel extending to 4.3 acres on the southwestern side. The smaller area has been referred to in the evidence as ‘the Severed Triangle’, while the area to the southwest of the bypass has been designated ‘the Southern Retained Land’. The combined holding, totalling 5.3 acres in two parcels, is referred to as ‘the Retained Land’.

The new bypass was opened to traffic on 5 November 2025. The final extent of the adopted highway has not yet been confirmed, but because more land was taken for the road than was eventually required, it is apparent that the Secretary of State will be left in possession of a narrow strip of land running along the frontage of the claimant’s Southern Retained Land and separating it from the bypass. No rights of way were reserved in the claimant’s favour over the Acquired Land when it was taken so this ‘Land Strip’, as it has been called, will remain as a barrier to access between the adopted highway and the Southern Retained Land unless some new permanent arrangement is made.

Before the claimant was deprived permanently of the Acquired Land by the general vesting declaration, it had already been dispossessed on a temporary basis of an area comprising a fraction over 5 acres. This ‘TP Land’, as it has been called, comprises a narrow strip on either side of the Acquired Land together with a larger area of several acres extending into the Southern Retained Land. This larger area was originally earmarked as a works compound although it has never been used for that purpose, and a hard surface was laid from the route of the bypass to create a new access to it.

Possession of the TP Land was taken by the Secretary of State on 21 October 2019 and by the date of the hearing it remained in her occupation with no date yet having been identified for its return. Strictly, the Secretary of State is entitled to retain the TP Land for up to a year after the whole of the works permitted by the 2017 Act have been completed. We have not been asked to assess compensation for the taking of the TP Land and its only relevance arises from the rights which the Secretary of State continues to enjoy over it and the obligations to which she is subject. Those include an obligation to restore the TP land in accordance with a scheme which has yet to be proposed by the Secretary of State or agreed by the claimant, and an entitlement to enter and resume temporary possession of the TP Land within 20 metres of the new bypass for the purpose of maintenance for a period of five years. The route of the new road is shown below, with the TP Land in yellow.

As explained, the parties’ preferred way of determining the compensation to which the claimant is entitled is by deducting the value of the Retained Land after the acquisition from the value of the Site as a whole before any of it was taken. In arriving at the before value they have made the counterfactual assumptions required by the 1961 Act. Thus, in accordance with section 14(3)(a), planning permission is taken to have been in force at the valuation date for the claimant’s CAAD Scheme (which is now agreed to be appropriate alternative development); as required by section 14(5), the HS2 scheme is also taken to have been cancelled on the launch date (23 November 2013) and no action has been taken by the Secretary of State for the purpose of the HS2 scheme, including works in connection with the bypass. Neither of these assumptions gave rise to any issue in this reference.

The parties’ common approach was to value the Site adopting the residual method of valuation on the assumption that planning permission already existed for the 162-unit CAAD scheme and employing the ‘Argus developer’ software to undertake the necessary calculations. They then each considered the credibility of the resulting site value by reference to other land sales as a sense check.

Many of the components of the residual valuation were agreed between Mr Smith and Mr Erfani, the parties’ quantity surveying experts, and Mr Lock and Mr Seamer, the parties’ valuation experts, and only three inputs remained in issue at the start of the hearing. Those were, first, the additional cost, if any, that should be assumed would be required to deal with any contamination of the Site arising from activities of previous occupiers; secondly, whether the general build cost for the CAAD scheme should be adjusted to reflect exceptional ‘special market forces’ which were said to be operative at the valuation date; and thirdly, the rate per sq ft that should be applied to the 162 units to arrive at a gross development value for the Site.

Between 1946 and 1984 the Site was used, together with the land now occupied by Fremantle Court, by British Oil and Cake Mills Ltd (‘BOCM’) as a facility for the testing of animal food products. Lawful Development Certificates issued in 1995 by the local planning authorities described the following uses on the land: the intensive keeping and breeding of poultry, pigs and rabbits; trials of animal feedstuffs, bedding and animal housing; trials of husbandry and veterinary techniques, including progeny testing and artificial insemination; pathological investigation of dead animals; the annual European Poultry Fair; and a display of animal housing, techniques and results of trials to visitors from within and outside the farming industry.

Historic plans and photographs of the land occupied by the research facility show a collection of buildings, mostly at the southern end of the Site and on what is now Fremantle Court. They also show what appear to be roads or tracks extending across the Site and into the nature reserve.

When Mr Smith and Mr Erfani were first asked to agree the construction costs for the CAAD Scheme, they adopted a figure of £100,000 for facilitating works, which included the cost of removing any potentially hazardous or contaminated material. They also agreed the cost of providing the substructure of the proposed buildings, at a rate of £13 per sq ft, a figure which assumed that the spoil or ‘muck’ excavated for the foundations would comprise only inert material which would be carted away for disposal off site.

At a later stage, Mr Erfani’s position shifted. He introduced an additional specific cost for the removal of potentially contaminated (but non-hazardous) material under or close to what he took to be the concrete access roads or tracks shown crossing the Site on the historic plans. He measured these as extending to 1,030 metres and assumed they had a width of three metres, that it would be necessary to excavate them to a depth of one metre, giving rise to 3,090 cubic metres of spoil which would require to be taken away at a cost of £240 per cubic metre. He therefore added £741,000 to his cost plan, over and above the £100,000 for facilitating works which had initially been agreed with Mr Smith.

Mr Erfani explained that the historic use of the research facility by BOCM and the results of ground investigations conducted in 2003 raised significant concerns that the Site might be contaminated. He formed that opinion before he had access to the results of any ground investigations, bore holes or window samples, and based his view on three documents: a February 2003 environmental report commissioned by Landlink prior to its purchase of the site (‘the 2003 Report’); a November 2010 Planning Statement prepared as part of the planning application for Fremantle Court (‘the 2010 Statement’); and an October 2024 Phase 1 desk study, prepared by the authors of the 2003 Report for the purpose of the CAAD application (which post-dates the valuation date).

The soil sampling recorded in the 2003 Report mainly focussed on the area of Fremantle Court, but three shallow samples were taken from the Site. These did not indicate contamination. The 2010 Statement did refer to ‘hotspots of contamination’, but Mr Erfani agreed that since this document relied on the soil sampling recorded in the 2003 Report, any such hotspots were not on the Site.

The 2024 desk study described the risk of contamination as low in every respect. The Site was said never to have been developed and as having always been agricultural open fields. No potential areas of concern were identified on the Site from point sources of contamination such as bulk fuel tanks, or chemical storage, and the only potential risk was considered to be from “encountering imported made ground along access routes across the fields.”

A further report from the same consultants and dated 6 May 2026 was not available to Mr Erfani when he prepared his written evidence. The purpose of this report was to verify whether any soil contamination or man-made materials are present on the Site, paying specific attention to the tracks which may have been associated with the previous occupation. Two trial pits had been dug: TP1 on one of the tracks crossing the Site over what is now the Southern Retained Land; and TP2 on what is now the Severed Triangle. The trial pit analysis led the consultants to conclude that the Site posed a very low risk of contamination.

On reflection, Mr Erfani accepted that any concerns relating to contamination would not be significant, and that there would be a very low risk of contamination. He also acknowledged that around half of the length of the track crossed land earmarked for the nature reserve and would not require excavation in any event, and that any imported material beneath the tracks would be to a depth of less than half a metre, rather than the one metre he had assumed. Thus, he very fairly accepted that his figure of £741,000 could be reduced by three-quarters. As this was a specific, quantified figure, Mr Erfani maintained that the appropriate way to deal with it in a costs plan was to include it as a specific line item, rather than leaving it to be met by the contingency.

Based on the agreed evidence that there is a very low risk of any developer encountering land contaminated by imported material on the Site, in our judgment a prospective purchaser of the Site would have been content to leave the risk to be accommodated in the construction contingency. Even if they had a potential cost of up to £185,250 in mind as a possibility, being one quarter of Mr Erfani’s original figure, that would represent something in the order of 5 or 6% of the construction contingency. Mr Erfani’s evidence was that ground conditions are often the greatest risk for a construction project and a developer would have regarded the low risk as adequately covered. We therefore include no specific item for the cost of dealing with potential contamination.

In assessing the costs of constructing the CAAD Scheme Mr Erfani proposed a further allowance. His position throughout has been that an adjustment to ‘book rates’ must be made to reflect the unique circumstances at the valuation date, when prices were affected by the combination of the Covid pandemic, Brexit, and Russia’s invasion of Ukraine.

It was common ground that at the valuation date, build costs were experiencing significant market inflation, labour and material volatility due to the effects of the pandemic, Brexit and the Ukraine/Russia conflict. The impact of these events on labour and materials costs, and the uncertainty they created, made contractors across the UK construction sector more risk adverse and led them to increase their costs substantially.

Mr Smith, who we found to be an objective and credible witness, based his build costs on rates from Spon’s Architects’ and Builders’ Price Book, with the RICS BCIS rates as a sense-check. Both are perfectly acceptable and reliable sources of build costs and are often used in the Tribunal. He had used a 2021 publication of Spon’s, which included forecast inflationary increases. We are satisfied that these anticipated inflationary increases did not account for unforeseen price shocks from significant national or international events and so the resulting figures did not reflect costs in the market at the valuation date.

Mr Erfani had the advantage of direct experience in the retirement village sector, providing cost advice to clients at six sites across the country. His initial costs were based on his in-house data, generated from the development of retirement villages over 12 years, and using BCIS indices to adjust for time. He explained that, at the valuation date, he and his firm were including risk percentage allowances in their cost plans and advising clients in the market to include a 2-5% cost uplift. He had originally accounted for this in a 10% contingency, but he changed his approach when the parties reached agreement on a contingency figure independently of him. Instead he reflected price volatility by adding a percentage uplift at the bottom of the range which he was suggesting to clients in the market around the valuation date. We accept his evidence and will calculate build costs including his 2% uplift to reflect the unique market circumstances at the valuation date.

Like the costs experts, the valuers made substantial progress in agreeing all but one aspect of the notional gross development value of the CAAD Scheme; the remaining issue was the rate to be applied to the floor area of the completed units to arrive at the assumed sales price of the individual retirement homes. The extent of the disagreement was narrow. Mr Lock for Landlink adopted a value of £615 per sq ft, while Mr Seamer for the Secretary of State was at £600 per sq ft.

We mention at this point that Mr Seamer was criticised by Mr Lock for his unwillingness to ‘split the difference’ between their respective figures. Correspondence between the experts debating the point was included in Mr Lock’s evidence. This was improper and should not have occurred. As we pointed out at the start of hearing, discussions between experts are conducted without prejudice and are confidential. An expert is not entitled to exhibit correspondence with their opposite number in which they seek to narrow their differences without the other expert’s specific consent, which was not requested by Mr Lock in this case. In any event, as Mr Seamer considered £600 per sq ft to be at the top of the range of possible values we make no criticism of him for not being willing to go further.

Both experts were experienced valuers, but Mr Lock had greater experience in the IRC market; on many occasions during his evidence, he was able to draw on his personal knowledge of a comparable site, having bid for or advised clients about it.

The experts agreed that two comparable IRC sites were of assistance in determining the sales prices which a developer would expect to achieve for completed units in the CAAD Scheme. The first was Wycliffe Park, a development by Audley Villages in Stokenchurch, 14 miles south of the reference land; the other was Millfield Green, developed by Inspired Villages at Caddington, near Luton, 20 miles to the north-east. On the day of our site inspection of the reference land, we also visited both comparables.

Wycliffe Park is a large 25-acre development of 156 C2 units, completed in September 2023 but which was being marketed at the valuation date. By September 2024, 29 units had been sold, some off plan. Facilities include a health club, swimming pool, library, restaurant and bar. It is agreed that the CAAD Scheme for which planning permission must be assumed to have existed is of similar quality to Wycliffe Park.

The experts agreed that the average asking price of units at Wycliffe Park at the valuation date analysed to £634 per sq ft. There are two reasons why these prices are relevant. First, because they were set by a developer in the relevant market and can be taken to have been influenced by and to reflect all of the circumstances of that market. And secondly, because the hypothetical purchaser of the reference land would have been aware of the asking prices at Wycliffe Park and would have taken them into account when deciding what to bid for the Site.

Based on his experience of the IRC market, Mr Lock assumed that a developer would expect sales prices on their own site would be 3% below asking prices. Mr Seamer relied on evidence of average sales prices achieved at Wycliffe Park which were 4.2% less than asking prices, at £608 per sq ft.

The parties disagreed on the relevance of the sales prices eventually achieved at Wycliffe Park. The earliest sale was in September 2023 and could not have been known to the market at the valuation date. The potential significance of the achieved sales prices is in what they show about the relationship between asking prices and sales prices.

Mr Westmoreland Smith KC submitted that it was permissible to have regard to post valuation date evidence as an indicator of what the hypothetical parties to a transaction would have agreed, relying on the decision of the Tribunal in Bishopsgate Parking (No.2) Limited v The Welsh Ministers [2012] UKUT 22 (LC), at [58-63].

In Castlefield Property Limited v National Highways Limited [2023] UKUT 217 (LC), the Tribunal commented, at [21], that:

“As a general rule, without an express contractual or statutory instruction to do so …. it would always be wrong to value land as if with knowledge of matters which were not known, and could not have been known, at the valuation date.”

More recently, in Chifley Holdings Ltd (BVI) v The Commissioners for HMRC [2024] UKUT 301 (LC), the Tribunal reviewed Bishopsgate and Castlefield, concluding:

“47.

[… ] First, events after the valuation date, which would not have been known to either the valuer or (because every valuation begs the question of what a property would have sold for) the hypothetical buyer and seller, should not be taken into account.

50.

Secondly, what can provide retrospective assistance is what comparable properties were selling for around or some months after the valuation date, especially in the case of a transaction on the subject property, or very similar properties in close proximity. In conjunction with pre-date transactions, these can help inform the valuer as to the state of the market in the months around the valuation date. I accept that there may be a tension between those two principles, to the extent that some transactions might have been affected by impermissible events, and in that respect the valuer must be alive to outliers or sudden changes in market levels that might have been affected by post-date events, for instance a general election or a change to interest rates. The valuer must make a judgement as to whether the market, at the valuation date, anticipated a future event, which would be legitimate to take into account. With the passage of time, some market expectations become reality and some do not, and it is necessary to consider with any post-valuation date evidence whether something has changed in the intervening period which undermines the reliability of the evidence as a measure of value of the subject property at the valuation date. As ever, valuation is an art.”

There are two reasons why, in our judgment, the evidence of sales prices achieved at Wycliffe Park is of no assistance in this case. First, the evidence shows that the market was volatile between the valuation date and the sales dates of the Wycliffe Park units and it is probable that the sales values were affected by events unforeseen at the valuation date. Mr Lock suggested that the market turned very sharply after the Government’s 2022 Autumn Statement and referred to the repeated increases in Bank of England base rates which rose from 1% in September 2022 to 5.25% 12 months later. The sales prices achieved at Wycliffe Park are likely to have been influenced by those events and cannot be taken to reflect market circumstances or expectations at the valuation date. Secondly, the valuation question with which we are concerned at this stage is not a question about the price at which units in a retirement village would have been sold; it is rather a question about the prices at which a developer would expect to be able to sell those units and which it would incorporate into its development appraisal. The answer to that question depends on how developers behaved in the market at the valuation date, not on how purchasers of individual flats behaved, and cannot be illuminated by evidence of individual sales achieved 18 months or more after the valuation date.

Mr Lock was operating in the market around the valuation date, advising clients and observing behaviour and we place weight on his evidence about the levels of discounts and incentives which developers were expecting to have to give to achieve sales. We are satisfied the developer would have assumed that sales prices would be 3% below asking prices as Mr Lock suggested. Accordingly, the developer would expect that Wycliffe Park asking prices averaging £634 per sq ft would convert to sales prices in the order of £615 per sq ft. No indexation to that valuation date figure is required, but the purchaser would consider locational factors, to which we next turn.

The experts could not agree on whether, in general, property values in Stoke Mandeville were higher or lower than in Stokenchurch. Mr Lock’s strong view was that a comparison of general house prices in a locality is of little assistance in assessing relative values of IRC developments. Mr Seamer took the opposite view. Despite his misgivings about its utility, Mr Lock engaged with the exercise suggested by Mr Seamer. He referred to average prices reported by Rightmove which were £527,444 for Stoke Mandeville and £422,833 for Stokenchurch, suggesting Stoke Mandeville was the more valuable area. But he recognised that this data was skewed because sales in Stoke Mandeville were predominantly of detached houses while in Stokenchurch they were mostly of flats. The geographical boundaries used by Rightmove were also unexplained and appeared inconsistent between the two locations.

Mr Seamer carried out an analysis using Land Registry data for detached and semi-detached properties within 3, 5, and 10 miles of the reference land and Wycliffe Park. This suggested that properties around Stoke Mandeville were between 11% and 23% lower than their equivalents around Wycliffe Park (or between 5% and 11% lower on a rate per sq ft basis, which Mr Lock preferred). For newly built housing within 5 miles of the two locations, in the 24 months leading up to the valuation date, Wycliffe Park averaged £591,075 or £411 per sq ft, while Stoke Mandeville values were lower, averaging £485,325 or £383 per sqft. Mr Lock carried out a similar exercise, with broadly consistent results.

What if anything does that tell us about the value of IRC units? Mr Seamer accepted that there was a significant premium attached to C2 values over general housing, partly because of scarcity and partly because of the amenities and services that come as part of the package. But he felt there was an important relationship between the wealth released by a recent property sale and the price that someone would pay for a retirement home. Mr Lock referred to Knight Frank’s ‘Seniors Housing Annual Review 2022/23’, which made that point and indicated that 81% of residents sold their home before moving into an IRC scheme, and that more than half of residents moved from within 10 miles.

We agree with Mr Lock that little can be taken from general house prices in the respective areas. We accept that Wycliffe Park is in a higher value location than the reference land, but that would have a limited effect on what purchasers would be prepared to pay for an IRC unit. In our view the general environment and surroundings would be a much more important influence on the relative value of different developments. As to that, the CAAD Scheme would have distant views to the Chilterns but would be in a much less secluded area than Wycliffe Park, which is accessed down a long private drive. Some of the blocks in the CAAD Scheme would be directly adjacent to Risborough Road and while others would overlook the nature reserve the environment of the development as a whole would be likely to be less attractive than Wycliffe Park.

Based only on the known asking prices at Wycliffe Park, the incentives and discounts from those asking prices which would have been anticipated at the valuation date, and the relative attractions of Wycliffe Park and the CAAD Scheme, we consider that a notional purchaser of the Site intending to develop it for the CAAD Scheme would not have been confident of achieving £615 per sq ft for the new units

Evidence of actual sales achieved at Wycliffe Park is inadmissible for the reasons we have already given but the experts agreed that sales averaged at £608 per sq ft. They each then adjusted that figure for time but used different indices and so reached no consensus. Mr Seamer relied upon Land Registry house price data for Buckinghamshire, which rose by 3.89% between the valuation date and September 2023. Mr Lock preferred the Nationwide House Price Index for the south-east, which indicated that prices fell. The choice of index made by each expert suited the interests of the party instructing them and illustrated the difficulty they each had in being objective. We did not find this part of the exercise helpful.

The other comparable development relied on by the experts was Millfield Green at Caddington, 20 miles to the north-east of the reference land. This is a more modest development than the CAAD Scheme, and has plainly struggled in worsening market conditions, with only the earlier phases having been constructed. The experts carried out similar exercises to those they had undertaken for Wycliffe Park, with similar inconclusive results. Both rated Millfield Green as less valuable than the CAAD Scheme, but they disagreed on how much less.

We place no weight on Millfield Green because of its distance from the reference land, and because the earliest transactions took place over two years after the valuation date, so that information about them would not have been available to a prospective purchaser of the Site and cannot be taken as any guide to what such a developer would have been prepared to offer for the Site.

We return to what was actually known at the valuation date. In our judgment, a well-advised purchaser of the reference land would have been aware of the Wycliffe Park asking prices, and would have adjusted them as Mr Lock suggested to arrive at an anticipated sales price for that development of £615 per sq ft. That figure would then have been further reduced to reflect Wycliffe Park’ relative advantages over the CAAD Scheme. Doing the best we can on the limited evidence, we are satisfied that for the purpose of their residual valuation the purchaser would take £605 per sq ft as the assumed value of the completed units.

Having now determined the three inputs to the residual valuation which remained in dispute, we can now calculate the value of the Site at the valuation date assuming the cancellation of the HS2 project and the existence of planning permission for the CAAD Scheme.

The Quantity Surveyors agreed the order in which contingencies, professional fees etc should be calculated. To the total cost of measured works, they both added preliminaries at 17%, then main contractor overheads and profit at 5%. To that sum project design team fees were added at 8%, and finally, to that sum, (i.e. including design fees at 8%), a contingency of 5% was added. Since these last two are compounded amounts, it does not matter whether the 8% design team fees or the 5% contingency is applied first. In the table at paragraph 66, design team fees are added first, which was how the Quantity Surveyors laid their costs out. In our residual appraisal below, and in the Appendix, contingency is added first, to replicate how the Valuation Experts presented their residual valuations. As we say, mathematically the outcome is the same.

In their Argus calculations, the valuers applied a construction cost sum which was inclusive of preliminaries and main contractors overheads. Mr Lock then adopted the method outlined above. His figure for costs, preliminaries and contractor’s profit was £61,733,981, which equated to £259.60 per sq ft, measured on a gross internal area basis (the same as Mr Smith’s final figure). He then added contingency at 5% (£64,820,680), and then professional fees at 8% to that amount, to arrive at £70,006,334.

Mr Seamer’s total was £63,156,666, or £265.67 per square foot on the same basis, accounting for Mr Erfani’s revision to his figure for contamination. To this, he added contingencies at 5%, or £3,157,833 to arrive at £66,314,500. However, instead of then adding 8% for professional fees to this figure (i.e. including contingencies), his 8% was applied to the net figure of £63,156,666. We think Mr Seamer’s costs, putting aside the issue of contamination and special market forces, understated the costs by approximately £252,000, and we use Mr Lock’s method.

Having rejected Mr Erfani’s contamination figure, but accepting his 2% for special market forces, we calculate the following, adopting the Quantity Surveyors’ agreed layout, and applying contingency and professional fees compounded:

For the purposes of the development appraisal, our construction cost per sq ft, before professional fees at 8% and contingency at 5% is £62,969,767, or £264.88 per sq ft.

Based on our conclusion that the appropriate sales rate would have been £605 per sq ft, we calculate a Gross Development Value of £106,613,705. The valuers also included as additional revenue a ‘deferred management fee’, which can be charged to occupiers by the operator of the retirement village when they wish to transfer ownership of their home. The agreed rate was 8.61% of Gross Development Value, and adopting the same figure adds £9,179,440, bringing the total revenue to £115,793,145.

It was common ground that furniture, fit out and warranties would total £924,000, s.106 costs would be £8,500, and that sales and marketing, agents and legal fees on disposals would be calculated at 1%, 1% and 0.5% respectively. Developers profit was assessed at 17.51% on cost, or around 16.18% on GDV (excluding DMF revenue).

Our calculation deducts from a total revenue of £115,793,145 costs before finance of £75,005,558. This comprises £66,118,255 construction costs including a 5% contingency, £924,000 for fit out and warranties, professional fees at £5,289,460, marketing, leasing and legal fees of £2,665,343, and s.106 costs of £8,500. Allowing for profit at 16.18% of revenue deducts £17,251,042.

The remaining inputs, to include finance, residual land value and acquisition costs come to £23,536,544. Calculating finance cashflow without sophisticated software is not straightforward and involves a degree of circularity. Mr Lock’s finance costs equated to 18% of his total costs before land value and developer’s profit, Mr Seamer’s was 16%. As a proportion of gross development value, the competing figures were 12.3% and 11.57%. We have taken a middle ground, which we acknowledge might not quite be the figure a specialist software package would produce, but in the light of the considerable swings in the experts’ views, outlined below, we are content with that as an approach. 17% of costs before land price and profit would equate to £12,750,944, which would equate to 11.96% of GDV. Deducting this would leave a gross land value of £10,785,600. Allowing for stamp duty at 4.9%, and acquisition fees of 1.5%, we arrive at a residual land value of £10,137,183, which we round to £10,150,000. That figure is equivalent to £62,654 per unit.

Our valuation, presented in the format adopted by the Valuation Experts, is included as an appendix to this decision.

As is always the case with a complex residual valuation, even a modest adjustment of some of the components of the calculation can have a large effect on the end result. By way of illustration, Mr Lock’s first residual valuation produced a land value of £17.5m, or £108,025 per unit; after taking account of further agreements reached over certain inputs, his final valuation was at £12.41m, or £76,614 per unit. Mr Seamer’s view also changed very substantially from £5.52m (£34,074), to £9.92m (£61,253). Given the variability inherent in the methodology it is desirable to look at such other evidence as may be available to provide a sense check.

The experts produced a schedule of comparable site sales as a sense check against the output of their residual valuations. While their analysis of this information changed during the process, the thrust of their evidence remained the same. We accept Mr Lock’s evidence, which Mr Seamer did not dispute, that in the period immediately preceding the valuation date the IRC market was a limited market, with a low volume of sales compared to other sectors, albeit the market players were active. Accurate analysis of site prices for comparative purposes, especially where information relating to a sale is limited, is therefore difficult. It is striking that each expert was prepared to amend his valuation by more than £4 million while continuing to claim support for his view from the same comparable evidence; this illustrates the difficulty and uncertainty of the exercise and limits the comfort that can sensibly be derived from it as a sense check.

In their first reports, Mr Seamer’s evidence produced an average land price equating to £66,056 per unit, Mr Lock’s average was £112,300. Sensible discussions then took place as further information came to light. Mr Seamer agreed Mr Lock’s adjustment of 20% if a site had been bought without planning permission, and an adjustment when part of a purchase price had been deferred. Indexation to reflect changes in value over time remained contentious. Mr Lock, in the absence of a specific IRC land index, used Knight Frank’s Residential Land Index to adjust the transactional evidence. Mr Seamer doubted the relevance of that index since it covered the whole country, and many factors can impact land value. Those do not seem to us to be persuasive objections, where the suggested alternative is to ignore indexation altogether, which would be inconsistent with the experts’ approach to gross development values.

Mr Seamer again placed weight on house prices within a three-mile radius of each location in the 12 months leading up to the valuation date. Mr Lock preferred to focus on five sites which he felt were most comparable to the reference land.

Both experts discounted as an outlier the sale of the site of Wycliffe Park, which analysed on Mr Lock’s method at £159,886 per unit, and on Mr Seamer’s at £139,171. The purchaser, Royal London, a new entrant to the market, paid a price which both experts considered excessive. Mr Seamer also excluded two Audley retirement villages at Ascot and Cobham, on the ground that these were both super-prime locations where house prices were well above £1m. Mr Lock agreed, but felt that, for balance, low value outliers should also be excluded.

Of the 20 transactions referred to, we can immediately discount two, located in Chester and Leeds, as being too distant for useful consideration. We also place no weight on five sites incapable of accommodating a development of 100 units because we accept Mr Lock’s evidence that a critical mass of 100-120 units is required if a full suite of facilities and services is to be offered at a reasonable cost per resident. Mr Seamer was unable to point to any sub-100 unit scheme in a rural location comparable to the reference land. We also discount McCarthy & Stone’s acquisition of Gentian Place in Aylesbury, as this was not for an IRC development. As for post-valuation date evidence, we discount Burston Nurseries in St Albans, and land at Slinfold, Horsham, both transactions six months after the valuation date, but we include two sales, at Braboeuf Manor in Guildford, and land at Waterlooville, both in June 2022 within one month of the valuation date.

This exercise leaves ten transactions, at an average of £68,800 per unit before indexation. Indexation can only be approximate (Mr Lock used a fairly broad-brush graph) and doing our best we estimate an indexed average of around £75,000 per unit.

It is apparent that the IRC market is one in which land valuation is far from an exact science. There are relatively few transactions, and those there are widely dispersed. Two competent and experienced valuers can reach very different conclusions, and then significantly revise their opinions. Our residual valuation equated to a unit value of £62,654 per unit. Having examined the comparative evidence we have concluded that it is not sufficiently robust, nor sufficiently at variance with our residual valuation to persuade us to adjust the figure produced using what is agreed to be the preferred method. We therefore conclude that the value of the Site on the valuation date with the benefit of planning permission for the 162-unit CAAD Scheme was £10,150,000.

The parties agree that the Southern Retained Land and the Severed Triangle should be valued separately.

The valuation of the Severed Triangle is relatively straightforward and it was disappointing that it was incapable of agreement especially given the huge adjustments the experts made to other aspects of their valuations which would have swallowed this modest item many times over.

The Severed Triangle comprises a single 1 acre parcel of bare land bounded on one side by the new bypass and on another by the old Risborough Road. Immediately adjoining its third boundary is the Bucks Goat Centre, a local animal attraction and therapy farm. It is agreed that access to the Severed Triangle would be possible from Risborough Road, but that the highway authority would be unlikely to permit access to be taken from the bypass. It is also agreed that the Severed Triangle was outside any defined or proposed settlement and was not subject to any allocation in the Local Plan but had the potential to obtain planning permission for small-scale commercial development for some form of essential rural business, if it was brought forward on the basis of a specific need.

Mr Lock’s view was that the Severed Triangle would be best marketed for sale unconditionally in a property auction on the basis of its existing use but with development potential. He relied on a series of transactions concerning small parcels of land in the broad locality, none of which were immediately comparable. These ranged from 3.2 acres to 7.95 acres and had realised prices ranging from £6,478 to £37,500 per acre. He considered the values achieve broadly reflected the characteristic of each site. At the higher end of the range, 6.2 acres off Wendover Road, Weston Turville, 1,500m to the west of the Severed Triangle, sold for £37,000 per acre but had hope value for residential or commercial use in the future; 3.2 acres at Great Missenden sold for £26,563 per acre, but also had residential hope value; and 7.95 acres at Quarrendon, suitable for equestrian uses or rural businesses achieved £24,906 per acre. Lower value transactions, at £6,478, £8,276 and £12,713 per acre had inferior development potential. It was also material that the land was subject to temporary possession, which would create uncertainty in the mind of any prospective purchaser. Taking all of this into account, Mr Lock valued the Severed Triangle at £20,000.

Mr Seamer was more optimistic. He relied on the sale of 4.17 acres at Weston Turville for £83,932 per acre. The land was identified for housing or employment use in the emerging local plan. He also had regard to a 56-acre site forming part of a 90-acre block, which sold subject to an overage clause for £71,214 per acre, and to 2 acres of grazing land at Marlow, sold for £125,000 per acre. Mr Seamer considered the latter two the most useful transactions, suggesting a value for the Triangle of £75,000. He made no adjustment to reflect the temporary possession.

We have little hesitation in preferring Mr Lock’s view. In our judgment Mr Seamer’s comparables are far from helpful or comparable, and his valuation does not reflect the uncertainty which the lack of access caused by temporary possession created at the valuation date. We are also mindful that while the land might have a gross area of one acre, in reality owing to its shape, the net developable area would be rather smaller, and would be further eroded by access requirements. We assess the ‘after’ value of the Severed Triangle at £20,000.

Determining the value of the Southern Retained Land is more complex and the parties are far apart in their assessments.

The claimant considers that the loss of the Acquired Land and the delay to its proposals caused by the construction of the bypass have fatally undermined the prospects of a successful development. Its case is that by the valuation date no developer would have agreed to purchase the Southern Retained Land for use as a retirement village: it was too small for a successful development; it was not possible reliably to predict when it would be available because of uncertainty over when the construction of the bypass would begin or would be completed or when the TP Land would be returned; access was a serious issue as the existing access was unsuitable and no right of way existed over the Land Strip to guarantee that a new access could be created; the Secretary of State might be willing sell the Land Strip or grant rights over it, but could only be expected to do so at market value; and changes in the understanding of planning policy since the decision of the High Court in Rectory Homes Ltd v Secretary of State for Housing Communities and Local Government [2020] EWHC 2098 (Admin) meant that any planning permission which might be obtained after the valuation date would be likely to include a requirement to provide affordable housing which was previously thought not to apply to schemes within class C2. These factors would have deterred any specialist developer of retirement villages and would have limited the pool of potential buyers to speculative purchasers. Such a purchaser would be willing to pay a premium to the land’s agricultural value but would not bid on the basis of a particular scheme, and certainly not a retirement village scheme. On that understanding the claimant considers that the value of the Southern Retained Land at the valuation date was £170,000.

The Secretary of State takes issue with the claimant’s assessment. She considers that the local planning authority would have been likely to grant planning permission for a C2 development of retirement housing comprising 121 units. At the valuation date, based on public statements, a potential purchaser would have made assumptions about the completion of the bypass within an acceptable period of time, and about the Secretary of State’s willingness to make access available. They would have been unconcerned about the rights which the Secretary of State would continue to enjoy over the Retained Land. They would have noted that the land was allocated for C2 use and have taken into account the established need in the area for housing for older people and the clear shortfall in supply. It is contended that a specialist IRC developer would have carried out their own development appraisal on the strength of which they would have been willing to pay at least £4.28m for the Southern Retained Land.

Before the valuation date the Secretary of State was unwilling to provide any specific comfort to the claimant on the issue of access. As could only have been expected, the claimant relied in its statement of case and in its evidence on the uncertainty it suggested had existed at the valuation date about the availability of access from the Southern Retained Land to the highway which could only be achieved by crossing the Land Strip in the possession of the Secretary of State.

The Secretary of State’s primary case is that there was sufficient clarity at the valuation date to satisfy a prospective purchaser that access would be provided. But to guard against the Tribunal taking a different view, the Secretary of State offered an assurance to the claimant, expressed to be for its benefit and for the benefit of its successors in title to the Southern Retained Land, that she would grant an easement guaranteeing access at all times between the bypass and the Southern Retained Land by the route which is agreed to be suitable for use in connection with any development on that land. The details of the assurance are not important at this stage but it is material that it was offered on 5 June 2026, more than four years after the valuation date and about six weeks before the hearing of the reference was due to commence.

On 20 July 2026, at the start of the second week of the hearing, the Secretary of State offered a further assurance to the claimant, again for its own benefit and that of its successors, that she would offer back the Land Strip to the claimant at market value, but would disregard any ‘special value’ referable to the development of the Southern Retained Land, insofar as it might exist. The object of this second assurance was to neutralise the force of the claimant’s case that the Secretary of State enjoyed a ransom position by reason of her ownership of the Land Strip which would have enabled her to extract a share of the value of any development on the Southern Retained Land as a condition of transferring the Land Strip back to the claimant.

Before we can determine the value of the Southern Retained Land we must first consider the factors which the claimant relies on in support of its primary case that the land would not have been of interest to a developer of retirement housing at the valuation date. If the claimant is right that no such developer would have bid for the land, the Secretary of State’s £4.28m valuation of the Southern Retained Land would fall away, as it assumes a sale to such a developer at a price predicated on the development of a 121 unit retirement scheme. If we are unpersuaded by the claimant’s primary case we will then need to examine the details of the Secretary of State’s development appraisal and consider the claimant’s criticisms of it. Finally, and in any event, we will need to consider whether the assurances given by the Secretary of State in June and July 2026 have any effect on the compensation which the claimant is entitled to for the taking of its land in May 2022

A prospective purchaser of the Southern Retained Land in May 2022 would have taken steps to inform themselves about a number of matters including the date on which work on the new bypass was expected to commence and to be completed, whether the TP Land would be returned to the owner of the Southern Retained Land at the completion of the bypass or at some later date, whether access would be available to the Southern Retained Land from the bypass, and what continuing rights, if any, the Secretary of State would continue to exercise over it once the bypass had been completed and the TP Land returned.

Evidence about what information was in the public domain was provided by Mr Mole and Mr Knight. In addition to considering publicly available material, it was agreed that as part of its enquiries a prospective purchaser would have asked the claimant about its exchanges with the Secretary of State and that information provided in the course of those exchanges should be treated as having been available to the market.

An outline programme presented to Stoke Mandeville Parish Council in September 2018 indicated that detailed design of the bypass project would be undertaken by the end of that year, mobilisation would begin at the start of 2019 and the bypass would be completed during the first quarter of 2021 suggesting a total construction programme of around two and a half years. The anticipated timetable then slipped significantly, as periodic updates published by HS2 demonstrate. A “3-month construction look ahead” published in the summer of 2021 referred to the closure of Old Risborough Road “from May 2021” and the sinking of trial holes during that season. The next edition of the same publication suggested the main works for the bypass would start in the winter of 2021/22, while in the following spring release the “main works start” was placed in a bracket from February 2022 to winter 2024. If a reader assumed that that bracket was to cover both the start and the completion of the work they might expect a construction programme lasting more than two and a half years.

Previous information provided to the claimant suggested a construction programme lasting closer to three and a half years. In June 2020, in response to a request from Mr Knight for an indicative start date, HS2’s contractor said that it was looking to commence work towards the beginning of 2021 and that it would be “near complete” around the summer of 2024. In the same communication it was also suggested that the TP Land (both the Land Strip and the unused works compound) should be returned to the landowner in the third quarter of 2024 “simultaneously upon completion of works”. Later, in October 2021, a shorter programme was suggested, with a commencement date of March 2022 and completion due in December 2023. By the valuation date it would have been clear to any informed potential purchaser that the bypass project was behind schedule, and that while its commencement might have been expected within three to six months, consistent estimates of the anticipated duration of the works had not yet been provided.

Although it was suggested by Mr Westmoreland Smith KC in his closing submissions that facilitating works had begun in February 2022, if that was the case we are satisfied that it would not yet have been apparent on the ground. Mr Mole acknowledged that by the valuation date in May 2022 no works had started and detailed design had not been completed.

As for the TP Land, the clarity provided by HS2’s contractors in June 2020 did not last. The works compound which made up the bulk of the TP Land had not yet been utilised but in July 2020 it was shown on a plan sent to Mr Knight as one of three areas which might be used in future for stockpiling. This was a cause of concern to him and the topic was raised again by Mr Briggs, one of the claimant’s advisers, during a conference call with HS2’s agent in December 2020. He later reported on the outcome of his discussions, explaining that HS2 would not return the unused works compound “anytime soon” and that it might not do so until towards the end of the construction scheme “even though the work on the bypass completes well before that time.” Mr Knight was aware that Schedule 16 to the HS2 Act entitled the Secretary of State to remain in occupation of the TP Land for up to twelve months after the completion of the works. We think it unlikely that he or Mr Briggs envisaged the return would be delayed until the completion of the whole HS2 project, but references by HS2 to their possible need to retain occupation for the storage of materials for an indeterminate period were a genuine source of anxiety. Mr Briggs pressed for clarification in July 2021, pointing out specifically that the claimant could not progress its own development of the Southern Retained Land until it had a commitment on the return of the TP Land. No clarification was provided and we were told by Mr Knight that Mr Brigg’s letter to HS2 in which it was requested went unanswered.

A prospective purchaser is likely to have been advised at the valuation date that it should not expect the return of the TP Land until the winter of 2025/26 at the earliest, allowing HS2 two and a half years to design, mobilise and undertake the works and a further year to relinquish the compound. They would have assumed a longer delay was possible.

We think it likely that a competent solicitor would also have advised a prospective purchaser that, technically, the HS2 Act entitled the Secretary of State to remain in possession of the TP Land until the completion of the whole HS2 project. They would also have pointed out that the Secretary of State would retain the right, under the HS2 Act, to enter the TP Land to survey, investigate, or take samples of anything on the land after it had been returned. We think these residual rights would have been less of a concern than would the uncertainty over the timing of any development which would be possible on the Southern Retained Land by reason of the uncertainty over the duration of the works and the contractor’s intentions for the TP Land.

The IRC development of 110 to 115 units originally envisaged for the claimant by Hambledon Land in 2018 assumed that the Secretary of State would acquire only so much of the Site as was required for the new bypass and that access would therefore be available directly from the new carriageway without the need to cross land retained by the Secretary of State. A single access was shown in the brochure prepared for that scheme located in the position of what has been referred to as “Option 2”. It is agreed that Option 2 is the only suitable access to serve any development on the Site.

Before the valuation date, the only access to the Southern Retained Land shown on plans of the scheme prepared by HS2 was in a position referred to as “Option 1”. This led directly into the unused works compound on the TP Land. Option 1 is now agreed to be unsuitable as a permanent access to an IRC development or any other substantial development.

The current consensus around the suitability of Option 2 and the unsuitability of Option 1 did not exist at the valuation date. From the start of discussions between the claimant and HS2, access was an important topic. We are satisfied that it was assumed on both sides that some form of permanent access to the Southern Retained Land would be provided. General policy statements published by HS2 and directed at rural landowners offered some reassurance, though not a guarantee, that appropriate accommodation works, including access, would be discussed (“Where land is to be acquired or temporarily occupied for the purposes of Phase One, it is likely that some form of accommodation works will be provided”). In some cases a requirement to replace an access permanently affected by the scheme was included in the HS2 Act, but in other cases the provision of a replacement access was to be the subject of discussion in connection with compensation. It was made clear that any replacement to be provided would be similar to the existing access.

The parties first met to discuss access in May 2020. On that occasion the access at Option 1, which was said to be required for soil stockpiling, was described in minutes prepared by HS2’s contractor and not shown to Mr Knight, as being “in prime location to be highways access onto plot for future development”. Mr Knight is recorded as having requested that the access in that location should remain and be available for use by residents of the development in future. We do not read very much into that minuted statement, which may or may not be accurate in view of the fact that the claimant continued to provide plans of its proposed development showing Option 2. We were shown no variant prepared by its advisers which either replaced or supplemented it with access at Option 1. In June 2021 HS2 prepared a drawing showing Option 1 with the annotation “descope existing design works”, and Option 2 marked “new proposed bell mouth”. It might appear from that drawing that consensus had been reached around Option 2 as the appropriate location by this time, but a contractor’s minute of a further meeting on 12 October 2021 suggests that HS2’s design team remained unconvinced and still adhered to Option 1 (“Site entrance still as per original plans”; “requested access is too fast on unsafe bend, compared to proposed access”).

An email from Mr Knight to the claimant’s highway consultant, Mr Bell, sent on the day after the 12 October meeting, confirms that safety concerns were raised at the meeting by HS2. Mr Knight told Mr Bell that no action was required from him. Mr Westmoreland Smith KC sought to make some capital out of what he suggested was a lack of urgency on the part of the claimant and its advisers and an omission to answer HS2’s concerns. We are satisfied that these criticisms were misplaced. Mr Bell’s detailed rationale for preferring Option 2 had been provided to HS2 by Mr Knight as long ago as 6 January 2021. At the conclusion of the 12 October meeting the ball was firmly in HS2’s court and it was for them (specifically Mr Ashkan Amiri) to raise the issue internally (the minute records “AA to raise claimant’s concerns to design review”).

No further meaningful exchanges took place between the meeting on 12 October 2021 and the valuation date. The design of the new bypass was incomplete so the whole of the land whose acquisition was authorised by the Act was included in the general vesting declaration executed by the Secretary of State on 8 February 2022. When HS2 obtained planning permission for the general arrangement of the new bypass on 31 March 2022, the only access to the Southern Retained Land shown on the approved drawings was Option 1.

A prospective purchaser of the land at the valuation date would therefore have been aware of two important facts. First, that the Secretary of State had given no assurance that access would be provided across the Land Strip connecting the Southern Retained Land to the new bypass; at most there was an expectation of further discussions, but no clarity over the form or timing of any right which might be granted. And secondly, that there was no agreement over the appropriate location for a new access. The prospective purchaser would know that the claimant’s highway consultants took one view, in favour of Option 2, but that the Secretary of State’s contractors who were building the new road considered that Option 1 was preferable and that Option 2 was unsafe. Buckinghamshire County Council, as highway authority, had given its approval to a general arrangement which envisaged Option 1 as the only access to the Southern Retained Land.

The prospective purchaser would additionally have appreciated that the amount of the Acquired Land which would eventually be adopted as highway remained unknown. The extent to which the Land Strip would be surplus to any requirement of the Secretary of State’s after adoption of the bypass was therefore also unknown. A purchaser would have anticipated that the Secretary of State might be willing to dispose of so much of the Acquired Land as was not required for adoption. They would assume that in accordance with the Crichel Down Rules and in the event of a disposal the surplus land would be offered first to the original owner or their successor in title and that any such sale would be at market value. This much we believe to have been common ground.

Ms Tafur KC submitted that in negotiating any sale of the land no longer required the Secretary of State would be required by the Crichel Down Rules to obtain best value, which would include a ransom value reflecting the fact that the Southern Retained Land was separated from the highway and could not gain access to it without acquiring the Land Strip or rights over it. In view of the terms in which Rule 16 is expressed, as specifically including any “special value” which might reasonably be expected from a former owner, there would seem to us to be some force in that suggestion, although Mr Westmoreland Smith KC suggested that “market value” could not be understood as including a ransom value created by the compulsory acquisition, since that would allow the Secretary of State to profit from the exercise of her powers.

We doubt that a prospective purchaser of the Southern Retained Land would have been concerned with the interpretation of the Crichel Down Rules. For as long as there was uncertainty about the availability of access that would be the dominant consideration. If it was understood that the Secretary of State would provide access, the risk that a ransom situation would exist would largely evaporate, and ownership of the Land Strip would be very much a secondary matter. If there was no such certainty, and if it was thought that the only way of obtaining access was by acquiring the Land Strip, fear of a ransom situation would have been an additional source of discouragement.

The Southern Retained Land was part of the land allocated in policy H6b of the Local Plan for approximately 100 units of class C2 retirement accommodation, but no planning permission was in force at the valuation date. Nor, when considering the damage caused by severance, can it be assumed that planning permission had been granted for the CAAD Scheme. The rules for assessing compensation for land taken, including rule 2 in section 5 and section 14(3), 1961 Act, do not apply to the assessment of compensation for injurious affection caused by severance under section 7, 1965 Act.

It is agreed that a prospective purchaser would have considered that there was a reasonable prospect, but not a certainty, of obtaining planning permission for a retirement village. The capacity of the Southern Retained Land to accommodate such a development is a matter on which a purchaser would have taken careful advice but which would have remained uncertain at the valuation date. The evidence suggests that a scheme of between 77 units and 121 units would have been thought to have 60% to 80% prospect of obtaining permission.

The claimant’s planning expert, Mr Hepher, considered that there was insufficient space to squeeze in a scheme containing as many as 121 units, a figure arrived at by the Secretary of State by applying a target density derived from the Local Plan to the area of the Southern Retained Land covered by policy H6b. He identified a number of constraints which would limit the number of units which could be achieved, including the relationship between the site and the Chilterns AONB, its proximity to and visibility from the bypass, separation distances between buildings and between buildings and site boundaries, and the insufficiency of the space available for landscaping and parking. In his view a development of 77 units was the maximum which would be permitted and there was no realistic prospect of obtaining permission for the 121 units envisaged by Mr Mabb, the Secretary of State’s planning expert.

For his part, Mr Mabb considered that a development of 121 units was realistic, and that the objections raised by Mr Hepher were capable of being overcome by further design work and engagement with the local planning authority.

The question for us is not whether planning permission would have been granted for a development of a particular size, but whether a prospective purchaser of the Site would have been prepared to bid for the Southern Retained Land without planning permission, and, if they would, what assumption they would make about the capacity of the site when formulating a bid. We do not think a prudent purchaser would assume that permission would definitely be available for 121 units, nor was that the Secretary of State’s case. Mr Mabb thought there would be a 20% to 30% chance that permission would not be obtained, and Mr Seamer, the claimant’s valuation expert, considered that a purchaser would discount their bid for the site by 30% to reflect that risk. That is a significant discount which betokens a substantial risk.

A prudent purchaser might not be as pessimistic as Mr Hepher appeared to be, nor as optimistic as Mr Mabb, but it is likely that their views represent the full range of developments for which a purchaser would see some prospect of obtaining permission and the risks which they would envisage. Such a purchaser would consider that there was a good chance of obtaining planning permission for a development of around 100 units with a greater risk of refusal for anything above that level, and a greater prospect of success for smaller schemes.

Having reviewed the information which would be available to a prospective purchaser at the valuation date, and the relevant assumptions they would make, we can now reach a conclusion on the after value of the Southern Retained Land.

Mr Lock, the claimant’s expert, thought that a developer of retirement village schemes would not be interested in the Southern Retained Land at the valuation date. He explained that such developers do not acquire land speculatively and that it was very unusual for them to do so unconditionally without planning permission already having been granted (he could think of only two examples, in both of which the prospects of obtaining a favourable planning permission were very strong). A further complicating factor in his opinion was that by the valuation date schemes smaller than 100 units would not have been seen as viable. The integrated retirement community model depends on a sufficiently large pool of residents to fund the expensive leisure and recreational facilities which make such schemes attractive. If the scheme is too small, each resident’s share of the cost of services risks becoming unaffordable and new units will not sell. Therefore, the prospect that planning permission might only be obtained for a development on the margins of viability would be a substantial disincentive to the acquisition of the Site as a whole by a developer.

Mr Lock considered that uncertainty over the availability of the Site and the commencement of any development programme would be a further significant disadvantage. At the valuation date a well-informed purchaser would have had little confidence that the bypass would be commenced and completed within 24 months (the timescales assumed by Mr Seamer). They would also be advised that the TP Land (without which development could not commence) would be likely to remain in the Secretary of State’s occupation for at least a year after the completion of the bypass and would assume that their own commencement on site would not be possible until the end of 2025 at the earliest. The greater the delay in commencing development the greater the risk that the market might turn against the retirement village model or that a rival operator might develop an alternative scheme within the purchaser’s intended catchment. An IRC developer might be prepared to take an option or enter into a conditional contract for land which would not become available for development for three or four years, but they would be unlikely to consider acquiring a site unconditionally in those circumstances, especially when no planning permission had yet been obtained.

Finally, the uncertainty over access would be a further major issue for any purchaser. General and imprecise statements in the public domain about the willingness of the Secretary of State to engage in discussions over access would not carry weight with a developer who was considering whether to enter into an unconditional contract to acquire the Southern Retained Land. Knowledge that the claimant had been in discussion with the Secretary of State for two years before the valuation date, and had secured no clear commitment to provide access, would have been discouraging. The continuing disagreement over the viability of the options which had been canvassed in those discussions would have further reduced a prospective purchaser’s appetite.

Mr Lock impressed us with his experience of the IRC sector. His evidence on the attractiveness of the land to a developer within that sector was convincing. We were equally struck by the absence of any contrary view from Mr Seamer, who chose not to respond to Mr Lock’s analysis in his brief supplementary report. Mr Seamer’s own valuation was based on the assumption that all the uncertainties over planning, access and the availability of the land by a particular date would be resolved in the purchaser’s favour. Some of his assumptions were obviously too optimistic, especially in relation to timing, but also regarding the number of units which were likely to obtain permission. It was clear to us that he had not thought sufficiently about the risks inherent in the project, or the response of a purchaser to them. When questioned about risk and how it was accommodated in his development appraisal, Mr Seamer made a number of new points, none of which was convincing. In cross examination he was willing to accept that a developer would apply substantial discounts to reflect the disadvantages Mr Lock had identified in his original report. We took this to be a late acknowledgement of the soundness of Mr Lock’s analysis, and it was fatal to our confidence in Mr Seamer’s development appraisal.

Mr Lock’s view was that the demerits of the Southern Retained Land would ensure that it would not have been acquired unconditionally at the valuation date by an IRC developer. At the conclusion of his evidence Mr Seamer’s valuation of £4.28m, which was based on a development appraisal for an IRC scheme, would have required a discount of at least 40%, (30% for planning risk alone, a further discount for uncertainty over access and a significant adjustment to reflect a more realistic view of timing). We accept Mr Lock’s evidence that no IRC developer would approach the purchase of a development site on that basis.

We accept Mr Lock’s view that in the absence of any interest from IRC developers, the likely purchaser of the Southern Retained Land would be a speculative land buyer, who would buy for cash with no income against which to secure debt. They would be aware of all the risks we have outlined above. The most appropriate way of valuing the land is by way of an uplift to existing use value to reflect the long-term prospects for some, as yet unidentifiable, development. We agree with Mr Lock that comparables based on strategic development land are of limited assistance.

Mr Lock’s evidence showed agricultural land values in the order of £6,000 to £12,000 per acre, while strategic development land could reach £70,000 per acre. We accept Mr Lock’s view that a pragmatic value would be based on £40,000 per acre, which when applied to the 4.29 remaining acres provides a value for the Southern Retained Land of say £170,000.

On the claimant’s primary case, therefore, adopting the parties’ agreed ‘before and after’ approach, we would conclude the valuation exercise as follows:

We turn now to the assurances given by Secretary of State shortly before and during the hearing of the reference that an unconditional easement would be granted to provide access to the Southern Retained Land from the bypass, and that on any sale of the unadopted parts of the Land Strip the Secretary of State would not seek to achieve a ransom value. The purpose of the assurances can be inferred both from their timing and from their express terms; they are designed to reduce the compensation payable to the claimant by removing some of the disadvantages which affected the value of the Southern Retained Land at the valuation date.

The first issue, which is the only contentious legal issue between the parties, is whether as a matter of principle those assurances can be taken into consideration in determining compensation; if they can, it is then for consideration whether they make any difference to our after valuation of the Southern Retained Land.

By rule 2 in section 5 of the 1961 Act for the purpose of assessing compensation the value of land taken is the amount which the land might be expected to realise if sold in the open market by a willing seller. Rule 2 is supplemented (for land taken after 29 October 2020) by section 5A. This requires that a rule 2 valuation must be made as at the “relevant valuation date”. In the case of land which has been the subject of a general vesting declaration, the relevant valuation date is the earlier of the vesting date and the date when the assessment is made (section 5A(4)). Section 5A(2) doubles down on this direction by providing unequivocably that: “No adjustment is to be made to the valuation in respect of anything which happens after the relevant valuation date.”

Section 7 of the 1965 Act provides for the assessment of compensation in respect of land retained by an owner after the acquisition of other land in their ownership, as follows:

Section 5A of the 1961 Act leaves no room for doubt about the valuation date under rule 2. Section 7 of the 1965 Act is less categoric and makes no express reference to a date from which damage is to be assessed. Nevertheless, it was accepted by Mr Westmoreland Smith KC that where land is required to be valued for the purpose of section 7, the primary valuation date must be the date on which the severance occurred i.e. the date on which the Secretary of State took possession of the Acquired Land. The parties were in agreement on this point and the whole of the valuation evidence on both sides was directed towards ascertaining the value of the Acquired Land and the Retained Land on 18 May 2022.

Both parties referred to the Tribunal’s decision in Castlefield, which concerned a claim for compensation for injurious affection in respect of a public house whose access had been taken compulsorily. The acquiring authority was obliged to provide a replacement access but left the claimant to negotiate this for itself. The Tribunal was not invited to assess compensation on the composite before and after basis used by the parties in this reference, and the value of the land taken (which had originally provided access to the public house) was agreed. It was initially suggested on behalf of the claimant that for the purpose of section 7, the value of the severed land should take account of the very lengthy delay it had experienced in its unsuccessful attempts to negotiate replacement access rights over the new road which had been constructed as part of the scheme. That delay could not have been anticipated at the valuation date. This submission was based on the direction in section 7 to provide compensation for the “damage, if any, to be sustained” by the owner of the land.

By the conclusion of the argument in Castlefield the claimant’s position had modified, and a consensus had been arrived at between the parties which was then endorsed by the Tribunal, as appears from our decision, at [21]:

“In his closing submissions Mr Pereira KC accepted that the correct way to undertake the valuation was to have regard to all matters that were known or anticipated at the valuation date, or which would have been known or anticipated by a reasonably prudent and properly advised purchaser. Mr Booth KC accepted that proposition, as do we. As a general rule, without an express contractual or statutory instruction to do so (and there is none in section 7) it would always be wrong to value land as if with knowledge of matters which were not known, and could not have been known, at the valuation date. The suggestion made by the Lands Tribunal in Waterworth v Bolton MBC (1979) 37 P&CR 104 that a different approach is permissible in cases of injurious affection has been the subject of criticism by learned commentators and seems to us to be wrong in principle (see Barnes, The Law of Compulsory Purchase and Compensation, at para 9.57, and Tottel’s Compulsory Purchase and Compensation Service, at para 2521). Mr Pereira KC did not rely on Waterworth.”

The primary case advanced by Mr Westmoreland Smith KC on behalf of the Secretary of State was that at the valuation date it would have been clear to a potential purchaser that access would be provided and that the bypass would have been completed within a reasonably predictable time. In the alternative, Mr Westmoreland Smith submitted that the approach adopted by the parties and by the Tribunal in the passage from Castlefield cited above was wrong and should not be followed.

Mr Westmoreland Smith KC suggested that the correct approach to section 7 was first to ascertain whether any damage had been sustained by the owner of the land taken by reason of its severance from other land of the owner. That exercise should be judged at the date of assessment of the claim, taking into account what had happened by that time, but also considering what was reasonably likely to happen in the future (because compensation is assessed once only). In assessing whether damage had occurred, it would be legitimate to have regard to the Secretary of State’s assurances about access and to other facts, including the date of completion of the bypass, which had not been known at the valuation date. Next, if damage had been identified at the first stage, then the diminution in value of the retained land should be assessed as at the date of severance i.e. at the same valuation date as was required under rule 2 when determining the value of the land taken. That assessment should take account of the state of the market and of transactions and values at that valuation date.

Mr Westmoreland Smith KC relied on the language of section 7 which gives a statutory entitlement to compensation for “damage ... sustained”. On an ordinary construction, he submitted, the Tribunal is required to determine what “damage, if any” has been sustained or is likely in future to be sustained by the claimant as a consequence of the exercise of the powers in question and then to determine the compensation payable in respect of that damage. The first stage involved what he called an assessment of actual fact concerning the existence of damage, which could arise either from the acquisition of the Acquired Land, or from the execution of the works in connection with which the land had been acquired, or from the use of those works. The second stage involved a conventional valuation to assess the quantum of the damage which could now be seen to have been the consequence of the severance, having regard to values and market circumstances at the valuation date.

Although Mr Westmoreland Smith KC invited us to take account of the assurances given by the Secretary of State long after the valuation date, he did not accept that other facts which had become apparent by the date of the assessment could be taken into account in identifying the existence or quantum of damage. He suggested that matters which concerned the way in which the relevant powers had been exercised could be taken into account, but other matters could not. On that basis it was proposed that the Southern Retained Land should be valued on the valuation date as if with knowledge of events which occurred four years or more later.

Mr Westmoreland Smith KC based his submission on the principle of equivalence which underpins the assessment of all compensation, namely, that the landowner whose land is taken in the public interest should receive compensation which fully and fairly reflects the loss which the owner has actually suffered, no more and no less (Horn v Sunderland Corporation [1941] 2 KB 26, 42 per Scott LJ). He bolstered his argument by reference to authority.

We were first referred to the decision of the House of Lords in Cowper Essex v Acton Local Board (1889) 14 App Cas 153, which concerned a claim for compensation under the Land Clauses Consolidation Act 1845 by an owner of land in Acton part of which had been taken for the construction of a sewage works leaving the owner with other land said to have been injuriously affected. The jury was assumed to have awarded compensation on the basis that the value of the retained land as building land was diminished by the new sewage works to be built, no matter how carefully they were managed, and additionally that the presence of the works created a risk that negligence in their management may occasionally give rise to actionable nuisance. It was argued by the statutory undertaker that compensation was not payable on that basis. Mr Westmoreland Smith KC referred to a passage in the speech of Lord Macnagten, at 178, which confirmed that a jury assessing compensation was entitled to take into consideration “the purpose of the undertaking, the consequences likely to result from the execution of the works on the lands required, and any alteration in the character of the property which those works are calculated to bring about.” Lord Macnaghten also remarked that “apprehension of mischief is damage of itself. And the depreciation in value must be the measure of compensation.” The owner was therefore entitled to compensation for the reduction in the value of his retained land which occurred at the date of severance because the market anticipated that adverse consequences were likely to result from the proposed sewage works for which his adjoining land had been taken. Those observations do not seem to us to assist in this case. The assurances on which the Secretary of State wishes to rely could not have been anticipated at the valuation date.

We were also referred to the well-known case of Bwllfa v Pontypridd Waterworks Company [1903] AC 426 in support of the proposition that facts which were known at the date of assessment of compensation should be taken into account. We acknowledge that general principle. It has no impact on valuation for the purpose of rule 2, or in general to the valuation of land, but it is relevant to the quantification of damage.

Mr Westmoreland Smith KC finally referred to two decisions of the Tribunal, Cooke v Secretary of State for the Environment (1974) 27 P&CR 234 and Ridgeland Properties Ltd v Bristol City Council [2009] UKUT 102 (LC), but neither contained any useful statement of principle or relevant discussion. The same is true of Waterworth v Bolton MBC (1979) 37 P&CR 104, on which Mr Westmoreland Smith placed no weight, noting that the Court of Appeal ((1981) 42 P&CR 289) had been satisfied that the decision raised no issue of law.

It is important to have regard to the statutory language when determining the basis on which compensation is to be assessed. Rule 2 in section 5 of the 1961 Act presents no difficulties. The measure of compensation for land taken is the amount which the land might be expected to realise if sold in the open market by a willing seller at the relevant valuation date. Section 7 involves a different exercise, namely, the assessment of damage sustained by the owner of the land by reason of the severance, or the injurious affection of the retained land. Injurious affection means damage to land, and it is the damage which is the basis of the assessment of compensation.

Where damage has been caused by severance it is necessary to value the retained land before and after the severing event. Logically, and in principle, events which occur subsequently cannot change the value of the land on the date of severance; but that does not mean that events which occur after the severance cannot reduce (or increase) the damage which has been sustained. It is the whole of the damage suffered, and not the difference in value caused by the act of severance, which is the measure of compensation. In practice, that damage may obviously be affected by events which occur after the valuation date. For example, damage caused to retained land might be ameliorated by works carried out after the valuation date on the land taken, such as the construction of a new road providing a new access to the retained land. Similarly, an owner might carry out works of their own to the retained land to overcome some disadvantage created by its severance or might pay a neighbour for a new access to replace one lost as a result of the acquiring authority’s scheme. In such cases it would not be right to assess the damage for which compensation was payable without taking account of the full effects of the scheme, or the effect of mitigation measures taken by the claimant (and their cost), even though none of those were experienced or incurred until after the valuation date.

We agree with Mr Westmoreland Smith KC that in this context the guiding principle is the principle of equivalence. If it can be seen by the time of the assessment that the exercise of comparing the value of the retained land before and after severance results in the claimant being compensated in an amount which exceeds the damage it has actually sustained, then compensation should be adjusted to match the damage. This adjustment to ensure that the principle of equivalence is respected does not involve a change in the primary valuation date. The valuation date is prescribed in the case of section 5 and must in principle be the same under section 7 to the extent that damage is assessed by reference to the before and after value of the retained land. But if relevant events which have occurred after the valuation date have benefitted the land, or if costs have been incurred in attempts at mitigation, then in principle we consider that they ought to be taken into account in assessing damage to ensure that the claimant is not over or under-compensated for the loss which it has actually sustained. That is the approach taken to the assessment of damages in other fields and unless it is prohibited (as it is in the case of rule 2 by section 5A (2) of the 1961 Act) we see no reason not to apply it to a claim for injurious affection. How it is to be done in an assessment for the purpose of section 7 will depend on the circumstances of the particular case. If the damage has already been compensated by some non-financial arrangement, such as the grant of rights of access, or has been avoided by the landowner at its own expense, then a further before and after valuation may be necessary, and logically it should be by reference to values when the new circumstances took effect. If necessary, compensation may also be required to account for damage experienced between the date of severance and the date of amelioration.

We therefore accept Mr Westmoreland Smith KC’s argument up to a point. But where we part company from him is his suggestion that when considering at the date of the hearing whether the claimant has been fully compensated, only some of the circumstances existing at that date should be taken into account. It was not clear to us why, on Mr Westmoreland Smith’s argument, damage caused by certain post valuation date facts should be treated as referable to the exercise of the statutory powers while damage caused by others should not. In particular he submitted that it would not be permissible to have regard to general changes in the market for retirement schemes, or to changes in the approach taken by the planning system to the requirement for affordable housing in such schemes, both of which were acknowledged to have occurred by the date of assessment. But if the claimant was exposed to those less favourable circumstances as a consequence of the delay in developing or selling its land caused by the exercise of the Secretary of State’s powers it is hard to see why, in principle, they are not as relevant as the assurances belatedly given about access.

This analysis goes beyond what the Tribunal said in Castlefield in which the damage claimed was limited to the diminution in the value of the retained land at the date of severance and no suggestion was made that it had been reduced by subsequent events. We adhere to the view there expressed that when valuing land for the purpose of section 7, events which occur after the valuation date must be left out of account, and that the valuation date for that purpose is the date on which severance occurred. But if it can be seen that the damage sustained at the date of severance has been reduced by steps taken by one of the parties, then it will be legitimate, in accordance with the principle of equivalence, to take those steps into account in determining the amount of compensation payable in respect of that damage.

We come finally to the question whether any of this makes a difference in this reference. We have reached a clear conclusion on that issue and we are satisfied that two practical considerations prevent the Secretary of State from relying on the assurances she has given after the valuation date to reduce the compensation payable to the claimant.

The first is that the assurances for which credit is sought have come long after the close of pleadings and the exchange of evidence in the reference. Neither of the expert valuation witnesses was asked to consider the impact of the assurances on the value of the Southern Retained Land. We are satisfied that access would have been a cause of concern but whether that concern would have been entirely neutralised by the assurance is not something on which we have evidence. The Secretary of State’s omission to plead her secondary case based on the assurances, and the emergence of that case for the first time only in Mr Westmoreland Smith’s skeleton argument, meant that neither party prepared properly to deal with it. Such evidence as we did receive was given off the cuff by the experts and is not a satisfactory foundation for the assessment of compensation. In any event, our conclusion that the Southern Retained Land would not have been attractive to an IRC developer at the valuation date was based on the whole collection of uncertainties which afflicted it, including access, timing and planning risk (which Mr Seamer thought in its own right justified a discount on his valuation of 30%). We may very well have reached the same conclusion if access had not been an issue at all.

Secondly, the Secretary of State’s assurances are not the only thing which has changed since the valuation date. The claimant was prevented by the Secretary of State’s scheme from disposing of the Southern Retained Land with the benefit of clarity about access between 18 May 2022 and 5 June 2026 and remains unable to dispose of it with vacant possession. We heard that during that period the approach taken by planning authorities to the provision of affordable housing changed as a result of the decision of the High Court in Rectory Homes,but there was little evidence about the practical consequences of that change. We also heard in general terms about a significant decline in the market for retirement housing on the IRC model which was said to have “all but collapsed” since the valuation date. Finally, we heard that a change in the allocation of the retained land in the new draft local plan had recently been proposed, which would see its C2 allocation removed. We can see no reason to judge the effect of the assurance as if it had been given more than four years earlier than it was and we do not see how the damage sustained by the exercise of the Secretary of State’s statutory powers can be assessed having regard to some of the circumstances existing at the date of assessment but ignoring others.

For these reasons we have disregarded the assurances offered by the Secretary of State. It would have been open to the Secretary of State to plead and to lead evidence on the extent to which her assurances affected the value of the Southern Retained Land at the date they were offered, or at the date of the hearing, but she has not done so. There is no reason for us to speculate about those matters.

The final head of compensation which divided the parties related to the claimant’s entitlement to recover pre-reference professional fees, which were claimed under rule 6. It was accepted by the Secretary of State that, in principle, the claimant was entitled to be reimbursed in respect of expenses reasonably incurred as a consequence of the compulsory acquisition. It was also agreed that fees totalling £471,244 plus VAT had been incurred by the claimant. The issue was as to the extent to which those fees were recoverable.

The Secretary of State objected to being required to contribute at all to the fees of three of the consultants who has acted for the claimant and disputed the quantum of the payments made to seven others. Including VAT, the disputed charges totalled £285,146.74.

The largest single item in dispute concerned fees of £116,734 plus VAT paid by the claimant to Hambledon Land between July 2022 and March 2025 for services described as claim management. Mr Knight explained that Hambledon Land had been appointed by the claimant under the terms of a written agreement which required it to manage the compensation claim in return for a fee of £200 per hour subject to a monthly ceiling reached after about 16 hours and with a maximum annual payment of £40,000. Its duties included procuring a team of advisers and consultants, preparing and managing the CAAD application, and preparing the compensation claim. The relevant tasks were undertaken by Mr Knight who had authority to act on the claimant’s behalf on all matters. We were shown the monthly invoices which Hambledon Land presented to the claimant and which it paid. These showed that in almost every month considerably more than the capped number of hours was worked, so that the effective rate is likely to have been closer to £100 an hour.

The Secretary of State was in difficulty in challenging the payments to Hambledon Land. Although objection was originally taken in principle to a charge for claims management, which was described a “business choice”, but having heard Mr Knight’s evidence, Mr Mole, who gave evidence in response to this aspect of the claim, acknowledged that some payment should be made and suggested that this should be £69,232. The objection maintained by Mr Westmoreland Smith KC in closing submissions was in respect of duplication or overlap between the role taken by Hambledon Land and the tasks performed by other professionals. No specific overlap was identified or put to Mr Knight in cross examination, and there is no material before us which demonstrates duplication. No doubt there were many occasions when Mr Knight and others were engaged in meetings or jointly engaged on other tasks, but that is not enough to show that the claimant was not receiving a valuable service from both. Mr Knight was, in effect, in charge of the compensation claim on behalf of the claimant and we are satisfied that it is entitled to be reimbursed for his services.

Objection was also taken to £4,040 paid to Camargue Group, a communications consultancy, for advisory work done in connection with the CAAD application. This was said by Mr Mole to be unnecessary and unreasonable. Whether it was necessary that the fee be incurred in not a relevant consideration. No doubt the CAAD could have progressed without specialist communications advice, but there is nothing in the evidence to support the suggestion that it was unreasonable to engage it. A similar objection was taken to a fee of £3,500 paid to MDA Consulting, a costs consultancy, whose invoice shows that in December 2023 they provided costs analysis based on three other retirement village schemes. No questions were asked of Mr Knight about their role and as it is accepted that they were instructed and provided the service for which they were paid there are no grounds on which we are able to say that the claimant is not entitled to be reimbursed.

Mr Mole raised token objections to the quantum of the fees charged by other professionals, including the claimant’s solicitors. He proposed arbitrary reductions in fees, giving only the most general explanations, including a 40% reduction in the fees of the claimant’s architects and a 33% reduction in the fees of its solicitors. Mr Knight was not cross examined in support of these reductions. We are satisfied on the basis of Mr Knight’s evidence that all of the fees claimed were incurred because of the acquisition. The CAAD application was complex, in part because of the local planning authority’s lack of familiarity with the process and its requirement that the application be supported with the same level of detail as if it were a full planning application. None of the charges appear on their face to be unreasonable and there is no basis on which we could find them to be so. We are satisfied that the claimant is entitled to reimbursement of the full amount of the pre-reference fees claimed.

For the reasons we have given, compensation is payable to the claimant as follows:

The claimant is also entitled to interest at the statutory rate, which the parties are invited to agree.