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Cite as: [2004] EWCA Civ 232

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Neutral Citation Number: [2004] EWCA Civ 232
Case No: C3/2003/1389

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LANDS TRIBUNAL
(P.R. Francis FRICS)

Royal Courts of Justice
Strand,
London, WC2A 2LL
5th March 2004

B e f o r e :

THE VICE-CHANCELLOR
LORD JUSTICE MANCE
and
LORD JUSTICE CARNWATH

____________________

Between:
RYDE INTERNATIONAL PLC
Appellant
- and -

LONDON REGIONAL TRANSPORT
Respondent

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Christopher Katkowski QC and Timothy Mould (instructed by Argles, Stoneham. Burstows) for the Appellant
Joseph Harper QC (instructed by Transport for London) for the Respondent

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lord Justice Carnwath:

    Introduction

  1. This is an appeal against a decision of the Lands Tribunal (P R Francis FRICS) as to the compensation payable to the claimant ("Ryde") for the freehold interest in a block of 37 flats and 5 bungalows known as Evelyn Court and Evelyn Mews in Croydon, Surrey ("the property"). It was compulsorily acquired by London Regional Transport ("LRT") in connection with the Croydon Tramlink Scheme ("the scheme").
  2. The Tribunal found the following facts, which were largely based on an agreed statement, and were not in issue before us:
  3. i) The subject property comprised a development of 37 flats and 5 bungalows located off Teevan Close in Addiscombe, Croydon. It was constructed by the claimant, a property developer, in 1989 pursuant to a detailed planning permission dated 29 November 1988 as 36 elderly persons' flats together with warden's accommodation (Evelyn Court), 5 elderly persons' bungalows (Evelyn Mews), communal gardens, access road and 12 parking spaces. The property was of traditional construction having brick faced walls to the ground floor with part tile hung and part rendered elevations to the first, under concrete tile covered pitched roofs.

    ii) In November 1989 the units were offered in the open market for sale as sheltered accommodation, but due to the then state of the property market no sales were concluded, and, from September 1990, the claimant decided to let them for general housing purposes on short-term tenancies, despite a further planning application for general housing purposes having been refused on appeal. The lettings were tolerated by the local planning authority as, with the Croydon Tramlink scheme coming into the public domain in May 1991, it became evident that the whole of the subject property would need to be compulsorily acquired, and the purposes for which it had been constructed would not therefore be achievable. There was also an informal arrangement with the local council whereby housing benefit tenants were accommodated in the units.

    iii) Had it not been for the scheme, the development would have been sold by 25 March 1993, subject to steps having first been taken by the claimant to obtain vacant possession of the flats and bungalows. Holding costs, if any, would therefore be calculated from that date.

    iv) The acquiring authority deposited the Croydon Tramlink Bill in November 1991 with an application for leave to introduce it during the 1991-1992 Parliamentary Session. The claimant petitioned both Houses of Parliament in opposition, but withdrew its petition in April 1994 and received a Parliamentary Undertaking from the acquiring authority. In July of that year the Croydon Tramlink Act received the Royal Assent.

    v) Notices to Treat and Notices of Entry were served on the claimant on 1 May 1997, and possession of the subject property was taken on 8 August 1997, this being the valuation date for compensation purposes. The property was demolished late in 1997.

    vi) The valuations of the subject property were to be based upon its permitted use for sheltered housing, and the 'ultimate' value of all the units (including the value of the freehold reversion but before sales and other costs) was agreed at £2,585,000. The costs of sale were also agreed at £65,175. Both valuers agreed that the appropriate basis of valuation, in respect of the open market value of the subject property at both 1997 and, in connection with holding costs, 1993 was the residual method.

  4. The "holding costs" incurred by Ryde during the period in which the sale of the properties was delayed by the scheme were dealt with separately. In a preliminary decision, HH Judge Rich QC ([2001] RVR 59) had held that such "holding costs" were in principle compensatable under section 5, rule (6) of the Land Compensation Act 1961 ("the 1961 Act"). The amount, if any, to be paid for holding costs was in issue before Mr Francis, but is not part of this appeal.
  5. Accordingly, we are solely concerned with the assessment of compensation payable for the acquisition of the property at the valuation date.
  6. The law

  7. The relevant statutory law is in the Land Compensation Act, 1961, section 5, which reproduced rules first enacted in the Acquisition of Land Act 1919. Rules (2) and (6) are relevant in the present case. They provide:
  8. "(2) The value of land shall… be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realize:
    (6) The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land:"
  9. By way of background it is sufficient to refer to a recent authoritative statement of the basic principles of compensation law (in relation to equivalent provisions in Hong Kong) in Director of Buildings v Shun Fung Ltd [1995] 2 AC 111 PC, where Lord Nicholls said (p 125C-H):
  10. "The purpose…is to provide fair compensation for a claimant whose land has been compulsorily taken from him. This is sometimes described as the principle of equivalence. No allowance is to be made because the acquisition was compulsory; and land is to be valued at the price it might be expected to realise if sold by a willing seller, not an unwilling seller. But subject to these qualifications, a claimant is entitled to be compensated fairly and fully for his loss. Conversely, and built into the concept of fair compensation, is the corollary that a claimant is not entitled to receive more than fair compensation: a person is entitled to compensation for losses fairly attributable to the taking of his land, but not to any greater amount. It is ultimately by this touchstone, with its two facets, that all claims for compensation succeed or fail.
    Land may, of course, have a special value to a claimant over and above the price it would fetch if sold in the open market. Fair compensation requires that he should be paid for the value of the land to him, not its value generally or its value to the acquiring authority. As already noted, this is well-established. If he is using the land to carry on a business, the value of the land to him will include the value of his being able to conduct his business there without disturbance. Compensation should cover this disturbance loss as well as the market value of the land itself. The authority which takes land on…compulsory acquisition does not acquire the business, but the...acquisition prevents the claimant from continuing his business on the land. So the claimant loses the land and, with it, the special value it had for him as the site of his business……In practice it is customary and convenient to assess the value of the land and the disturbance loss separately, but strictly in law these are no more than two inseparable elements of a single whole in that together they make up the value of the land to the owner…"
  11. The nature of the award as "a single whole" is reflected in the fact that interest, at the prescribed rate, is payable on the whole of the award (whether under rule (2) or (6)) from the date when the authority took possession (Compulsory Purchase Act 1965 s 11(1)).
  12. The issue between the parties

  13. Ryde's valuer (Mr Plant) based his valuation on the assumption that –
  14. "… the claimant would, after obtaining vacant possession, refurbish and sell each of the flats and bungalows (apart from the warden's accommodation) individually over an 8 month period, and would then dispose of the freehold reversion to an investor."

    Accordingly, his valuation started from the expected total sales revenue of the individual flats (£2,370,000), which was adjusted downwards (in summary, to reflect costs of cleaning and marketing, sales costs, and the fact that sales price would be achieved over 8 months), to give a final figure (after adding the "freehold investment value") of £2,400,000.

  15. Miss Ellis, for LRT, assumed a sale as a single lot to a purchaser on the valuation date. She described the likely purchaser:
  16. "The purchaser, who would most likely be an entrepreneur would, in effect, buy the property 'wholesale' with a view to 'retailing' the units individually. This was known in the trade as 'break-up'. In formulating his bid, the prospective purchaser would take into account what was required to be spent to bring all but one of the units into a suitable condition to be sold as sheltered accommodation, with the final unit to be retained for warden's accommodation. He would also build in a requirement for profit to cover his costs, risks and effort in undertaking the project." (para 17)

    Her valuation was constructed in a rather different way to that of Mr Plant. She started from the "ultimate value" for the freehold of £2,585,000, from which she deducted figures for "profit", pre-sale works, finance costs over 9 months, and site purchase costs, to give a final "site value" of £1,960,000.

  17. For present purposes the differences in detail are immaterial, save for the deduction for "profit". In her written evidence to the Tribunal, she had explained this element by reference to a familiar textbook:
  18. "As for any risk enterprise, a person undertaking development will seek to make a profit on the operation. Target levels of profit will depend on the nature of the development and allied risks, the competition for development schemes in the market, the period of the development and the general optimism in relation to that form of development." (Johnson, Davies and Shapiro, Modern Methods of Valuation (9th Ed))

    The Tribunal recorded:

    "Miss Ellis said that in view of the inherently limited risks of the project, a purchaser would be satisfied with 7.5% profit. For instance, outlay on building costs was relatively small and the development/sales period quite short as compared with most development projects." (para 20)
  19. The difference of principle between the experts is apparent from the Tribunal's summary of their evidence. Mr Plant thought the valuation should reflect the Claimant's special position:
  20. "The claimant was in the business of developing sheltered housing and, if it were not for the scheme, would have marketed and sold the units to individual purchasers at a profit. To assess compensation on the basis that, as the acquiring authority had done, the claimant would be deprived of profit that it would otherwise have achieved, was tantamount to paying less for the land, due to the scheme, than it was really worth." (para 9)

    The Tribunal recorded Miss Ellis' comment on this in cross-examination (a passage strongly relied on by Mr Katkowski QC, for the claimant):

    "She said that whilst she thought the RICS definition of open market value obliged her to adopt the single-sale method, she accepted that in the no-scheme world the claimant would have sold the units individually and retained the profits from the development. Thus, a higher figure would have been achieved than that which she was assessing as compensation under the 1961 Act." (para 24)

    In submissions, Mr Harper for LRT submitted that "the key difference between the parties came down to who was going to take the profit".

    The Tribunal's decision

  21. The Tribunal's determination was in two stages. In an interim decision (issued on 4th December 2002) it dealt with the issues of market value under rule (2), and holding costs. The parties were invited to make further submissions "in respect to the disturbance claim for loss of profits in accordance with rule (6)" (para 46). Following written submissions on that issue, including reference to a number of authorities, its final decision was dated 28th March 2003. Contrary to its earlier view, it decided that no additional claim could be made under rule (6). To understand this change of view, it is necessary to refer to the reasoning at each stage.
  22. In relation to rule (2), the Tribunal had drawn the parties' attention to an unreported decision (Hooper v City and County of Swansea (2000) (LT) ACQ/68/1997), in which the issue had been the compensation to be paid for the compulsory acquisition of an area of agricultural land which had the potential for a self-build development of 15 plots. The claimant had argued that the correct approach was "to start from the aggregate retail value of 15 serviced plots on the site, to be sold to different individuals over a period". The member (Mr N Rose FRICS) had rejected that approach as "fundamentally erroneous":
  23. In my opinion, the reference in s5(2) to the land being 'sold in the open market', together with the parties' agreement that the valuation date was 27 February 1996, means that the sale of the land is assumed to have taken place at that date, not over a period of 12 months or more commencing with that date… the expression 'market value' has no realistic meaning in the absence of an assumed sale on the market."

    He had accepted the authority's evidence that:

    "… the most likely purchaser of the land on that basis would have been a developer who intended to carry out works to make it saleable to purchasers requiring individual self-build plots".
  24. Mr Francis thought that the same principle applied in the present case: under rule (2) an open market sale was to be assumed at the valuation date. In substance he agreed with Miss Ellis' approach to the valuation (while differing on some of the detail), and he accepted (as "more than fair") her deduction of 7.5% for developer's profit (para 45). He assessed the market value as £2,060,000. That figure, as the appropriate award under rule (2), is not now in issue.
  25. However, he considered that a separate claim for the lost profit could be made under rule (6). He explained it as follows:
  26. "Under rule (6) a claimant is entitled to be compensated for any loss of profits, in business carried out on the land acquired, that is attributable to the compulsory acquisition. That is not just loss of profits in the shadow period prior to the acquisition, but also profits that it would have achieved in the post acquisition period. It does not seem to me that the fact that the business of the claimant is a property developer, where the profits are derived from the land itself, is any reason in principal for denying him compensation for loss of profits. If the claimant ran a business from the site, such as a shop, and from that shop he made a profit, he would be entitled, as an item of disturbance under rule (6), to compensation for any losses of profit occasioned by the compulsory acquisition. The question is one of causation. If, in the absence of the compulsory acquisition, he would have made a profit that is not reflected in the value of the land assessed under rule (2), he is in principle entitled to be compensated for that loss under rule (6)." (para 38)
  27. At this stage, he rejected the authority's submission that the claimant would be getting "double profits":
  28. "It is necessary to consider the nature of the claimant's business. Were it not for the scheme, (and this point was not in issue) it would have sold the flats and bungalows over a period of around 9 months, and could, had it so wished, have then sold the freehold reversion. The 'ultimate', or gross, figure it would have achieved was £2,585,000. That money, less the sales, marketing and other costs to which I will turn, would be available to be ploughed into the next site. That next development would in turn show a profit, and so the cycle would continue. If, as was the acquiring authority's case, the profit from the development at the subject property was denied to the claimant then that figure would not be available to go towards the next deal, and the claimant would therefore be disadvantaged." (para 35)
  29. As I have said, the Tribunal changed its view, following the exchange of written submissions, including reference to two authorities, in particular: D M'Ewing & Sons v. Renfrewshire CC [1960] SC 53, and Pastoral Finance Association v. The Minister [1914] AC 1083 (to which I shall return). In the light of them, the Tribunal decided that no claim could be made under rule (6):
  30. "101. What the claimant receives by way of compensation (the value of the land) is a sum that it can invest elsewhere in order to make a profit. It is put in the same position as it would have been in, at the valuation date, if the land had not been compulsorily acquired. If the claimant is kept out of its money for any period after the date it loses possession, it will receive interest – to reflect what that money would have been worth to it if it had been paid on the date of entry. Since the claimant obtains compensation for the land that reflects its potentiality for profit making, and interest that reflects the cost of borrowing money to invest in another profit-making venture, it is fully compensated."

    Discussion

  31. I have no doubt that the Tribunal's second thoughts were correct. So far as rule (2) is concerned, it is important to remember that it envisages a hypothetical exercise, although conceived as taking place in a real market. The exercise was perhaps most clearly described by Hoffmann LJ, dealing with a sale "in the open market" under the capital transfer tax legislation (IRC –v- Gray [1994] STC 360, 371H-372C). Under the heading "The statutory hypothetical sale", he said:
  32. "Certain things are necessarily entailed by the statutory hypothesis. The property must be assumed to have been capable of sale in the open market, even if in fact it was inherently unassignable or held subject to restrictions on sale. The question is what a purchaser in the open market would have paid to enjoy whatever rights attached to the property at the relevant date (see IRC –v- Crossman [1937] AC 26). Furthermore, the hypothesis must be applied to the property as it actually existed and not to some other property, even if in real life a vendor would have been likely to make some changes or improvements before putting it on the market (see Duke of Buccleuch v IRC [1967] 1 AC 506 at 525). To this extent, but only to this extent, the express terms of the statute may introduce an element of artificiality into the hypothesis.
    In all other respects, the theme which runs through the authorities is that one assumes that the hypothetical vendor and purchaser did whatever reasonable people buying and selling such property would be likely to have done in real life. The hypothetical vendor is an anonymous but reasonable vendor, who goes about the sale as a prudent man of business, negotiating seriously without giving the impression of being either over-anxious or unduly reluctant. The hypothetical buyer is slightly less anonymous. He too is assumed to have behaved reasonably, making proper enquiries about the property and not appearing too eager to buy. But he also reflects reality in that he embodies whatever was actually the demand for that property at the relevant time. It cannot be too strongly emphasised that although the sale is hypothetical, there is nothing hypothetical about the open market in which it is supposed to have taken place. The concept of the open market involves assuming that the whole world was free to bid, and then forming a view about what in those circumstances would in real life have been the best price reasonably obtainable."
  33. Under the heading "Splitting and joining" he referred to Duke of Buccleuch –v- IRC [1967] 1 AC 506 where Lord Wilberforce had said (at p 546):-
  34. "When, as is usually the case, the estate consists of an aggregate of items of property, each item must be separately valued, and it is not difficult to see that problems may arise as to the manner in which the separate units of valuation are to be ascertained or in which individual items are to be grouped into units of valuation. These problems must necessarily be resolved, as they are in practice, in a common sense way. The estate is to be taken as it is found: it is not to be supposed, in order to obtain higher figures of valuation, that any substantial expense is to be incurred or work done in organising the estate into units: on the other hand, some practical grouping or classification, such as can reasonably be carried out without undue expenditure of time or effort, by a prudent man concerned to obtain the most favourable price, may be supposed."

    Hoffmann LJ summarised the position:-

    "This shows that whether one is taking apart or putting together, the principle is that the vendor must be supposed to have 'taken the course which would get the largest price for the combined holding', subject to the caveat in Buccleuch that it does not entail 'undue expenditure of time and effort'." (p 373 f-g).

    The principles applicable to rule (2) in the Land Compensation Act are in principle no different.

  35. It follows that the Tribunal was right to accept the approach of Miss Ellis based on an assumed sale on the valuation date. It is irrelevant that, in the real world, Ryde would not in fact have sold on a single date, but would have refurbished and marketed the flats as individual units over a period of months. That evidence is only indirectly material, in providing a basis for the assumption to be made about the hypothetical purchaser. It does not of course have to be assumed that the sale would be as a single unit. It is to be assumed that the vendor would market the property in the manner calculated to achieve the best price. However, this does not assist Ryde in the present case. The property must be assumed to be sold in its existing state. In this case it is common ground that in order to achieve the agreed "ultimate" price, expenditure would first need to be incurred in refurbishment. That potential was fairly taken into account by assuming a sale to an "entrepreneur" would carry out the same project.
  36. Central to Mr Katkowski's argument is the deduction made in the Tribunal's valuation of a figure for "profit", based on Miss Ellis' evidence. He relies on her admission that, in the real world, the "profit" would have been realised by Ryde. He also gains comfort from the Tribunal's initial view that, to achieve "equivalence", this element of loss should be the subject of compensation.
  37. In my view, this submission is based on a misunderstanding of the purpose of the deduction for "profit" in a valuation of this kind. In Shun Fung (above. p 132), Lord Nicholls explained the three ingredients to be taken into account in arriving at the present value of a sum expected to be received in the future. They may be termed the "time factor", the "inflation factor" (which does not arise in this case), and the "risk factor". The "time factor" refers to -
  38. "… the rate of return the potential purchaser would expect on his money, assuming that the payment to him at the future date is free of risk." (p 132D)

    The "risk factor" takes account of the fact that:

    "the greater the risk that the purchaser may not receive in due course the future payments he is buying, the higher the rate of return he will require" (p 132E).

    As Miss Ellis explained, her percentage deduction for "profit" (adopted by the Tribunal) related to the risk factor. It represented the hypothetical purchaser's required return for the risk involved in carrying out the project. The low degree of risk in this case was represented by a low percentage deduction. The time factor was separately allowed for by a deduction of 8.5% in respect of "finance".

  39. Accordingly, her admission that in the real world Ryde would have realised the "profit" is not inconsistent with her valuation in the hypothetical sale required by rule (2). It is true that the acquisition deprived Ryde of their expected profit, but it also relieved them of the corresponding risk. Therefore, there was no reason for the loss of profit to be the subject of separate compensation, and no departure from the principle of equivalence. At the date of entry, Ryde's interest in the land, as a source of expected future profit, was replaced by a different asset, in the form of a statutory debt. The delay between the acquisition of that new asset and its realisation was compensated by the right to statutory interest at the prescribed rate.
  40. It follows, in my view, that there was no separate head of loss which fell to be compensated under rule (6). However, in view of the submissions made on that rule, I would add some brief comments. As Scott LJ explained in Horn v Sunderland Corporation [1941] 2 KB 26, rule (6) was designed to preserve the effect of the 19th Century case-law (under the Land Clauses Consolidation Act 1845) by which personal loss caused by the compulsory acquisition was treated as part of the value to the owner of the land:
  41. "… the owner in a proper case – that is, in a case where he really does incur a loss of money by disturbance due to the taking over and beyond the loss for which he is to be reimbursed in respect of the land taken – is entitled, because it has to do with the land, to have that element of the loss taken into the reckoning of the fair price of the land, as has been held by the Courts from a very early stage." (p 45).

    He was using the word disturbance "for brevity" (p 43). He recognised that the personal loss under the second part of rule (6) was not confined to the effects of "disturbance" in the narrow sense of the displacement of an occupier. The potential width of rule (6) is illustrated by more recent cases (see Wrexham Maelor BC –v- MacDougall [1993] 2 EGLR 23, Dublin City –v- Underwood [1997] 1 IR 117, and the discussion of these cases in Law Commission: Compensation Final Report, Law Com 286, para 4.4 ff).

  42. However, rule (6) specifically excluded compensation for any matter "directly based on the value of land". The purpose of this was clearly to avoid any potential overlap with the market value principle, introduced by rule (2), in order to provide a more certain and objective test of land value than the somewhat arbitrary criteria applied by juries under the previous law (the "evil of excessive compensation" to which Scott LJ referred in Sunderland at p 40). Any additional value which might have been represented by the potential for marketing the flats separately would in my view have been "directly based on the value of land". Thus, even if it had otherwise qualified as a loss caused by the acquisition, it would have been excluded from the scope of rule (6).
  43. Finally, I should comment briefly on the authorities referred to by the Tribunal and in argument before us. The Pastoral Finance case, although of high authority, was concerned with the Australian equivalent of the 1845 Act, and is therefore an unsafe guide to the interpretation of the rules introduced in this country in 1919. The M'Ewing case was a decision of the Court of Sessions on facts which were not dissimilar to the present case. The reasoning of Lord Clyde is entirely consistent with the views expressed above. Lord Clyde found support in a passage in Cripps on Compulsory Acquisition of Land, 10th Ed, para 4-236, which stated:-
  44. "Loss of profits on development of a building site is not a subject of compensation. The profitability of the land has already been reflected in the market value of the land."

    That passage was supported by reference to two English Divisional Court cases, Collins –v- Feltham UDC [1937] 4 AllER 189, and Wimpey & Co –v- Middlesex CC [1938] 3 AllER 781. Unfortunately the reported decisions in those two cases take the form simply of answers to questions raised by the stated cases, without any more detailed reasoning. However, they show that the law as I have attempted to explain it is consistent with the what has been understood for very many years.

  45. Mr Katkowski also relied on a "close analogy" with a decision of this Court in Mallick –v- Liverpool City Council [1999] 2 EGLR 7. I will comment briefly on that decision, because, although I have no doubt as to the correctness of the decision, I would respectfully query some of the reasoning in the leading judgment of Henry LJ. The case concerned a claim by an owner of property let on 15 residential tenancies. Following a compulsory purchase order the property had been vested in the authority in January 1989, but the value of the property under rule (2) was not determined until October 1993. The claimant had advanced a claim under rule (6) seeking compensation for the loss resulting from non-receipt of rent between the date of possession and the payment of the full value of the property. He contended that because of lack of funds he was unable to invest in a similar property. The claim was rejected by the Tribunal and by the Court of Appeal.
  46. The Tribunal had rejected the claim on the grounds that the compensation awarded for the freehold property precluded a further claim -
  47. "… since the rents on which the capital value was calculated constitute the whole of the profit derived from the ownership of this property." (see p 8 K-L).

    In upholding the decision, the Court of Appeal treated the case as analogous to that of a business carried on on the subject land. Henry LJ said:-

    "Rule (2) deals with the basic market value calculation but that rule (2) calculation will differ depending on whether it is anticipated that the business will be moved to a new site or whether it cannot be re-located: …. In the former case it is assumed that with the compensation paid he has acquired an equivalent property suitable for the business, and under rule (6) ….the claimant will recover the disturbance costs of the move, which may well include a temporary loss of profit, if caused by the move. But where the business cannot be re-located, the rule (2) calculation will be for the value of the business as a going concern, i.e. the value of the land and the profits that go with it." (p 9F).

    He treated the case before him as one where the claimant had been compensated "on the extinguishment basis"– the loss to him of his business as a going concern" (p 10E). In approaching it in that way he relied on the principles stated in the Shun Fung case as to compensation for business disturbance.

  48. With respect, I would not regard those principles as applicable to Mr Mallick's case, where the business was no more than the letting of residential property. The principles referred to in the Shun Fung case were concerned with a separate business (in that case a steel works) carried on on the subject land. In such a case it is well-established that, in addition to the market value of the land, the owner is entitled to the reasonable costs and losses incurred in relocating his business ("the relocation business"); or, if relocation is not possible, the going concern value of the business ("the extinguishment basis"). I am aware of no precedent (before Mallick) for applying those principles to a business which consists simply in the letting of parts of a property. In such a case, as the Tribunal correctly said, the potential rent is taken into account in the market value of the property under rule (2). (See also Watson –v- Secretary of State for Air [1954] 3 AllER 582, where it was held by this Court that the award of market value for agricultural land precluded a separate claim under rule (6) for the value of crops which would have been taken from the land.) Accordingly, in my view, the Mallick case, correctly interpreted, provides no support for Mr Katkowski's arguments.
  49. Conclusion

  50. For these reasons I would dismiss this appeal, and confirm the Tribunal's award.
  51. Lord Justice Mance

  52. I agree
  53. The Vice-Chancellor

  54. I also agree
  55. Order: Appeal dismissed. Agreed minute of order lodged with court. Permission to appeal was refused.
    (Order does not form part of the approved judgment)


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