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    [2002] EWLands ACQ_23_1999 (25 July 2002)

    ACQ/23/1999
    LANDS TRIBUNAL ACT 1949
    COMPENSATION – acquisition following purchase notice – plot of land on line of road – ransom value – whether planning permission would be granted on adjoining land with a requirement to complete the road across the reference land – assumed purchase arrangements – claimants' case rejected – compensation awarded at authority's figure of £100,000
    IN THE MATTER of a NOTICE OF REFERENCE
    BETWEEN JOSEPH ROLAND RICHARDS
    and
    JOANNE VALERIE RICHARDS Claimants
    and
    SOMERSET COUNTY COUNCIL Acquiring
    Authority
    Re: Land adjoining British Telecom Radio Station,
    Burnham-on-Sea, Somerset
    Before: P H Clarke FRICS
    Sitting at 48/9 Chancery Lane, London WC2
    on 15-19 and 22-26 April 2002
    The following cases are referred to in this decision:
    Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426
    Waterworth v Bolton Metropolitan Borough Council (1978) 37 P & CR 104
    Porter v Secretary of State for Transport [1996] 3 All ER 693
    Trocette Property Co Ltd v Greater London Council (1974) 28 P & CR 408
    Margate Corporation v Devotwill Investments Ltd [1970] 3 All ER 864
    Lady Fox's Executors v Commissioners of Inland Revenue [1994] 2 EGLR 185
    Marson v Hasler [1975] 1 EGLR 157
    The Ikerian Reefer [1993] 2 Lloyd's LR 68
    Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatum [1939] AC 302
    Mr Leslie Blohm instructed by Clarke Wilmott and Clarke, solicitors for the claimants
    Mr Guy Roots QC and Mr Robert Walton instructed by County Solicitor for Somerset County Council

     
    DECISION
  1. This is a determination of the compensation payable for a small parcel of vacant land on the line of the eastern distributor road of Burnham-on-Sea acquired under a purchase notice in August 1999. It follows a decision on preliminary issues to establish the basis of valuation. The claimants seek compensation in the sum of £4.8m on the grounds that the land had a ransom value relative to the development of other land. The acquiring authority acknowledge that the land had a value above existing use but put that value at £100,000.
  2. Mr Leslie Blohm of counsel appeared for the claimants and called:-
  3. (i) Mr Robert Alford MCIOB, a director of Prowting Homes South West Limited of Bridgwater;
    (ii) Mr Marcus Plaw BSc MRTPI, a senior planner at Alder King, Bristol;
    (iii) Mr Anthony Peter Humphreys BSc CEng MICE MIWEM of Hyder Consulting Limited;
    (iv) Mr Martyn Jones BSc FRICS MICIArb, a partner in Alder King, Bristol.
  4. Mr Guy Roots QC and Mr Robert Walton appeared for the acquiring authority and called:-
  5. (i) Mr Nicholas Alexander Tait BSc BTP MRTPI, a planning policy team leader in the Local Plans Section of Sedgemoor District Council;
    (ii) Mr Michael John Betty FIHIE, infrastructure manager in the Transport Development Group of the Environment and Property Department of Somerset County Council;
    (iii) Mr Charles Chivers BSc FRICS, a partner in Bruton Knowles, Gloucester.
    FACTS
  6. A comprehensive statement of agreed facts was prepared for the preliminary issues hearing and the parties have prepared several further statements of agreed facts. From these statements and the evidence I find the following facts.
  7. Rosewood Farm
  8. On the eastern edge of the built-up area of Burnham-on-Sea is an area of land known as Rosewood Farm. Much of this land has now been developed with a public house (The Rosewood) and supermarket and housing. There is a former refuse tip on the land. Rosewood Farm is bounded on the north by Love Lane which runs west to east from the centre of Burnham-on-Sea to a roundabout adjoining the north-eastern corner of the land with links to Love Lane North, which runs north to Stoddens Road at Middle Burnham, and Edithmead Link Road (B3140) (The Queens Drive) which runs eastwards to join the A38 and M5 at junction 22. The eastern boundary of Rosewood Farm is the eastern distributor road ("the EDR") where built and the line of the road, where unbuilt, including the reference land. This road and the line of the unbuilt road run approximately south south-east from the Love Lane roundabout to a roundabout adjoining the south-eastern corner of Rosewood Farm at the junction of Wallace Wells Road, Worston Lane (now pedestrian and cyclists only), Worston Road and Pepperall Road, which runs south to join Burnham Road (B3139). The southern boundary is Worston Lane which runs westerly towards the centre of Burnham-on-Sea. To the west Rosewood Farm adjoins housing to which it is linked at Ashcott Drive. To the east of the EDR is largely flat pasture land divided by rhynes and hedges. Close to the south-eastern roundabout, to the east of the EDR is a British Telecom radio station (Portishead Radio Station) comprising masts, modern and older buildings and car parking with an entrance in Worston Road. To the east of the open land, running north to south, is the Bristol to Taunton railway line.
  9. At the valuation date numerous residential planning permissions (with associated planning agreements) had been granted from January 1988 in respect of development at Rosewood Farm. None were conditional on the completion of the EDR across the reference land and none required the EDR to be completed in its entirety between Love Lane and Pepperall Road in connection with the development of any part of Rosewood Farm. On 25 September 1995 planning permission was granted for the erection of a neighbourhood shopping centre on the northern part of Rosewood Farm, immediately to the south of Love Lane. This permission was amended in September 1995 by the grant of planning permission for the erection of a petrol filling station, take-away restaurant and parking, and in December 1995 for an extension to the shopping centre and for the erection of a petrol filling station. On 6 October 1998 the permission of September 1995 for the erection of a petrol filling station was renewed.
  10. The EDR
  11. On 16 June 1976 the Planning and Transportation Committee of Somerset County Council ("Somerset") resolved to approve in principle the line of a distributor road (the EDR) from the Berrow/Highbridge Road (B3139) in the south to north of Stoddens Road and to request Sedgemoor District Council ("Sedgemoor") to protect the line and include it in any plans for the area.
  12. On 14 March 1977 the Planning Committee of Sedgemoor resolved that the line of the road should be protected for development control purposes pending preparation of the local plan for Burnham-on-Sea. Any final decision on the alignment of the road should be determined in the context of that plan. The line of the road has been protected by Sedgemoor in successive local plans since 1977.
  13. On 7 June 1999 Burnham-on-Sea and Highbridge Town Council suggested that the EDR from Tesco to the BT radio station should be named Frank Foley Parkway.
  14. Adopted local plan
  15. Following approval of a Local Plan Brief in May 1982 Sedgemoor commenced work on the preparation of a local plan and published the Consultative Burnham-on-Sea Local Plan for public participation in October 1984. The EDR between Love Lane and Pepperall Road was shown as a protected road line on this plan. Rosewood Farm was not allocated for housing. A draft local plan was published on 1 June 1988. This included the line of the EDR and the proposed allocation of land for housing at Rosewood Farm. Following a public local inquiry in February 1989 modifications were made to the draft local plan and it was adopted as the Burnham-on-Sea Area Local Plan ("the adopted local plan") on 8 April 1990. This plan was in force at the valuation date. Three proposals in this plan are material.
  16. Proposal BH/H4 provides for the allocation of 28.5 hectares of land between Love Lane and Worston Lane for residential development (Rosewood Farm) to ensure the continued supply of land for new housing to satisfy the requirements of Policy SP2 in the structure plan and to secure the construction of a major section of the EDR (Proposal BH/T4). Proposal BH/S2 provides for the allocation of land in the north-eastern corner of Rosewood Farm for retail uses to serve local needs.
  17. Proposal BH/T4 refers to the construction of part of the EDR between Worston Lane and Stoddens Road, in conjunction with the development of adjacent land. The previously identified continuation of this route northwards beyond Stoddens Road will continue to be a protected road line. This proposal is to secure the provision of an improved highway network to serve the urban area and to ensure that new residential development in this area has suitable access to the route hierarchy. The road is to be constructed to district distributor road standards. Timing will be dependent upon the phasing of adjacent development in the remaining parts of the Love Lane development and at Rosewood Farm. Developers will be required to enter into legal agreements to secure appropriate financial contributions The responsibility is Somerset and the private sector.
  18. The reference land is on the line of the EDR and no part is within the area allocated for residential development in the local plan.
  19. Development guide for Rosewood Farm
  20. The adopted local plan refers to a development guide for the Rosewood Farm area. This is the "Development Guide for Residential Development at Rosewood Farm, Burnham-on-Sea" prepared by Sedgemoor and dated January 1989 ("the development guide"). It was in force at the valuation date.
  21. The development guide establishes the basic road framework and open space layout for residential development at Rosewood Farm under Proposal BH/H4 in the adopted local plan. Construction of the EDR on the eastern boundary of Rosewood Farm at the developers' expense is a fundamental requirement of the scheme. The purpose of the development guide is to provide the necessary comprehensive guidance to ensure that building on the identified parcels of land takes place in an appropriate sequence and leads to an integrated overall layout, appropriately served by roads and main services to form a satisfactory residential environment. The guide establishes the basis for the equitable apportionment of developers' payments for the infrastructure and provides for development in three phases.
  22. The development guide provides for the EDR to be constructed at developers' expense in sections as housing development proceeds. The scheme is to be phased from the northern end of Rosewood Farm. The phasing arrangements will require completion of a local distributor road ("the LDR") at an appropriate stage. Roads provided by developers must be in accordance with Estate Roads in Somerset or such other standards as Somerset may determine.
  23. Developers will be expected to fund all infrastructure at Rosewood Farm. Where facilities serve the total area (e.g. the EDR and major public open space) costs will be shared in proportion to the area of the developer's land. For other infrastructure, developers will be required to install all necessary on-site services. Developers will be required to contribute to the construction of the EDR in either of two ways: by payment to Somerset for each hectare of residential development land or by construction of the road to standards specified by Somerset.
  24. The section of Worston Lane (on the southern edge of Rosewood Farm) will, subject to the agreement of Somerset, be closed to vehicles upon completion of the EDR and thereafter become a pedestrian/cycleway route.
  25. The plan which forms part of the development guide shows the reference land on the line of the EDR. The eastern boundary of Rosewood Farm is contiguous with the western boundary of the reference land. The part of Rosewood Farm to the west of the reference land is shown as an area of tree planting and then residential development. No part of the reference land is in an area allocated for residential development in the development guide.
  26. The development guide notes that proposed supermarket schemes for the neighbourhood centre have been refused planning permission because of the likely adverse effects upon the vitality and viability of existing town centres. The site is considered suitable for a smaller scheme to serve as a neighbourhood shopping centre: shop units and possibility a small supermarket (up to 500 sq m gross) are envisaged. The site could accommodate a petrol filling station (possibly with a car showroom) or might be appropriate for a DIY retail warehouse. The balance of any land unused would be suitable for housing.
  27. Structure plan review
  28. In February 1995 Somerset published the Consultation Draft of a Review of the Structure Plan (Alteration No.2), to cover the period from 1991 to 2011. In February 1997 the deposit plan was published. Policy 35 and paras 6.4 to 6.74 make provision for additional housing in the county. Subject to further consideration by the Secretary of State, provision will be made for a total of about 44,300 dwellings over the period 1991-2011, distributed between the district councils with 9,100 additional dwellings allocated to Sedgemoor.
  29. In January 1998 an examination in public was held into the structure plan review. A report was published in May 1998 and recommended an increase in additional dwellings from 44,300 to 51,600 with the Sedgemoor allocation increased to 10,000 (para 6.26 of the Panel's report). The Panel subsequently issued an addendum report rectifying an error in their calculations, reducing the Sedgemoor allocation to 9,800 dwellings. Somerset published modifications to the deposit draft structure plan in 1998. For Sedgemoor provision was made for 9,200 additional dwellings. In April 2000 the Secretary of State indicated that he would not intervene in the adoption of the Somerset structure plan review. The plan was adopted with the original lower housing figures proposed by Somerset.
  30. Sedgemoor deposit draft local plan
  31. In 1995 Sedgemoor commenced the preparation of a district-wide local plan, the work being undertaken in parallel with the emerging structure plan review. In January 1995 the Sedgemoor District Local Plan Working Group was constituted. The Sedgemoor Local Plan Brief was published in the following May. It indicated how Sedgemoor proposed to formulate a plan in conformity with national, regional and strategic guidance and set out the prime purpose and objectives of the plan. Between March and May 1998 Sedgemoor published a consultation document, Sedgemoor Local Plan 1996 – 2011: Major Planning and Environmental Issues. This did not include particular sites for housing development. It was circulated for consultation. A summary leaflet in newspaper format, incorporating a form for comments, was widely circulated. On 19 June 1998 the working group met to consider the responses. The BT radio station was suggested as a development site (later to be included as housing allocation H16 in the deposit draft local plan). There was further public consultation in September and October 1998. Burnham-on-Sea and Highbridge was the second most suggested housing area.
  32. On 19 January 1999 the working group recommended that a deposit draft local plan should be prepared on both the higher and lower housing land allocations in the emerging structure plan, namely on the figures in the structure plan deposit draft and the Panel's recommendations respectively. The group recommended that land at Brue Farm and land adjoining the radio station (subsequently allocation H22) be allocated for housing under the lower figures. If the higher housing figures are approved, these sites should be allocated with the addition of possible sites at Highbridge Caravans and Burnham Level (subsequently allocation H24). On 18 February 1999 the working group confirmed allocations H22 and H24 for the higher housing provision. On 8 March 1999 the Planning and Transportation Committee of Sedgemoor received the recommendations of the working group and requested that further consideration be given to the possible allocation of a large greenfield site for housing to the north of Stoddens Road in association with the continuation of the EDR. On 17 March 1999 the Policy and Resources Committee considered a report on the higher and lower housing allocations and recommended that, subject to a check on legality, both options should be included in the deposit draft for public consultation. At a council meeting on 24 March 1999 this recommendation was considered. It was resolved that option 1 should be included in the deposit draft as the preferred option (subsequently allocations H22, H23 and H24) but it was recognised that a case could be made for the second option. The council welcomed views on this in response to the statutory deposit process. The deposit draft local plan was approved by the council for formal deposit for public consultation.
  33. On 25 May 1999 the Planning (Development Control) Committee of Sedgemoor resolved to treat the proposals in the deposit draft local plan as a material consideration in the determination of planning applications received after 21 June 1999.
  34. The Sedgemoor District Local Plan Deposit Draft ("the deposit draft local plan") was published on 21 June 1999. It was widely advertised in the local press and comments were invited by 2 August 1999. After publication the following events occurred. In April 2000 the Secretary of State indicated that he would not intervene in the adoption of the Somerset structure plan review. It was adopted with the lower housing position 44,500 dwellings with 9,200 in Sedgemoor. Sites allocated in the deposit draft local plan under the higher provision were deleted, including allocations H22 and H24. The changes were put on deposit from 30 October to 11 December 2001. An objection was made in respect of the deletion of allocation H22; no objections were made to the deletion of H24. Further pre-inquiry changes were placed on deposit from 29 July to 10 September 2001. The inquiry into the deposit draft local plan commenced on 6 November 2001 and was expected to finish on 23 May 2002.
  35. The following parts of the deposit draft local plan are material to this reference.
  36. Paragraphs 4.04 to 4.07 explain housing land requirements. In January 1998 Somerset published modifications to the deposit draft structure plan following an examination in public. For Sedgemoor provision was made for 9,200 additional dwellings for the period 1991-2001 compared to 9,800 as recommended by the Panel. The Secretary of State is likely to direct the higher figure. The deposit draft local plan has been prepared on high and low housing requirements of 9,800 and 9,200 additional dwellings respectively. Amendments were later proposed to ensure conformity with the adopted structure plan. Housing land allocations are considered as "brownfield" or "greenfield" sites. In this decision the land within Proposals H16, H22 and H24 is referred to as "the housing allocation land."
  37. One of the brownfield sites identified for housing development is the British Telecom radio station, situated to the south-east of Rosewood Farm, to the east of the EDR where it joins the Worston Road and Pepperall Road roundabout. Proposal H16 allocates this land for housing development for 120 dwellings. It adjoins a greenfield site to the north which is also allocated for housing (Proposal H22). A comprehensive development and design brief will be required for both sites. The proximity of the gassing landfill site at Rosewood Farm may need to be considered as part of site development and building design. The design brief for this land in Appendix 4.1 to the deposit draft includes the following. The site should preferably be developed comprehensively with land to the north (H22). If development proceeds in advance of a comprehensive scheme, then a landscape buffer and edge treatment to the north-western and north-eastern boundaries will be required. Vehicular access to the site shall only be from Worston Road (adjoining no.148) or from the north in conjunction with the development of H22. The development shall include a comprehensive framework of cycle and pedestrian routes with links to Rosewood Farm and King Alfred Community School.
  38. Two of the greenfield sites allocated for housing are material to this reference (H22 and H24). These form part of the pasture land to the east of the EDR with an irregular eastern boundary, a track known as Board's Lane. The two options were considered for greenfield housing development in Burnham-on-Sea and Highbridge. Option 1 refers to three sites (including Proposals H22 and H24) and option 2 refers to a single site (north of Stoddens Road). The Council considers that the greatest advantage lies with option 1. This is proposed in the local plan. If the high housing requirement in the structure plan is confirmed the local plan will include three greenfield sites at Burnham-on-Sea and Highbridge; if the low requirement is confirmed, two greenfield sites will be included.
  39. Proposal H22 refers to the land north of the radio station (10.8 hectares), a site for 250 dwellings. This is situated to the east of the EDR (which forms the western boundary) and extends northwards for roughly half the length of the EDR between Love Lane and Pepperall Road. The reference land forms part of the line of the EDR abutting this land. This site is proposed for both the high and low housing requirements. Developed comprehensively with the radio station (H16) it can be accessed directly from the EDR, Pepperall Road and Worston Road. A new primary school (1.5 hectares) is proposed as part of the site (Proposal PCS 10) The design brief includes: provision for access to King Alfred Community School and the wider cycle and pedestrian network; and for vehicular access only from Pepperall Road and Worston Road.
  40. Proposal H24 refers to land at Burnham Level (11.6 hectares), a site for 300 dwellings. This is situated immediately to the north of allocation H22. It is bounded on the west by the northern section of the EDR between Love Lane and Pepperall Road and on the north by the Edithmead Link Road. This site is proposed only for the high housing requirement. It is the least well-related to facilities and services and represents the most significant extension of the built-up area into the countryside. The design brief requires vehicular access only from the EDR with links across this road for pedestrians and cyclists.
  41. Proposal H30 refers to affordable housing. Based on the housing needs of the area affordable housing will be sought on specified sites, including Burnham-on-Sea and Highbridge, where development exceeds 25 dwellings or the site exceeds one hectare.
  42. The key objectives of the Transport and Movement policies include: reduction of traffic congestion and pollution, maximum accessibility by sustainable modes of travel, easy movement for pedestrians, cyclists and the mobility impaired, and the reduction of risk of accidents and improved road safety. Policy TM1 provides that safe and sustainable transport will be achieved by the listed means, including the provision by a developer of the transport infrastructure required by the development before that development is brought into use; and where off-site works are required, these shall be funded by the developer (para (d)). Para 7.12 deals with traffic congestion during the summer months and then refers to the EDR. It notes that housing developments have been required to fund the construction of this road "and the route should be complete to Stoddens Road within the next few years." Policy TM2 states that proposals for development which would prejudice the listed highway infrastructure (including the EDR (para (c)) will not be permitted.
  43. Under Shopping and Town Centre policies it is expected that new shopping will be accommodated in town centres. Where it is not possible to find suitable town centre sites, preference will be given to edge-of-town-centre sites. Where proposals are at an appropriate scale the next preference will be sites in local centres, including Rosewood Farm. Local centres are small groups of shops and limited other services serving an immediate neighbourhood. They are only appropriate for small-scale additional development. Only if no suitable sites are available in these locations will out-of-town-centre sites be considered. Policy TC1 provides that new retail development will be permitted firstly within town centres, then on edge-of-town-centre locations, followed by local centres, provided that: the proposed development is of the appropriate scale; it would help maintain and enhance the viability and vitality of the centre; and the proposal would not damage the viability of nearby town centres. Policy TC2 provides that retail development outside the preferred locations will not be acceptable unless it can be shown that no other sites within Policy TC1 are available and that certain other requirements can be met.
  44. The strategy, policies and proposals in the deposit draft local plan have been subject to a sustainability appraisal. The housing allocations were each examined and the overall conclusions confirmed that Sedgemoor used the indicators throughout the preparation of the deposit draft. These indicators helped the Council to arrive at the best solutions for each policy and proposal. For transport the conclusion is that none of the Transport and Movement polices have an adverse effect on maintaining a healthy economy or travel generation. Environmental quality is generally improved by the policies. Road schemes can transfer congested traffic from town centres to the edge on freer flowing roads.
  45. Tesco supermarket, Rosewood Farm
  46. On 13 June 1988 planning permission was refused for the construction of a Safeway supermarket (2,322 sq m net) and car park. An appeal was dismissed on 28 September 1988.
  47. On 25 September 1995 planning permissions were granted on the application of Saunders Super Fruit Limited for the erection of a neighbourhood shopping centre, associated car parking and formation of new access and for a petrol filling station and fast food outlet. The gross floor area under the former permission was 1,384 sq m with net retail floor space of 995 sq m. On 1 December 1995 planning permission was granted to Saunders for an extension to the neighbourhood shopping centre. The proposed gross floor area was 1,604 sq m with net retail space of 1,035 sq m. Condition 16 restricted the net retail area to that shown on the approved layout plan. Conversion of ancillary storage, office or circulation areas to retail use required the written consent of the local planning authority. On 4 December 1995 planning permission was granted for a petrol filling station without the fast food take-away.
  48. Early in 1996 Tesco entered into negotiations for the purchase of Saunders. On 21 May 1996 a meeting was held between representatives of Tesco, Saunders, Somerset and Sedgemoor and the problems faced by Tesco in seeking more retail floor space were set out. Tesco were seeking 1,085 sq m compared to the permitted retail area of 1,035 sq m. After June the supermarket was built and opened in December 1996. It is situated in the north-eastern corner of Rosewood Farm, bounded by Love Lane and the EDR with vehicular access from the Love Lane roundabout, the EDR and the LDR (Ben Travers Way).
  49. In October 1997 Tesco announced the purchase of Saunders. In the following November they bought 1.21 hectares of adjoining residential land from J S Bloor (Swindon) Limited.
  50. On 2 June 1998 Tesco applied for planning permission for an extension to the existing supermarket to provide additional sales and bulk storage floor space and ancillary works. The proposed additional net retail floor area was 604 sq m. The existing gross floor area was stated to be 2,044 sq m with existing retail of 1,403 sq m. The discrepancy between this latter figure and the approved retail area of 1,035 sq m was believed to be due to the use of storage areas for sales without the consent of Sedgemoor. An appeal against the non-determination of this application was made in January 1999 but withdrawn on the following 16 April.
  51. On 25 January 1999 Tesco made a planning application for extensions to the south and north elevations. On 26 February Sedgemoor wrote to Tesco's agents referring to the discrepancy in floor areas. This was reported to the Planning Committee on 9 March 1999. The Committee resolved, subject to certain outstanding consultations, to refuse planning permission and to include in the reasons for refusal reference to the absence of any demonstrable need for the extension. The application was withdrawn on 17 June 1999.
  52. In July or August 1999 Tesco submitted a representation to the deposit draft local plan supporting the definition of the neighbourhood shopping centre at Rosewood Farm as a local centre.
  53. The following events occurred after the valuation date. On 1 December 1999 Tesco applied for planning permission for an external goods storage canopy within the service yard and 82 additional car spaces as overflow parking. The total existing floor space was stated on the application to be 3,925.52 sq m with office space of 1,962.76 sq m, 1,168 sq m of retail trading space and storage of 794.76 sq m. Additional floor space under the application was 99.35 sq m of storage. This application was withdrawn on 26 April 2000.
  54. On 7 March 2001 Tesco applied for planning permission for an extension to the storage area of the food store and new canopy to improve servicing, goods handling and storage space and completion of cycleway. The total existing floor space stated on the application was 2,072 sq m with 1,367 sq m of retail trading space and 705 sq m of storage. The proposed additional floor area was 378 sq m of storage space. Sedgemoor resolved to grant planning permission subject to the prior completion of a planning agreement to ensure that the existing and proposed warehouse areas are not used for retail purposes, the removal and prohibition of any structures, containers, etc in the service yard, increased height of service yard wall, the construction of cycleway, the laying out and dedication of public open space and a comprehensive landscaping scheme, including commuted sums and the removal of the increased car parking. A planning certificate has not been issued in respect of this application. Negotiations on the planning agreement have been completed but it is not known whether it has been signed. The extension to the service yard has been completed.
  55. On 24 August 2001 planning permission was granted for the erection of an extension to the north elevation of the supermarket to enable the installation of an ATM machine. The additional retail floor space is 15.5 sq m.
  56. Purchase notice and reference
  57. Following a refusal of planning permission on 29 August 1997, the claimants served on Sedgemoor a purchase notice dated 17 December 1997 under section 137 of the Town and Country Planning Act 1990 in respect of the reference land. On 13 March 1998 Sedgemoor served a response notice. This stated that they were unwilling to comply with the purchase notice and confirmed that no other local authority or statutory undertaker was found who would be willing to comply with it. On 21 April 1998 the parties were notified of the proposal of the Secretary of State for the Environment, Transport and the Regions not to confirm the notice. The claimants requested to be heard and an inquiry was held on 27 and 28 October 1998. The purchase notice was confirmed on 22 January 1999 with the substitution of Somerset for Sedgemoor as the acquiring authority.
  58. Under section 143(1) of the 1990 Act Somerset were deemed to be authorised to acquire compulsorily the claimants' interest in the reference land and to have served notice to treat on 22 January 1999. Somerset took possession of the land on 18 August 1999. This is the agreed date of valuation.
  59. On 26 February 1999 the claimants referred their claim for compensation to this Tribunal for determination. On 14 January 2000 it was ordered that certain matters should be treated as preliminary issues and disposed of at a preliminary hearing. At the time of the preliminary hearing the claimants were seeking substantial compensation on the grounds that the reference land should be valued in a hypothetical compulsory purchase world, disregarding the decrease in value which has arisen from an indication of acquisition under section 9 of the Land Compensation Act 1961 and the scheme underlying the acquisition, which came into existence in March 1977. In the absence of the indication and the scheme the reference land would have had a premium or ransom value. Somerset's case was that the land must be valued in the real world at the date of valuation. No indication had been given of possible acquisition, or, if it had, it did not cause any depreciation in value. The scheme underlying the acquisition did not come into existence until confirmation of the purchase notice, a few months before the valuation date. Compensation is a nominal amount.
  60. Following a hearing in July 2000 I gave my decision on the preliminary issues on 25 September 2000, with a costs addendum on 19 October ("the preliminary issues decision"). My decision on the preliminary issues is as follows (paras 229 and 230):-
  61. "(1) No indication has been given within section 9 of the 1961 Act that the reference land is, or is likely, to be acquired by an authority possessing compulsory purchase powers.
    (2) There was no scheme underlying the acquisition of the reference land.
    …………..
    The purpose of this determination of preliminary issues is to establish the basis of valuation for the reference land. The value to be determined is the open market value under section 5 of the 1961 Act of the claimants' freehold interest in the reference land as at 18 August 1999 having regard to all the circumstances in the real world at that date. No adjustments are to be made to that value in respect of an indication under section 9 of the 1961 Act nor in respect of an underlying scheme."
  62. I stayed the proceedings for three months to allow the parties to negotiate a settlement based on this decision. No agreement could be reached and I issued directions for expert reports. On 18 June 2001 I heard an application by Somerset for an order that the report of Mr Jones, the claimants' expert valuation witness, be not accepted on the grounds that the expert valuation reports constitute the pleadings in this reference and that the claimants (and Mr Jones) now put forward a completely different basis of claim. The new claim was an abuse of process. By a decision dated 22 June 2001 I rejected this application but expressed my concern at this change of approach by the claimants. They could have put forward their current approach to ransom value at any time after June 1999. If I had known that this basis of claim might be put forward I would have identified the preliminary issues differently. The preliminary hearing was therefore less useful than it might have been in narrowing the issues and determining the basis of valuation.
  63. Reference land
  64. The reference land is a small plot of vacant land, about 78 metres by 18 metres, with a site area of between 0.14 and 0.16 hectare (0.35 to 0.4 acre). It is on the line of the EDR which forms the eastern boundary of Rosewood Farm and is situated about three -quarters of the way along the length of this road from Love Lane roundabout in the north to Worston Road/Pepperall Road roundabout in the south, i.e. in the southern part of this length of the EDR.
  65. The reference land is bounded on the north by a high hedge and a rhyne. To the east is open pasture land (part of H22). There is no defined southern boundary. Immediately adjacent to the reference land to the west is a high brick wall and a small area to be planted and dedicated as open space. The reference land is of poor quality, marshy with sparse grass cover. It is heavily rutted and top soil has been removed. A public footpath crosses the land. It is much used for dog walking and motorcycle practice.
  66. The claimants' interest in the reference land is the freehold with vacant possession. The claimants do not, and have not at any material time, owned an interest in any other land which is contiguous or adjacent to the reference land or which forms part of Rosewood Farm. However, the claimants acquired their freehold of the reference land through the following transactions. In March 1996 the reference land and other land was owned by Magnus Homes South West Ltd and adjoined the northern boundary of the land for which Magnus obtained planning permission on 26 March 1996. Mr Richards, one of the claimants, was formerly chairman of Magnus. On 14 February 1997 Magnus entered into a contract with Hardpart Limited, a company wholly owned by the claimants, to sell to Hardpart for a total consideration of £82,000 various plots of land including the reference land. On 27 August 1997 the claimants acquired their interest in the reference land from Hardpart.
  67. Prowting strip
  68. On 26 March 1996 Magnus Homes South West Ltd were granted planning permission for the erection of 61 dwellings and the construction of accesses on land in the south-eastern corner of Rosewood Farm. This permission was subject to a planning agreement dated 14 March 1996 between Magnus, National Westminster Bank plc, Sedgemoor and Somerset, which required Magnus to build part of the EDR, such length of completed road to become a highway maintainable at public expense, and for Somerset to pay Magnus a contribution towards the cost. Access to the application land was available to Magnus from Pepperall Road through their own development to the south. On 7 December 1995 Magnus were the owners of the application land plus an adjoining strip of land (between the application land and the former tip) which included the reference land.
  69. Under the planning agreement Magnus were required to submit for Somerset's approval plans and specification of the highway works (as defined) and Somerset were required to issue a certificate of completion of the works. The obligations as to dedication arose on the issue of this certificate. Prowting Homes South West Limited have taken over the obligations of Magnus under this agreement. The highway works have been approved and carried out. Prowting contend that the obligation as to dedication under the planning agreement does not require the dedication of a strip of land 3.5 metres wide running between the line of the EDR and the land to the east comprising housing allocations H16 and H22 in the deposit draft local plan ("the Prowting strip"). This strip extends northwards from the Pepperall Road roundabout to the reference land. Somerset dispute this contention. Under the planning agreement this dispute must be determined by arbitration.
  70. INSPECTION
  71. I have made an inspection of the reference land and adjoining land, including Rosewood Farm, Tesco, the housing allocation land, the EDR and the town centres of Burnham-on-Sea and Highbridge.
  72. PROCEDURAL DECISIONS
  73. Before I deal with the substantive issues I record my decisions on three procedural matters which arose during the hearing.
  74. The first was an application by the claimants to call additional evidence from Mr J Conder BSc Dip TP MRTPI, formerly Director of Development Services at Sedgemoor. This application was made a few days before the start of the hearing. I heard submissions on the first day. The application was for permission to adduce the evidence of Mr Conder to enable the claimants to take issue with the finding in my preliminary issues decision that Sedgemoor would have accepted development of the whole of Rosewood Farm without completion of the EDR. The application was supported by a witness statement from Mr Christopher Shaun Taylor, a partner in the claimants' solicitors, and a proof of evidence by Mr Conder.
  75. Mr Conder was employed by Sedgemoor between 1981 and 2000. He was Director of Development Services between 1991 and 2000 and throughout the period relevant to this reference Mr Barry Juniper of Sedgemoor, who gave planning evidence at the preliminary issues hearing, reported to him. Mr Conder states in his evidence that he was unaware of the nature of the evidence given by Mr Juniper until January 2002. Mr Conder left Sedgemoor in 2000 and set up in business as a planning consultant. Mr Richards met Mr Conder on 8 January 2002. Mr Conder told Mr Richards that the evidence given by Mr Juniper was not a true reflection of the planning policies of Sedgemoor in relation to Rosewood Farm. Mr Conder also held the view that Mr Betty's evidence on highway matters given at the preliminary issues hearing was contrary to the stance which had actually been adopted by Somerset throughout the relevant period. These opinions were later included by Mr Conder as his proof of evidence. The nature of Mr Conder's evidence and his unique position to assist the Tribunal, together with new evidence that was not previously available, were, said the claimants, exceptional circumstances. The evidence of Mr Conder is clearly important to a proper understanding of the issues now before the Tribunal. It would be unjust to exclude this evidence. Mr Blohm acknowledged that the particular findings of fact in my preliminary issues decision will still stand but it is open to me to make different findings now in the light of the new evidence which was not known until January 2002. The claimants considered seeking leave to appeal out of time but decided to seek permission to adduce this new evidence at this hearing.
  76. Mr Roots QC objected to the application on several grounds. First, as to timing. He said that my preliminary issues decision was given on 25 September 2000 with a costs addendum one month later. Mr Richards met Mr Conder in January 2002 but the first time that Somerset became aware of this new development was in a letter from the claimants' solicitors dated 27 March stating that an appeal out of time was being sought and that application would be made to stay the proceedings in this Tribunal. This course of action could have been taken in January 2002. If the application is granted Somerset would need to respond. An adjournment would be necessary and the hearing is unlikely to be completed within the two weeks allowed.
  77. Secondly, Mr Roots referred to the purpose of the application. It is to challenge findings of fact in the preliminary issues decision but apparently not to challenge the two conclusions in para 229 of that decision. The challenged findings of fact were, however, part of the reasoning leading to the conclusion. This opens up the whole of the decision to challenge.
  78. Thirdly, Mr Conder's proof does not contain any new facts. It is a reinterpretation of the facts known at the previous hearing. My preliminary issues decision was based on all the evidence and not only that given by Mr Juniper and Mr Betty. The claimants were represented by leading and junior counsel and the evidence was thoroughly examined.
  79. After considering the matter overnight I refused the application for the following reasons. It is to adduce late and additional evidence to show that findings of fact in my preliminary issues decision are wrong. It goes beyond an application to adduce further evidence. It is an attempt to re-open without an appeal issues already decided. The persuasive burden on the claimants is great. It seems to me that I should consider two questions. Does Mr Conder's proof reveal any new and material facts which would have led me to make different findings on the preliminary issues or which might influence my decision on the question of value now before me? Would it produce injustice to the claimants if I refuse to allow this evidence?
  80. Mr Conder's proof is lengthy, 86 paragraphs and 12 appendices. The instructions given to him were: "to review the planning evidence submitted to date by the County Council in this reference as to its validity as a true indication of Sedgemoor's position on planning policy at Rosewood Farm". I am satisfied that this evidence does not contain any new facts which I would have found material to my preliminary issues decision or which I might now find material to the question of value. Mr Conder's proof is essentially a reinterpretation of the facts which were considered at the preliminary issues hearing. It is opinion evidence. This is seen throughout the proof, but particularly in his summary where the following examples occur: "I hold the firm views that …" (para 83), "I am also of the definite opinion that …" (para 85) and "I believe that …" (para 86). Mr Conder's evidence is general and often vague. He refers to "understandings" which existed between Somerset and Sedgemoor regarding the use of compulsory purchase powers for the completion of the EDR but does not give any supporting evidence or refer to any new facts. He says that he frequently raised this issue with Somerset but again no supporting evidence is given. I would not find Mr Conder's evidence helpful: it is another opinion on essentially the same facts which differs from the opinions expressed by Mr Juniper and Mr Betty at the preliminary issues hearing.
  81. I do not think that the exclusion of Mr Conder's evidence produces any injustice to the claimants. No new and material facts emerge from Mr Conder's proof. At the preliminary issues hearing the claimants were represented by leading counsel particularly experienced in compensation assisted by junior counsel. The hearing lasted six days; the facts were thoroughly examined; Mr Juniper's and Mr Betty's evidence was fully explored in cross examination. If I allow Mr Conder to give evidence he would be a second planning expert for the claimants and the injustice would be to Somerset.
  82. I refused this application for the reasons given above but I should record that Mr Roots also objected on grounds of issue estoppel and res judicata. It has not been necessary for me to deal with these submissions and Mr Blohm's response.
  83. The second procedural issue related to the evidence of Mr Robert Alford of Prowting Homes South West Limited. Mr Jones, the expert valuation witness for the claimants, included in his report two letters from Mr Alford. The first related to a comparable land sale and there is no dispute regarding this letter. The second was a letter dated 18 January 2001 answering questions put by Mr Jones regarding the reference land and housing allocations H16, H22 and H24. Somerset served a witness summons on Mr Alford. The issue arose whether Mr Alford was to be called by Somerset and therefore could not be cross examined by Mr Roots or whether he was the claimants' witness.
  84. Mr Blohm submitted that Mr Alford was Somerset's witness due to the service on him of a witness summons. He could not be cross examined by Mr Roots. The claimants were content to rely on Mr Alford's letters as admissible hearsay; it would be a matter for me as to the weight to be given to them under the Civil Evidence Act 1995. He also referred to rule 33(2) of the Lands Tribunal Rules 1996 and rule 33.4 of the Civil Procedure Rules. Mr Roots said that the proper course was for Mr Alford to be called by the claimants and be subject to cross examination. He acknowledged that the letters are admissible hearsay. In the High Court Mr Alford would be the claimants' witness. The Lands Tribunal can direct the procedure to be used (rule 48 of the 1996 Rules).
  85. I directed that Mr Alford is to be called by the claimants and may be subject to cross examination on behalf of Somerset. Rule 48 of the 1996 Rules provides that "… the procedure at the hearing of any proceedings shall be such as the Tribunal may direct." I make my direction under this rule. Mr Alford is clearly the claimants' witness. It would wholly wrong for Mr Roots to be denied the opportunity to question his evidence in cross examination. It would be unsatisfactory to leave this evidence as admissible hearsay with submissions as to weight.
  86. The final procedural issue related to the production of a traffic impact analysis prepared by Tesco. It arose on the cross examination of Mr Betty on day 7 of the hearing. The background to this application is that the importance of Tesco to the claimants' case grew during the hearing although the supporting evidence often lagged behind. Mr Betty in cross examination was asked to produce a copy of a traffic impact analysis submitted to Sedgemoor as part of a planning application and passed to Somerset. Mr Betty was aware of this document but not the contents. It forms no part of his evidence nor did it form part of the claimants' evidence. Mr Roots objected to the request for production. I agreed that it was now too late for the claimants to seek further evidence to support their case, which had been completed at the hearing. There was ample opportunity for the preparation of their case before the hearing when this document could have been requested.
  87. ISSUES
  88. I now summarise briefly each party's case so that the issues can be formulated for detailed consideration.
  89. The parties agree that the reference land had only a minimal value for its existing agricultural use in August 1999. The claimants' case is that it had a market value of £4.8m as land which ransoms development on nearby properties, namely the housing allocation land and Tesco. The basis for this ransom value is that the grant of planning permission for these developments would be subject to a requirement that the EDR be completed across the reference land. This would necessitate the acquisition of that land at a price reflecting a share of the net anticipated profit from these developments.
  90. Mr Jones's valuation of £4.8m is based on the planning evidence given by Mr Plaw, the highways evidence given by Mr Humphreys and the evidence of Mr Alford of Prowting. It is the aggregate of the ransom values of the three areas of housing allocation land and the Tesco land. His valuation is set out in the Appendix to this decision.
  91. The basis of Mr Jones's valuation is that the reference land would have been marketed resulting in the formation of a consortium to buy the land at a price reflecting the aggregate of a proportion of the increases in value of the housing allocation land and Tesco land consequent on purchase of the reference land, thus securing access and leading to the grant of planning permissions on these parcels of land. The consortium purchase arrangements included unconditional and conditional contracts to purchase and an option in respect of the housing allocation land and a capital payment by Tesco.
  92. It is Somerset's case that a purchaser of the reference land, and those included in the assumed consortium (if it existed), would not have believed that planning permissions for the housing allocation land and Tesco were dependent on the completion of the EDR across the reference land.
  93. Mr Chivers's valuation of the reference land is £100,000, a spot figure representing the price which a land speculator would have paid in August 1999. This valuation has regard to the planning evidence of Mr Tait and the highways evidence of Mr Humphreys.
  94. From this brief review of the parties' cases the issues can be identified. The parties agree that the reference land had only a minimal value for its existing agricultural use. Both valuers, however, put the market value above that minimal value. Mr Jones's figure is £4.8m on the grounds that a requirement to complete the EDR across the reference land in order that planning permission would be granted for housing on the allocation land and for further development on the Tesco land was sufficiently certain to persuade the hypothetical purchaser, acting in consortium, to pay £4.8m for the reference land, a ransom value substantially in excess of existing use value. Mr Chivers's figure is £100,000, a much lower amount but one which is still well above existing use value. It represents the price which a speculator would have paid for the purchase of the land.
  95. Both valuers' figures reflect a ransom value (or it might be expressed as a hope value in Mr Chivers's case) but at greatly different amounts. The essential question in this reference is therefore the degree of certainty at the valuation date, as viewed by the hypothetical purchaser of the reference land, that the EDR would require completion across that land in order that planning permissions may be granted for the development of other land. Was it sufficiently certain to increase the minimal existing use value to £4.8m or was the position uncertain so that the purchaser would have been a speculator willing to pay £100,000 as a gamble, perhaps with the hope of selling on the reference land at a higher figure when the need for the completion of the EDR across the reference land as the key to the development of other land had become more certain? Allied to this fundamental question is the subsidiary question, whether it can be assumed that the consortium purchase arrangements spoken to by Mr Jones were in existence at the valuation date?
  96. The burden of proof is on the claimants. Their claim rest on two foundations, as to the certainty at the valuation date of the need for the completion of the EDR across the reference land and as to the likely existence of the assumed purchase arrangements. There are therefore three issues in this reference.
  97. The first relates to planning certainty. With what degree of certainty at the valuation date would a hypothetical purchaser of the reference land and Tesco and the owners of the housing allocation land view the need for the completion of the EDR across the reference land as a requirement for the grant of planning permission for housing development on allocations H16, H22 and H24 in the deposit draft local plan and to authorise the existing uses on the Tesco land or for further development on this land?
  98. The second issue relates to the purchase arrangements. Can it be assumed that a hypothetical purchaser of the reference land at the valuation date had entered into the consortium purchase arrangements assumed by Mr Jones?
  99. The third issue relates to value. In the light of the decisions on the above two issues what was the market value of the reference land at the valuation date?
  100. PLANNING
  101. The first and fundamental issue concerns the degree of certainty, as viewed by the hypothetical purchaser and the owners of the housing allocation land and Tesco at the valuation date, as to the planning position. This issue rests largely on the planning documents and the planning evidence given by Mr Plaw and Mr Tait and the highways evidence given by Mr Humphreys and Mr Betty.
  102. Claimants' case
    Evidence
  103. Mr Plaw said that his evidence is an assessment of the planning position at the valuation date, including the imposition of any planning condition or obligation regarding the EDR, for the development of the housing allocation land and for a major extension to Tesco. He prepared his evidence by considering the advice he would have given to a prospective purchaser.
  104. Mr Plaw said that at the valuation date it was unlikely that the housing allocations H16 and H22 would be deleted from the deposit draft local plan. A purchaser of the reference land would have been aware that only this land on the line of the EDR had not been dedicated or funded. The sections of the road to the north and south of the reference land had no purpose for access save the completion of the EDR at Rosewood Farm. Therefore, apart from the proposed housing allocations, all other land use allocations in the deposit draft local plan are too remote from Rosewood Farm to justify the retention of the EDR status on the reference land. The only explanation for the continuance of this protected status must be in connection with the proposed housing allocations and for a reduction in traffic congestion and pollution in Burnham-on-Sea and Highbridge. The situation at the valuation date was that Sedgemoor had published a draft local plan, which included housing allocations immediately adjoining the EDR. The reference land would be required for access to this allocation land. Mr Plaw referred to the sustainability appraisal and said that he would have advised a purchaser of the reference land that this appraisal would carry significant weight. It was compelling evidence supporting the prospect that the housing allocations would be included in the adopted local plan, accessed as shown and ultimately developed.
  105. Having regard to the history of the EDR, a purchaser of the reference land would have concluded that Sedgemoor or Somerset would require the completion of this road across that land in order to meet the key objectives and general aims of the deposit draft. There is a clear highway need for the completion of the EDR. A purchaser would have known that the land would have to be acquired. This is consistent with the Tribunal's preliminary issues decision that Somerset or Sedgemoor would not have become involved in such issues.
  106. When considering planning policy at the valuation date there are two key questions: had completion of the EDR across the reference land been abandoned? If not, how would it be completed?
  107. As to the first question, having regard to the history of Rosewood Farm and the Tribunal's decision that the current access arrangements were adequate but not wholly satisfactory, Mr Plaw considered 22 matters which he said confirmed that completion of the EDR between Love Lane and Pepperall Road had not been abandoned. It would have been inconceivable for Sedgemoor to protect the line of the EDR and act as it has done on an arbitrary basis. It was to ensure the completion of the EDR between Love Lane and Pepperall Road. Also, because public funds were not available, this had to be at the expense of developers.
  108. As to the second question, how the EDR would be completed, Mr Plaw would have advised that responsibility for completion (by acquisition and construction) would fall upon the developers of the housing allocation land, for reasons of planning policy, lack of public funds, the Tribunal's preliminary issues decision and because the allocations in the deposit draft presuppose the completion of the Rosewood Farm length of the EDR.
  109. The design standards for highway access are in Estate Roads in Somerset and DB 32, which both assume that all roads are capable of fulfilling a designated function. The EDR is a district distributor road linking Highbridge and Burnham-on-Sea, but could not fulfil that function at the valuation date. Mr Plaw would have advised that both Somerset and Sedgemoor would therefore ensure the completion across the reference land as a condition for the grant of planning permission on the allocation land.
  110. Mr Plaw referred to Circulars 16/91 and 1/97 and the planning agreements at Rosewood Farm and said that a purchaser of the reference land would have seen the purpose of the southern stub of the EDR as providing for additional housing because the development of Rosewood Farm would have meant that the local highway network had reached capacity in the absence of completion of the EDR.
  111. In the preliminary issues decision the Tribunal decided that the reference land was not needed for access to Rosewood Farm and therefore would not be required in planning permissions granted after the valuation date. However, provision of a second primary access for development on the housing allocation land and Tesco land would be justified under Circular 1/97 and the key objectives in the deposit draft local plan. These would be satisfied by completion of the EDR across the reference land. The roads to the east of the housing allocation land would not be suitable. It is beyond reasonable doubt that completion of the EDR across the reference land would be required for development of the housing allocation land or a major extension to Tesco and therefore planning permissions would only be granted subject to conditions or obligations requiring the completion of this road. This must be in the public interest and would not be ignored by the local authorities.
  112. At the valuation date there was an 80% chance that planning permission would be granted for a major extension (an additional 15% floor space) to Tesco, subject to a condition that completion of the EDR across the reference land be procured by the developer. At the valuation date Tesco intended to make significant alterations and still have this intention. The acquisitions of the supermarket and the adjoining land by Tesco were made in the knowledge that there would be concern by Sedgemoor regarding retail impact and by Somerset regarding traffic, but nevertheless show Tesco's expectations. The completion of the EDR was a key consideration, needed for the retention of the existing supermarket and any extension. Matters to be taken into account include the following.
  113. The Tesco supermarket will be required to serve additional housing on H16, H22 and H24. In the deposit draft local plan Tesco is classified as a local centre to serve the immediate neighbourhood; this will include a 54% increase in the number of dwellings served due to the housing allocations to the east of the EDR. A 33% increase in the retail area would be acceptable to serve the larger housing catchment area. Sedgemoor indicated in 1995 that a supermarket of more than 1,000 sq m would be unacceptable, but this was double the size indicated in the development guide. In September 1995 planning permission was granted for a supermarket of 2,100 sq m. Sedgemoor have not applied a strict prohibition on further retail development and have failed to enforce the planning conditions. They resolved to grant planning permission to regularise the increased retail floor space and to allow a substantial extension to provide ancillary accommodation, making this a more attractive retail location. This is inconsistent with any concern that there would be as to the detrimental effect on Highbridge town centre. There have been policy changes regarding the phasing of Rosewood Farm.
  114. It is probable that, due to existing or future traffic congestion or an increase in customers, Tesco will seek planning permission for additional parking, perhaps by relocation of the petrol filling station. There is no reason why such an application should be refused. It is reasonable to assume that Tesco withdrew their appeals because they had alternative proposals which they would pursue at an opportune time.
  115. Mr Plaw considered the chronology regarding the Tesco supermarket and drew the following conclusions. Before 1998 the retail floor space was increased substantially beyond that permitted by condition 16 of the planning permission. It is unlikely that Tesco breached this condition. Although a retail impact assessment was provided with planning application 11/98/065 no further assessment has been provided. Tesco are overtrading from this property. The planning permission for a petrol filling station has not been implemented but has been renewed and the opportunity was not taken by Sedgemoor to obtain agreement from Tesco not to implement this permission. At the valuation date Tesco knew that there had been a breach of planning control and that Sedgemoor could have required compliance with the planning conditions. If they had sought such compliance Tesco would have sought and would obtain a retrospective planning permission by negotiation. Tesco would have undertaken to procure the completion of the EDR and entered into negotiations with the owners of the reference land. It is a matter of valuation as to the amount Tesco would have paid for this land.
  116. The deposit draft local plan was published six weeks after the local elections and there was ample time for the new political group to amend the housing allocation if they wished to do so. By 18 September 1999 only 1,100 objections to the plan had been formally acknowledged by Sedgemoor and it was not until December that the last objection was acknowledged. These objections would not have been known to purchasers of the reference land at the valuation date: they were not public knowledge until March or May 2000. Mr Plaw expected the new local plan to be adopted within 2 to 2½ years after the valuation date.
  117. Mr Plaw referred to a planning application made on 26 November 2001 for housing development on H16. By a letter dated 25 January 2002 Sedgemoor drew attention to requirements regarding pedestrian and cycle links at the north-western corner of the site. These would have to cross the reference land. Similar advice would have been given by Sedgemoor at the valuation date. Even if vehicular access was not required over the reference land these links would need to cross that land.
  118. Mr Plaw referred to the finding in the preliminary issues decision that the current access to Rosewood Farm from the unconnected stubs of the EDR is adequate but not wholly satisfactory and his conclusion that the southern length of the EDR has no purpose other than to link the unconnected lengths of road. He concluded that it would be incomprehensible in planning terms if 25 years of planning control were to be thrown away by a failure to ensure the completion of the EDR across the reference land. This would therefore be demanded by a planning condition or obligation in respect of the development of the housing allocation land or a major extension to Tesco.
  119. Mr Humphreys said that his evidence on highway issues is based on three primary factors: the standards normally applied by Somerset for highway access in development control; any precedent indicating a relaxation of those standards; and the policies in the adopted and draft local plans regarding highways.
  120. At the valuation date the traffic loading from the completed Rosewood Farm development at the single access points at Love Lane and Burnham Road would have been equivalent to 1,452 dwellings at Love Lane and 553 dwellings at Burnham Road, with a minimum 5% increase from the local park. This position would be reached within four years of the valuation date.
  121. The function of the EDR is to act as a district distributor road linking Highbridge and Middle Burnham. It cannot fulfil that function until the missing section across the reference land is completed. Until this occurs the requirements of Estate Road in Somerset and DB 32 would normally apply when considering access to the housing allocation land and a major extension to Tesco. Over the past 20 years Somerset have never allowed development from a single access materially in excess of that indicated in Estate Roads in Somerset. In the absence of the assumed completion of the EDR the highway design standards are those which apply to a single access point. It is impossible to accept that further development will be permitted from access arrangements which are not wholly satisfactory for Rosewood Farm.
  122. The sustainability appraisal in the deposit draft local plan must have been made on the basis that the EDR would be completed. Any development on the housing allocation land or Tesco land without a second access would be contrary to DB 32 and the key objectives in the deposit draft local plan. Development would be limited to the equivalent of 200 dwellings off a collector road as a cul-de-sac not more than 200m long. Somerset and Sedgemoor would not abandon the completion of the EDR nor allow permanent serious overloading of a single access contrary to Estate Roads in Somerset.
  123. The additional traffic generated by the housing allocation land and Tesco would be as follows: equivalent to 300 dwellings on to Love Lane from H24; 250 dwellings on to Burnham Road from H22 plus school traffic (equivalent to 200 dwellings); 120 dwellings on to Burnham Road from H16; and 794 dwellings from Tesco if the size of the store is doubled. This gives totals of equivalent to 2,619 dwellings on to Love Lane and 1,113 dwellings on to Pepperall Road.
  124. A second primary access would be required before any development of the housing allocation land or Tesco land would be permitted. The existing roads to the south and east (including Pepperall Road) and west are unsuitable for additional development. The advice to a purchaser of the reference land would be that neither of the single access points at Love Lane or Burnham Road would be suitable to serve development on the housing allocation land or Tesco. The ultimate level of traffic loading at these points from Rosewood Farm and the area to the south would be such that no responsible highway authority would allow any increased loading on a permanent basis.
  125. The completion of the EDR across the reference land would, due to lack of public funds, fall entirely upon the developers of the housing allocation land. Owing to holiday traffic in the summer months on the Edithmead Link Road (B3140) there would be conflict with Rosewood Farm traffic, leading the latter to use the Ashcott Drive access rather than queue to leave the site at Love Lane. There are no highway reasons that necessitate or justify realigning the EDR to the east or west of the reference land, although such alternative routes might be possible at excessive additional cost.
  126. Mr Betty's evidence that the housing allocation land could be developed with access from the unconnected stubs of the EDR is not credible. It is contrary to the preliminary issues decision, contradictory in itself and with the local plans, factually inaccurate and unsubstantiated. Mr Humphreys listed 13 matters ignored by Mr Betty.
  127. The completion of the EDR across the reference land would ensure that the access to Rosewood Farm is satisfactory, Proposal BH/T4 in the adopted local plan satisfied, the key objectives regarding transport in the deposit draft local plan could be fulfilled, roads would comply with Estate Roads in Somerset, and there would be satisfactory access to Tesco and the housing allocation land. Any alternative permanent access solutions should provide equivalent benefits but this cannot be achieved by access from the existing incomplete EDR.
  128. Mr Betty has accepted that any major expansion of Tesco would be unacceptable without the completion of the EDR. The report by Boreham Associates of January 1999, in connection with Tesco's planning application, assumed the completion of the EDR and both Somerset and Sedgemoor fully intended that they would ensure that the EDR is completed across the reference land. There should also be similar concerns regarding development on H22 and H24 with access from the northern stub of the EDR. Mr Betty's approach to Tesco and H22 and H24 development is inconsistent. There is a similar contradiction regarding the access to development on H16 and H22 from the southern stub of the EDR.
  129. Mr Betty's intimation that the EDR has a secondary role is inconsistent with the planning history of this road since 1977. His support for the absence of a requirement to complete the EDR for H22 and H24, based on a letter from W S Atkins dated 16 March 1999, shows a misunderstanding of this letter and is contrary to para 4.49 of the deposit draft local plan.
  130. With regard to H16, the only certainty at the valuation date for a purchaser of the reference land was that the access arrangements were those contained in the deposit draft local plan which pre-supposed the completion of the EDR on its planned route. A purchaser would have decided that, in order to obtain planning permission, probably with access from the EDR, then the EDR would have to be completed. Any alternative solution involving the highway network to the south or east would be an unknown quantity.
  131. With regard to H22, it is unlikely that a purchaser of the reference land would have assumed from the deposit draft local plan and design brief that the sole access to H22 would have been from Worston Road. Any development of H22 would require alternative access from the EDR because Worston Road would have reached capacity from the development of H16. The comprehensive development of H16 and H22 would require completion of the EDR. There are ownership and other issues connected with access from the EDR to the north which Mr Betty has not considered. A purchaser of the reference land would not consider this to be viable or certain of approval. Similarly, access from the southern stub of the EDR has many drawbacks and would not be a viable proposal to a purchaser of the reference land. In reality development of H22 from the northern stub of the EDR, or indeed the southern stub, could be best achieved by access from the reference land itself.
  132. With regard to H24, Mr Humphries agreed with Mr Betty that access would be from the EDR at a suitable location but would require the completion of this road. For the whole of the housing allocation land Sedgemoor would have refused planning permission for development at the valuation date, with an incomplete EDR, on grounds of inadequate access. Completion of the EDR remains a top priority for Sedgemoor. Contributions for the completion of the road would be required as a condition of planning permission for Rosewood Farm, but if the grant of permission for the remaining areas did not now require the acquisition of the reference land for Rosewood Farm development, then a purchaser of the reference land at the valuation date would have concluded that (in the absence of acquisition by Somerset) purchase of the reference land would be required for access to the housing allocation land and for a major extension to Tesco. Otherwise there would have been no point in protecting the route of the EDR and the contributions could not be applied to their lawful purpose.
  133. Mr Humphreys considered the history of the Prowting strip and said that a purchaser of the reference land at the valuation date would have established ownerships including this land. He might have discovered a dispute in relation to land to the north of the reference land and assumed a similar dispute could arise to the south. The dispute regarding the Prowting strip did not occur until after the valuation date. The outcome therefore has no relevance to the circumstances at that date. There would have been no reason to assume that Prowting did not own the strip abutting H16 and H22 or that they would dedicate in excess of the land required for the EDR. A purchaser of the reference land would not risk making any assumptions involving by-passing the reference land based on the uncertain outcome regarding these disputes.
  134. Mr Humphreys was cross-examined on a matter which frequently occurs in the claimants' case, namely that Somerset have abandoned completion of the EDR. He said that Sedgemoor required completion of the EDR and not Somerset and therefore it can be inferred that Somerset have now abandoned the completion of this road.
  135. Mr Humphreys concluded that no alternative route for the EDR, other than across the reference land, was feasible and it should be assumed for valuation purposes that this land holds the key to development of the housing allocation land and Tesco. Access to the housing allocation land and Tesco would require the acquisition of the reference land and the completion of the EDR. This is the only route certain of planning approval at the valuation date. Having regard to the deposit draft local plan no prospective purchaser would view access in any other way.
  136. The evidence of Mr Jones is mainly concerned with valuation and will be considered under the second and third issues. He has, however, set out his conclusions on planning and highways which form the basis of his valuation. These should be summarised in this part of the decision.
  137. Mr Jones said that he must consider how, seen through the eyes of a purchaser of the reference land, the EDR would be completed, in the knowledge that the claimants were unwilling to dedicate this land to Somerset. This would require the acquisition of the reference land prior to construction of the road. The logical conclusion is that a developer would have to complete this section of road by acquisition and construction or dedication with completion by Somerset using contributions from developers. A purchaser would identify the potential advantages of the reference land as access to the housing allocation land. Other development would be too remote to merit retention of the line of the EDR across the reference land. A purchaser would have based his valuation decisions on the proposals in the deposit draft local plan, noting the link between the completion of the EDR and the policies and key objectives.
  138. If told by Somerset or Sedgemoor that access to the housing allocation land via the unconnected EDR was acceptable and that there was no reason to refuse planning permission on access grounds, no purchaser of the reference land would make a voluntary contribution for the completion of this road. That is not, however, the position. Somerset and Sedgemoor have indicated that they would demand contributions for the completion of the EDR across the reference land and that planning permission would be conditional upon those contributions. Sedgemoor would have advised a purchaser of the reference land that completion of the EDR was required for any further development because its completion remained an existing and emerging local plan policy.
  139. The value of the reference land depends on three key issues: the type of purchaser; whether access to the housing allocation land was dependent upon completion of the EDR across the reference land; and the degree of certainty (as seen by a purchaser) that the housing allocation land will be included in the future adopted local plan.
  140. On the question of access, Mr Jones considered the status of the EDR at the valuation date and concluded that the line was fixed for all practical purposes. Having regard to the preliminary issues decision, that the access to Rosewood Farm was adequate but not satisfactory, a purchaser of the reference land would have concluded that planning permission for development on the housing allocation land would be dependent upon completion of the EDR. The access must be permanent and in accordance with the standards of the highway authority. There must be a second primary access. Having regard to the evidence of Mr Humpreys, the reference land must be acquired for the EDR to be certain of approval of the access for development on the housing allocation land. There is no alternative route.
  141. As to Tesco, Mr Jones concluded that there was a 100% chance (as seen by Tesco) that they would receive planning permission for a major extension to their store, having regard to the increased role it would be required to play in serving the housing allocation land and other proposed development in Burnham-on-Sea and Highbridge. Tesco would have been aware from advice (including advice from Somerset and Sedgemoor) that the EDR would need to be completed across the reference land to regularise the existing breach of planning control and for planning permission to be obtained for further extension.
  142. Mr Jones prepared his valuation as if the reference land were the sole access to the housing allocation land and to any further extension of Tesco. The valuation is of the prospect of completing the EDR over the reference land as opposed to possible alternative solutions in the context of the housing allocation land and an extension to Tesco.
  143. Submissions
  144. Mr Blohm said that the sale of the reference land is assumed to have taken place in a hypothetical world where the purchase notice has not been served. This hypothesis has four consequences. First, the background facts are those set out in the preliminary issues decision, insofar as they apply to a world in which no purchase notice procedure has commenced. Second, there can be no evidence of certain facts consequential on the hypothesis. Third, events which occur after the service of the purchase notice must be carefully scrutinised to see whether they remain consistent had the notice not been served. Documents in the real world may not be consistent with the hypothetical world. Fourth, the Tribunal must rely on inference and opinion to assess what would have happened if the purchase notice had not been served.
  145. As to post-valuation date facts, Mr Blohm said that generally he accepted the submission of Mr Roots that they are not automatically irrelevant but that caution must be exercised in attaching any significant weight to information which would not have been available to the purchaser of the reference land. Hindsight must not be used to decide how risks at the valuation date turned out.
  146. It is agreed that the reference land had only a minimal agricultural value. It is also agreed that the basis of valuation is ransom value. The important factor is the perception of the ransomed party as to the extent to which a ransom is effective. A perception of risk (not actual risk, although this may be the same) lies behind this value. It is risk in the hypothetical world not in the real world. Ransom value is dependent upon a number of contingencies. As to the housing allocation land: the perceived likelihood that the proposed allocations will be confirmed in the adopted plan; the likelihood of planning permission and that the grant of permission will be dependent upon a requirement that the EDR be completed across the reference land. As to Tesco: the perceived likelihood that they will be allowed to carry out a major extension and to regularise the breaches of planning control; and the perceived likelihood that Tesco would be required to complete the EDR. The possible diversion of the EDR around the reference land is also a contingency. There is no evidence to suggest that there would be difficulties in obtaining planning permission if the allocations are included in the adopted plan. The fact that planning permission is dependent upon completion of the EDR may be shown by the imposition of a Grampian condition or refusal of planning permission if the EDR has not been completed. The intentions of Sedgemoor must be looked at in the hypothetical world. An opinion must be formed as to whether those intentions are enforceable.
  147. Mr Blohm referred to the history and two-fold purpose of the EDR. Circular 1/97 provides that a planning obligation must be required for a planning purpose. One of the planning purposes in this case is the completion of the EDR for the relief of traffic congestion. This is still the policy of Sedgemoor. The objection to the imposition of a planning obligation to complete the EDR, on the grounds that it would be required to deal with an existing situation, is a red herring. Contributions have justifiably been sought by Sedgemoor for the completion of the road. The position at the valuation date was that prices of development land were buoyant; all land on the line of the EDR (other than the reference land) was either dedicated or subject to dedication agreements and either had part of the EDR on it or Somerset held the necessary funds to construct it. The effect of allowing significant additional development on the housing allocation land would be to worsen the highway situation which was already unsatisfactory. The completion of the EDR across the reference land would be a planning gain within Circular 1/97. Developers must pay for ameliorating works, namely the completion of the EDR.
  148. There are two problems regarding the development of the H16 land without completion of the EDR: the unsatisfactory access from Worston Road and the need to route the outgoing cycleway across the reference land. Access to the H22 land must be from the EDR where it crosses the reference land. Access from the north would involve a ransom situation with Mr Dodgson. Access to the EDR from the south would involve crossing the Prowting strip, another ransom situation. There is no evidence that development on H22 land can be served from H16.
  149. The evidence shows that Tesco wish to carry out a major extension to their supermarket at Rosewood Farm. It is common ground that planning permission would not be granted for this development while the EDR remains incomplete. Mr Betty acknowledged that planning permission for an extension would be refused without a Grampian condition regarding the completion of this road.
  150. At the valuation date Somerset assumed that the EDR would be available for construction when the housing development on H16, H22 and H24 came to fruition. Somerset remain intent on its construction but it will only be completed by a developer. Tesco would require completion to allow a major extension. The developer of H16 as a physical ransom (cycleway requirements in the design brief), as sensible links to the road network and for completion of the EDR. The developer of H22 and H24 as sensible links to the road network and for completion of the EDR.
  151. Somerset's policies require the EDR to be a district distributor road, a through route, which it is not. As it is not a district distributor road then it must follow that it is functioning as a local distributor road and its capacity is subject to Estate Roads in Somerset and DB 32. Somerset say that the incomplete EDR is not subject to these standards because it is intended to be completed and become a district distributor road. The only inference which can be drawn is that it will be completed as a result of development on H16, H22 or H24 and Tesco.
  152. Somerset's case
    Evidence
  153. Mr Tait said that in the adopted local plan the H16 land is within the development boundary of Burnham-on-Sea and therefore suitable in principle for redevelopment. Planning permission would be granted for development consistent with the structure plan and adopted local plan. H22 and H24 land is outside the development boundary and Policy BH/SP2 creates a presumption against development. Planning permission would be refused. The neighbourhood shopping centre under Policy PH/S2 had been built at the valuation date.
  154. Mr Tait referred to the history of the deposit draft local plan and said that the officers did not support allocations H22 and H24 because they would breach the EDR which had become established as a defensible boundary to the expansion of Burnham-on-Sea to the east. This objection also applied to a lesser extent to H16. Following publication of the deposit draft local plan in June 1999 comments were invited by the following 2 August. Before publication elections for Sedgemoor District Council were held on 6 May and the housing allocations were an issue. There was a change of political control following the elections: the new Conservative controlled council inherited a draft local plan containing a development strategy it did not support. The single most contentious issue in the deposit draft local plan was housing allocations H22 and H24: 266 objections were made to the former and 240 to the latter. At the valuation date the position regarding the housing allocations was not straightforward. There were two development options and two possible levels of growth. There was a difference between members and officers. There had just been a change of political control. All objections to the deposit draft had been received and a broad indication of the nature and weight of those objections was known. The greenfield sites would need to be discussed at the public inquiry into the plan. No planning applications had been received for the housing allocation land and no discussions with developers can be recalled.
  155. It was highly probable on the valuation date that allocation H16 would be in the adopted local plan. A planning application on that date would have been unlikely to be refused as premature even though the development guidelines stated that H16 should preferably be developed comprehensively with H22. The H22 allocation was subject to significant strategic objections. An alternative development strategy was the allocation of housing sites to the north of Stoddens Road and this was favoured by the Conservative group which gained control of the council at the preceding May elections. There were many objections to the H22 allocation including two developers, one of which was Prowting. The town and parish councils also objected. Council officers had reservations regarding this allocation. This is not a partial brownfield site. The prospects for the retention of this housing allocation in the adopted local plan were uncertain. The objections to H22 applied with more force to H24. This was only identified under the high growth option in the structure plan. This site has the greatest landscape impact. There was considerable doubt as to whether this allocation would survive into the adopted plan. Mr Plaw's view that it was unlikely that the H16 and H22 allocations would be deleted from the approved local plan is mistaken for two reasons. First, Sedgemoor adopted the two-stage development process in the Town and Country Planning (Development Plans) (England) Regulations 1999 (although not in force until 4 January 2000) and the publication of the deposit draft was the first opportunity for public comment on site-specific proposals. Major amendments were likely. Second, Sedgemoor took the unusual step of setting out an alternative development strategy involving a large site to the north of Burnham-on-Sea (see paras 4.49 and 4.50 of the deposit draft local plan). This alternative site enjoyed substantial political and public support compared to the objections to H22 and H24. At the valuation date the alternative strategy was very much a live issue.
  156. Any planning application for development on H22 or H24 land in August 1999 would have been refused on grounds of prematurity. Although the emerging local plan was a material consideration, the grant of planning permission for these allocations would have been prejudicial to the local plan process by pre-empting decisions regarding these allocations. This would have remained the position for a considerable time after August 1999. Until the inspector's recommendations following the public inquiry it would have been premature to grant planning permission for development on H22 or H24.
  157. Mr Tait referred to the history of Tesco. He said the he cannot understand the claimants' contention that Sedgemoor have approved a supermarket of 2,100 sq m. He strongly disagreed that it is inevitable that Tesco will eventually prevail with its plan for a major extension.
  158. Although objections were received to the detailed wording of Policy TC1 in the deposit draft local plan, the underlying principles have not been challenged. Tesco submitted a supporting representation to the classification of the identified site as a local centre. The deposit draft identified Highbridge livestock market for a mixed use development including retail (Policy TC10 and paras 6.31 - 6.40). As a town centre site this would have had first preference in the sequential test for additional retail space. There were clear policy objections to a new supermarket at Rosewood Farm (see PPG6 and the alternative town centre sites at Highbridge, to the west of the railway station and on the cattle market, and at Burnham-on-Sea on the Oxford Street east car park). Given the weak nature of Highbridge town centre in particular, any significant expansion of the Rosewood Farm local centre would be likely to have a detrimental effect on both town centres. With regard to an extension to Tesco, the policies in the adopted local plan (Proposal BH/S2) and draft deposit local plan (Policy TC1 and paras 6.15 and 6.47) clearly indicate that only small-scale development will be permitted to serve the immediate neighbourhood. The implication of the withdrawal of Tesco's planning appeals is that they were not confident that permission for an extension would be granted. The prospects for the grant of planning permission for an extension were negligible. Although Sedgemoor requested payment of a contribution towards completion of the EDR if planning permission is granted for an extension and a contribution was offered by Tesco, a request for a contribution does not accord with longstanding planning policies to keep the supermarket as a neighbourhood centre where most access would not be by car. Enforcement action against Tesco for breach of condition 16 was an option but has not been pursued by Sedgemoor. Such action is not inevitable: Sedgemoor would try to resolve the position by negotiation. A line might be drawn under the breach to ensure that no further extensions take place and that Tesco remains a neighbourhood store.
  159. Only minimal changes were made to Policy TC1 when the revised deposit draft was published on 30 October 2000. Planning permission has now been granted for a Lidl Supermarket on the Oxford Street site in Burnham-on-Sea. The cattle market at Highbridge remains allocated for mixed use. The site to the west of Highbridge railway station is now being developed for housing.
  160. There is nothing in the deposit draft local plan to indicate that the development of Tesco and housing allocations H16, H22 or H24 would not be allowed unless the EDR is completed across the reference land. The continued protection of the line of EDR in the deposit draft local plan had nothing to do with allocations H16, H22 and H24 nor with an extension to Tesco. It was intended to allow for the completion of the road at some future date. The conclusions in the sustainability appraisal were challenged by much professional opinion. They may not carry significant weight or represent compelling evidence that the housing allocations would be carried forward into the adopted local plan.
  161. Mr Betty said that the claimants' case, that development of the housing allocation land could not have been permitted until completion of the EDR, due to traffic loadings in excess of Estate Roads in Somerset, is incorrect for two reasons. First, the EDR is a district distributor road and the guidance in Estate Roads in Somerset does not apply. Pepperall Road is part of the EDR. Second, since Worston Road connects to existing highways at both ends, the reference to a single access point is wrong in relation to access to H16. Although the EDR could not fully function as a district distributor road at the valuation date, planning permissions had nevertheless been granted on the basis that the completion of the EDR was always intended and therefore Estate Roads in Somerset did not apply. Sedgemoor have adopted this document as part of its policy.
  162. Somerset would not have insisted on the completion of the EDR as a pre-requisite to the development of H16. A development of at least 120 dwellings could have been satisfactorily accessed from Worston Road, which is connected to Pepperall Road in the west and the A38 in the east (see Appendix 4.1 of the deposit draft local plan).
  163. With regard to H22, this land could not have been accessed solely from Worston Road (in a development in conjunction with H16) and the suggestion to this effect in Appendix 4.1 seems to be mistaken. It follows that access would have to be from the EDR along the frontage to the H22 land. This could be from the northern stub. This is preferred. Alternatively, if developed in conjunction with H16, access to the EDR could be anywhere along the H16 frontage to this road. A junction with the EDR would not be the sole access: there could be a secondary access from Worston Road. This would have been necessary if the H16 and H22 allocations were developed together. Such a requirement would not have arisen from any perceived overloading of the EDR in terms of Estate Roads in Somerset. Somerset's position with regard to H22 has been consistent. Mr Betty is aware of the cycle way provision but it has not been identified as necessarily crossing the reference land.
  164. With regard to H24, Mr Betty would expect to see a condition attached to any grant of planning permission requiring vehicular access only from the EDR. A satisfactory junction could be formed anywhere along the built length of the EDR which is the western boundary of H24.
  165. It would be unfair to require the developers of the allocation land to contribute to the completion of the EDR which was intended to have been completed in conjunction with the Rosewood Farm development.
  166. A major extension to Tesco would generate more traffic. Somerset would object to the grant of planning permission for an extension unless the EDR had been completed between Love Lane and Pepperall Road. This would not necessarily have to cross the reference land. This decision would not be based solely on traffic loadings at these two points but on the capacity of the road network generally, including Love Lane roundabout. Tesco would not be asked to contribute towards the cost of the EDR, although Sedgemoor were entitled to ask for such a contribution.
  167. The position of Somerset regarding the Prowting strip is that Prowting were, and still are, required to dedicate it for highway purposes under the planning agreement dated 14 March 1996. The ability of this strip operate as an obstacle to access to H16 and H22 land is a matter of dispute to be resolved by arbitration under the planning agreement.
  168. The protection of the route of the EDR reflects the continuing expectation of Somerset and Sedgemoor that the road will eventually be completed between Love Lane and Pepperall Road. There is no basis for Mr Jones's assertion that Somerset has discounted the need to complete the EDR across the reference land for the relief of traffic congestion to the south. While the EDR remains incomplete traffic problems will remain. The EDR still has a limited role as a town centre relief road. These problems will be exacerbated by development on H16 and H22. The unconnected stubs of the EDR should not be automatically ruled out as means of access to H16, H22 or H24 by reason of conflict with Estate Roads in Somerset, which has no application to the EDR. Although the completion of the EDR would produce positive results, Somerset would not have advised Sedgemoor to refuse planning permission at the valuation date for development on the allocation land unless completion of the EDR over its entire length had been secured. There has been no resolution by Somerset to abandon the dual aims of the EDR set out in Proposal BH/T4 in the adopted local plan. Mr Betty anticipated the completion of the EDR by a developer. Completion of the EDR on the protected line across the reference land is not the only feasible option. Realignment to east or west was physically possible.
  169. The evidence of Mr Chivers is almost wholly concerned with valuation and will be considered under the second and third issues. I need only mention two matter regarding planning and highways. First, it is Mr Chivers's view that the combined evidence of Mr Tait and Mr Betty shows that value enhancement carried a varying degree of uncertainty from high probability on H16 to negligible on Tesco, and that even if the housing allocations were implemented, they could be developed in highway terms without the reference land. There are therefore no grounds for attributing significant value to this land. The second matter is that there are two contingencies regarding the value of the reference land: whether planning permissions will be granted on other land and whether the construction of the EDR on the reference land will be a requirement of such permissions. Mr Chivers doubted whether there would be enthusiasm in the market for land subject to these two contingencies, if one of which is not satisfied the land will realise no significant value.
  170. Submissions
  171. Mr Roots said that the preliminary issues decision refers to value in the real world. This is in contrast to the hypothetical world advanced by the claimants and dismissed by the Tribunal. However, we cannot entirely dispense with hypothesis. Mr Roots referred to section 5 rules (1) and (2) of the Land Compensation Act 1961 and said that, in order to apply these rules sensibly, it is necessary to disregard the fact that a purchase notice has been confirmed, although there is no reason to ignore the fact that the notice was served (if this has any relevance), that was a voluntary act. The purchase notice cannot be disregarded entirely because, following confirmation, it may have influenced real world events and documents. That is not to say that documents, such as the text of the deposit draft local plan, were so influenced but one must be alert to this possibility.
  172. Facts occurring after the valuation date are not automatically irrelevant but great caution needs to be used in attaching significant weight to information which would not have been available to a purchaser of the reference land at that date. It is well settled that facts about the subject matter of a valuation as at the date of valuation may be taken into account if those facts became known at some later date (see Bwllfa and Merthyr Dare Steam Collieries (1891) Limited v Pontypridd Waterworks Co [1903] AC 426 and Waterworth v Bolton Metropolitan Borough Council (1978) 37 P & CR 104). In the present case post-valuation date events have been referred to in two contexts. First, to show what happened to the deposits draft local plan. This was done by Somerset solely by way of illustration as to what can happen to any local plan. It is not contended that a purchaser of the reference land knew what happened to the plan after the valuation date. Second, the claimants have referred to later events in relation to Tesco, in particular to establish Tesco's intentions regarding expansion. Here, greater care is needed because we are not valuing Tesco but trying to assess what a purchaser of the reference land at the valuation date would have thought about the likelihood of Tesco requiring that land to complete the EDR.
  173. A crucial question is whether and when planning permission would have been expected at the valuation date in respect of the housing allocation land and Tesco. This is partly dependent on the prospects of planning permission which might be seen in the emerging local plan. A measure of agreement has been reached as to the likelihood of the allocations being carried forward into the adopted local plan. But it is necessary to look behind the percentages agreed, not to question them but to understand them. The deposit draft local plan has emerged as a gradual process since 1995. There were many objections in a context of uncertain political will.
  174. As to the prospects of obtaining planning permission the evidence shows the following situations. With regard to H16 there would be no prematurity objection but the process of obtaining permission would not be straightforward. The development of H16 and H22 together would be logical but this can only be achieved once the allocation of H22 has been confirmed. There may be a host of detailed development control issues to be sorted out before planning permission could be granted. H22 is a controversial allocation and planning permission could not be expected until the plan has been adopted (see PPG1 paras 47-49). H24 is a controversial allocation and prematurity would again arise. Detailed development control issues would also arise in respect of H22 and H24, including affordable housing and the school site.
  175. The claimants' case regarding Tesco changed during the hearing. Mr Roots referred to the facts regarding the breach of planning control and an extension and said that it is necessary to consider how a purchaser of the reference land at the valuation date would have viewed the prospects of obtaining planning permissions to remedy the breach and for a major extension. There was no basis on which a purchaser of the reference land could have reached a definitive view as to how, if at all, the breach of planning control would be resolved. As to an extension, the purchase of adjoining land and other actions by Tesco could not be interpreted as demonstrating an intention to press vigorously for a significant extension. Mr Roots referred to the retail policies in the local plans and PPG6 and said that the only tenable conclusion is that at the valuation date a planning application would have been vigorously opposed by Sedgemoor.
  176. It is fundamental to the claimants' valuation approach that a purchaser of the reference land (and the others involved in the complex imaginary transactions assumed by Mr Jones) would have believed that planning permission for the housing allocation land and Tesco would with certainty require the completion of the EDR. This is fallacious on grounds of highway design and planning policy.
  177. Mr Betty's evidence showed that access which conformed with appropriate highway criteria could be provided to each of the housing allocations without completion of the EDR. On the other hand the evidence of Mr Humpreys was based on Estate Roads in Somerset and DB 32, although he accepted that they do not apply to district distributor roads. Although the EDR is incomplete there is no evidence to suggest that the road was not functioning adequately as a district distributor road. Mr Humphreys seemed to think that Mr Betty ought to approach the matter on the basis that completion of the EDR had been abandoned. There is no justification for this view which may be a misunderstanding of the preliminary issues decision. Completion of the EDR would not have been required for the grant of planning permission to remedy the breach of planning control but would have been required for a major extension. Planning policy, however, would have been against the grant of permission for such an extension and it does not follow that Tesco would have felt themselves obliged to complete the EDR.
  178. As to planning policy, Mr Roots reviewed the history of Rosewood Farm and the EDR and said that Somerset and Sedgemoor found that they had unwittingly failed to secure the underlying objective of completing the EDR in conjunction with Rosewood Farm. An important theme of the claimants' case is that the only explanation for the fact that the EDR appears in the deposit draft local plan is that completion is required in connection with the new housing allocations. This argument rests on shaky foundations including a misreading of parts of the preliminary issues decision. There is no intention to abandon completion of the EDR and no finding by the Tribunal as to who might acquire the reference land. There is no reason in law why Somerset or Sedgemoor might not be one of the bidders for the land to resolve the deficiency in the highway network. There is no evidence that either council have decided that the new allocations should have to take on the burden of completing the EDR. If this were the case it would be expected that some caveat to this effect would appear in the deposit draft local plan, notwithstanding that the text was completed after confirmation of the purchase notice.
  179. Mr Roots referred to Circular 1/97 para B12 which states that developers should not be expected to pay for existing deficiencies. Any attempt to require developers of the housing allocation land or Tesco to arrange for completion of the EDR would be met with this policy statement and the fact that Somerset hold funds (albeit insufficient) to build the remaining length of the EDR. Para B12 of Circular 1/97 allows for obligations where an existing constraint is materially exacerbated by new development but it could be argued that the incomplete EDR is not an existing constraint because, if Somerset and/or Sedgemoor had arranged matters to achieve the policy intention, there would be no such constraint. In particular, Somerset or Sedgemoor might ask for contributions towards completion of the EDR and a developer might think that a contribution would smooth his path and therefore offer such a contribution. These would, however, be small sums. It is inconceivable that the large amounts in Mr Jones's valuation would be paid.
  180. In these circumstances it would be impossible for a purchaser of the reference land to conclude that there was any degree of certainty that the developers of the allocation land or Tesco would feel under any pressure to buy the reference land in order to complete the EDR. The deposit draft local plan does not require the completion of the EDR in connection with the housing allocation land.
  181. Decision
  182. The first issue relates to certainty of planning. With what degree of certainty at the valuation date would the hypothetical purchaser of the reference land and Tesco and the owners of the housing allocation land have viewed the need for completion of the EDR across the reference land as a requirement for the grant of planning permission for housing development on allocations H16, H22 and H24 in the deposit draft local plan and to authorise the existing uses on the Tesco land or for further development on this land?
  183. The nature and purpose of this decision are important. This is not a planning appeal. I am not concerned with whether planning permission should or would have been granted for the housing allocation land or Tesco nor whether the unconnected stubs of the EDR provided adequate access to this land (having regard to Estate Roads in Somerset and DB 32) nor how, in the absence of acquisition by Somerset, the EDR would be completed. I am concerned with value. I am concerned with whether a purchaser of the reference land at the valuation date (and all those participating in the purchase arrangements assumed by Mr Jones) would have concluded that there was a high degree of certainty that planning permission would be granted for development on the housing allocation land and Tesco land if the EDR were completed across the reference land, so that the completion of the EDR unlocks the development value of the housing allocation land and Tesco land. If planning permission might have been refused for other reasons (eg retail policy or prematurity) or granted without a requirement to complete the EDR across the reference land (eg adequate existing or other access), then the need to acquire the reference land was absent or greatly reduced, with consequent effects on value. The essential question is whether the prospect of a requirement for the completion of the EDR across the reference land was certain enough to persuade the purchaser to risk several million pounds in purchasing the land and the owners of the allocation land and Tesco selling or granting options or making a payment in respect of their lands. The burden of proof is on the claimants. In Porter v Secretary of State for Transport [1996] 3 All ER 693, Stuart-Smith LJ said (704d):-
  184. "Where a court or tribunal has to decide what would have happened in a hypothetical situation which does not exist, it usually has to approach the matter on the basis of assessing what were the chances or prospect of it happening. The chance may be almost a certainty at one end to a mere speculative hope at the other. The value will depend on how good this chance is."
  185. The purpose of my preliminary issues decision was to establish the basis of valuation for the reference land. I concluded that it was to be determined as at 18 August 1999 having regard to all the circumstances in the real world at that date. No adjustments are to be made in respect of an indication under section 9 of the Land Compensation Act 1961 nor in respect of an underlying scheme. The reference to the real world was to distinguish it from the hypothetical no indication no scheme world proposed by the claimants at that time to support their claim for ransom value. The valuation world is however still, to some extent, a hypothetical world due to the existence of the purchase notice. Mr Blohm submitted that it is to be assumed that the purchase notice has not been served. Mr Roots said that confirmation of the purchase notice must be disregarded but not service because this was a voluntary act. It is common ground therefore that confirmation of the purchase notice is to be disregarded but perhaps not the service. I base my decision on this common ground, that confirmation of the notice and any consequences directly flowing therefrom are to be disregarded. I make no decision as to whether the service of the notice is also to be disregarded. This hypothetical world must be kept as near as possible to the real world. No assumptions should be made unless provided for by statute or decided cases or supported by the evidence (see Trocette Property Co Ltd v Greater London Council (1974) 28 P & CR 408, 420 and Margate Corporation v Devotwill Investments Limited [1970] 3 All ER 864, 869-70).
  186. There is also common ground concerning the relevance of facts and events occurring after the valuation date. Mr Blohm accepted that post-valuation date facts and events are not automatically irrelevant but that caution must be exercised in attaching any weight to information which was not available to the purchaser of the reference land at the valuation date. This is the approach of Mr Roots but he also said that it is settled law that facts about the subject matter of the valuation as at the valuation date may be taken into account even if they become known at a later date. If there is an issue on this matter it is not necessary for me to decide it. I base my decision on the common ground between the parties, namely that the position known to the hypothetical purchaser of the reference land at the valuation date is to be taken into account when preparing a valuation of that land. I will confine my decision to the facts known at the valuation date. If I had gone further and considered facts and events occurring after that date my decision would have been the same but reinforced by additional reasons, eg. the subsequent deletion of housing allocations H22 and H24 from the emerging local plan.
  187. A purchaser at the valuation date would have had available to him the statutory development plans, the structure plan review and the draft deposit local plan in the form in which it was published on 21 June 1999. He would have known of the change of political control of Sedgemoor in May 1999 and the possible impact on the emerging local plan. It can be assumed that he would have had discussions with officers of Somerset and Sedgemoor and would have become aware of the objections to the proposed housing allocations and the views of the officers in relation thereto. In short, he would have become aware of the position of Somerset and Sedgemoor as set out in the evidence of Mr Tait and Mr Betty but would have formed his own views on the position. The hypothetical purchaser would not, however, have had the text of the preliminary issues decision. In the hypothetical world of this purchase this decision as a document does not exist. Although the preliminary decision deciding the basis of valuation governs this current determination and the findings of facts in that decision apply, the hypothetical purchaser would not have had the decision as such. He would not therefore have been able to subject it to the close textual analysis undertaken by the claimants in order to draw inferences attributable to the purchaser, most, if not all of which in my view, are wider than justified by the words of the decision.
  188. I turn now to the position known to the hypothetical purchaser at the valuation date, looking first at the general situation and then the specific position relating to Tesco and each of the three areas of housing allocation land.
  189. As to the general situation in August 1999, the statutory development plan comprised (i) the Somerset Structure Plan Alteration No.2, adopted in September 1992 and (ii) the Burnham-on-Sea Area Local Plan, adopted on 18 April 1990. A development guide regulated development at Rosewood Farm including the construction of the EDR. The British Telecom radio station (which became H16 in the deposit draft local plan) is within the urban area development boundary of Burnham-on-Sea in the adopted local plan but the land to the north of the radio station and to the east of the EDR, which became housing allocations H22 and H24 in the deposit draft local plan, were outside the urban area development boundary.
  190. In February 1997 the Somerset Structure Plan Review Deposit Plan was published which included provision for additional housing in Somerset, including Sedgemoor.
  191. In June 1999 Sedgemoor published the deposit draft of a revised Sedgemoor District Local Plan. This deposit draft local plan included provision for new housing, including Proposals H16, H22 and H24 on land immediately to the east of the EDR. I accept the evidence of Mr Tait that officers of Sedgemoor did not support allocations H22 and H24, on the grounds that they would breach the line of the EDR as the eastern boundary of Burnham-on-Sea. This objection applied to a lesser extent to H16. These allocations were an issue at the council elections the previous May, following which there was a change of political control, the new Conservative controlled council inheriting a development strategy which it did not support. Comments on the draft deposit local plan were invited by 2 August following publication. Allocations H22 and H24 were the subject of numerous objections: for H22 Mr Tait said that 266 objected and a report in May 2000 gives the number as 250; for H24 Mr Tait said 240 objected and the May 2000 report gives the figure as 189. All the objections referred to in the May report were on the grounds that development should be located north of Stoddens Road. On 25 May 1999 the Planning Committee resolved to treat the proposals in the deposit draft local plan as a material consideration in the determination of planning applications received after 21 June 1999.
  192. One of the key objectives of the deposit draft (page 5) refers to the maximum use of brownfield land and existing buildings and the minimal use of greenfield sites. H16 is a brownfield site; H22 and H24 are greenfield sites. The plan has a sequential approach to new development. This is set out in Policies STR4 and 5. Policy STR4 provides that:-
  193. "The overall policy on development distribution for the period 1991-2011 is to release land and sites on the basis of the following priorities:
    1. Firstly on brownfield land or sites which offer the opportunity for redevelopment or re-use, the development of which would contribute towards regeneration, viability and vitality, and which are within or close to existing or proposed public transport corridors in this order:
    (a) …
    (b) within Burnham-on-Sea/Highbridge;
    (c) …
    (d) …
    (e) …
    2. Secondly on greenfield sites, only if it is demonstrated that sufficient brownfield sites or re-use opportunities are unavailable. It shall be in this order:
    (a) …
    (b) at Burnham-on-Sea/Highbridge;
    (c) …
    (d) …"
    Policy STR5 provides that:-
    "The maximisation of the re-use of previously developed sites and the re-use of existing buildings is sought. The development of additional greenfield sites in advance of the development of brownfield sites and re-use of existing buildings will be resisted unless it can be demonstrated that continuing land supply cannot be met from these sources."
    Thus, overall, development policy is clearly directed to brownfield development (H16) with greenfield development (H22 and H24) as the second choice where insufficient brownfield sites are available, both with Burnham-on-Sea/Highbridge as a second choice location.
  194. The draft deposit local plan has been prepared on high and low housing allocations (9,800 or 9,200 additional dwellings for Sedgemoor) to reflect the figures recommended by the structure plan Panel and county council structure plan modification respectively. It was thought likely that the Secretary of State will use his power to direct that the higher figure be used (paras 4.04-4.06). Much additional housing has already been constructed or is committed in existing local plans. The remaining requirements to 2011 (as at April 1998) were 820 dwellings brownfield capacity and 450 (low allocation) or 1,100 (high allocation) for greenfield sites (Figure 4.1).
  195. For greenfield development in Burnham-on-Sea and Highbridge, Sedgemoor considered two options. Option 1 is development on three sites (H22, Brue Farm at Highbridge (H23) and H24). Option 1 is stated to have the advantage of close proximity and easy access to town centres and employment sites. These three greenfield sites can be developed without the need for significant additional highway infrastructure but would require pedestrian and cycle links between Burnham-on-Sea and Highbridge railway station. This option allows for housing provision to be limited to the low growth requirement by deleting H24. Option 2 is development on a single site in north-east Burnham (north of Stoddens Road). This strategy provides the opportunity to make a significant extension to the EDR. Development would be less well related to existing facilities and services. Sedgemoor considered option 1 to have the greatest advantage and it is proposed in the emerging local plan. As noted above this does not have the support of the officers nor the new Conservative administration which took control of the council in May 1999. I accept Mr Tait's evidence that option 2 enjoyed substantial political and public support and that allocations H22 and H24 were strongly opposed.
  196. One of the key objectives of Transport and Movement Policy in the deposit draft local plan is the reduction of traffic congestion and pollution. Somerset and Sedgemoor are working together on town and corridor transport studies to identify the transport needs of the district. Burnham-on-Sea and Highbridge will be the subject of a town study. Policy TM1 refers to the means to be used to achieve safe and sustainable transport including (para d):-
  197. "the Developer shall provide the transport infrastructure required by the development before the development is brought into use. Where off-site works are required, these shall be funded by the developer;"
    The plan records traffic congestion in the summer months due to holiday traffic to Berrow and Brean and then refers to the EDR which "should be complete to Stoddens Road within the next few years." Policy TM2 states that development prejudicial to the listed highway infrastructure (including the EDR (para e)) will not be permitted.
  198. The Shopping and Town Centre Policy in the deposit draft follows national policy in proposing a sequential test for the location of new retail development and will be considered below under the proposed extension to Tesco.
  199. In my judgment a hypothetical purchaser of the reference land in August 1999 would have considered that the general planning situation had a high degree of uncertainty. Unless the reference land can unlock any development value in the Tesco site (which I find below is not the case) it can only have a ransom value in respect of the housing allocation land to the east of the EDR. The adopted local plan at the date of valuation shows this land as outside the urban area development boundary, except the British Telecom radio station, but this site and the other land are not allocated for housing. The housing allocation which might give the reference land a ransom value is in the deposit draft local plan published in June 1999, only two months before the valuation date. Although the land to the east of the EDR is allocated for housing (H16, H22 and H24) the surrounding circumstances introduce uncertainty. There was a change of political control in the month before publication of the deposit draft and the incoming administration inherited a housing development strategy it did not support, which was also opposed by the officers and had attracted a large volume of objections by the valuation date. The development proposals are themselves imprecise due to the uncertainty regarding the housing provision requirement in the emerging review structure plan. The deposit draft local plan considers two options. Although the option including H22 and H24 is on balance said to have the greatest advantage and is proposed in the plan, there would have been uncertainty in the mind of a purchaser of the reference land. He would have anticipated opposition to the greenfield allocations H22 and H24 due to the eastward expansion of Burnham-on-Sea beyond the existing boundary of the EDR.
  200. I turn now to the specific planning position in August 1999 in respect of Tesco and the housing allocation land.
  201. The claimants' position with regard to Tesco grew in importance during the hearing. There are two aspects: the possibility of enforcement action in respect of unauthorised retail floor space and the possible grant of planning permission for an extension to the supermarket.
  202. I deal first with the possibility of enforcement action. This involves consideration of the planning permissions granted in respect of the supermarket. On 25 September 1995 conditional planning permission was granted for the "erection of neighbourhood shopping centre, associated car parking and formation of access thereto" on Ben Travers Way, Rosewood Farm. The gross floor area was 1,384 sq m with 995 sq m of net retail space. On 1 December 1995 conditional planning permission was granted for "erection of extension to neighbourhood shopping centre" at Rosewood Farm Neighbourhood Centre. The proposed gross floor area was 1,604 sq m with net retail space of 1,035 sq m. Condition 16 provided that:-
  203. "The area of net retail floorspace shall be restricted to those areas shown on the approved layout plan. There shall be no conversion of ancillary storage/office/or circulation areas to retail use without the prior written consent of the local planning authority."
    The supermarket was built between June and December 1996 and acquired by Tesco in 1997.
  204. On 2 June 1998 Tesco applied for planning permission for "proposed extension to the existing Tesco store to provide additional sales and bulk storage floorspace and ancillary works." The application stated that the existing total floorspace was 2,044 sq m with 1,403 sq m of retail floor space. This application was not determined; an appeal was made and then withdrawn.
  205. On 25 January 1999 a planning application was received for extensions to the south and north elevations to the Tesco supermarket. By a letter dated 26 February 1999 Sedgemoor drew the attention of Tesco's agents to the discrepancy in floor areas and this was reported to the planning committee. The committee resolved to refuse planning permission and the application was withdrawn on 17 June 1999.
  206. The parties have been unable to agree floor areas or the arrangement in respect of uses within the supermarket. The discrepancy between 1,035 sq m of retail space permitted under the planning permission dated 1 December 1995 and the 1,403 sq m stated to be in use for retail trading was agreed to be due to the use of storage space for retail sales in contravention of condition 16 in the December 1995 permission.
  207. The position at the valuation date was that the supermarket had been built under a planning permission authorising 1,035 sq m of retail floorspace subject to a condition restricting the conversion of ancillary space to retail use without consent. On a planning application in June 1998 the existing retail floorspace was stated to be 1,403 sq m. The parties have been unable to agree floor areas or uses.
  208. The position regarding a possible breach of planning control was uncertain at the date of valuation. The parties have been unable to agree areas or uses. I cannot be certain that there has in fact been a breach of condition 16: all I know is that the December 1995 planning permission allowed 1,035 sq m of retail space and that the planning application of June 1998 stated the retail area to be 1,403 sq m. There appears to be a breach of condition 16 by an extension of the retail floorspace but the position is far from certain. The stated area of 1,403 sq m may be incorrect. Furthermore, there is no evidence to show that Sedgemoor were contemplating enforcement action or that Tesco were in any way concerned that such action might be taken. It is inconceivable that Tesco would contemplate buying the reference land solely to assist in remedying this breach of planning control or that the purchaser of the reference land would contemplate that Tesco would even consider taking such action.
  209. I turn now to the Tesco extension. On 2 June 1998 Tesco applied for planning permission for an extension giving the total additional floor area as 757 sq m, comprising 604 sq m retail and 153 sq m storage. The existing floor area was stated to be 2,044 sq m giving an enlarged supermarket of 2,801 sq m. An appeal against the non-determination of this application was withdrawn on 16 April 1998. A further planning application for an extension was made in January 1999 and withdrawn in the following June. At the date of valuation there were no applications or appeals outstanding. In November 1997 Tesco bought 1.21 hectares of adjoining residential land.
  210. It is common ground that planning permission would be refused for an extension to Tesco while the EDR at Rosewood Farm is incomplete. Lack of adequate access would have been one of the grounds for refusal. The important question, however, is whether planning permission would have been refused on policy grounds even if adequate access existed. This involves a consideration of retail policy, national and local.
  211. I start with PPG1, para 27 of which refers to a sequential approach to the siting of retail development. This is explained further in PPG6:-
  212. "1.10 In drawing up their development plans, local planning authorities should, after considering the need for new development, adopt a sequential approach to selecting sites for new retail development. Both local planning authorities and developers selecting sites for development should be able to demonstrate that all potential town centre options have been thoroughly assessed before less central sites are considered for development for key town centre uses. If, however, there is no need or capacity for further developments, there will be no need to identify additional sites in the town.
    1.11 Adopting a sequential approach means that first preference should be for town centre sites, where suitable sites or buildings suitable for conversion are available, followed by edge-of-centre sites, district and local centres and only then out-of-centre sites in locations that are accessible by a choice of means of transport."
  213. In the adopted local plan Proposal BH/S2 (Neighbourhood Shopping Centre, Love Lane, Burnham) provides for the allocation of land at Rosewood Farm for retail uses to serve local needs. Paras 5.14 and 5.15 interpret this proposal. A scheme comprising small units and possibly a small supermarket (up to 500 sq m gross) would be acceptable, with a petrol filling station. The site has potential for a 'bulky goods' retail warehouse but a food-based retail store in excess of 1000 sq m would not be acceptable due to the likely adverse effects on existing town centres. Any planning permission granted will be subject to conditions restricting the type of goods to be sold.
  214. The development guide for Rosewood Farm, to be considered with the adopted local plan, states that the retail site is considered suitable for a smaller scheme than the large supermarket schemes which have been refused planning permission in the past, to serve as a neighbourhood shopping centre with shop units and possibly a small supermarket of up to 500 sq m.
  215. Chapter 6 of the deposit draft local plan deals with shopping and town centres and follows the sequential approach in PPG1 and PPG6. The plan identifies town centre areas where it is expected that new shopping proposals will be accommodated (para 6.10). Where it is not possible to find suitable sites within these areas, preference will be given to edge-of-town centre sites (para 6.14). Para 6.15 is directly concerned with the shopping centre at Rosewood Farm:-
  216. "Where proposals are at an appropriate scale, the next preference will be sites in Local Centres. These are small groups of shops and limited other services serving an immediate neighbourhood. They are therefore only appropriate for small-scale additional development."
    The list of local centres identified on the proposal map includes Rosewood Farm. Only if no suitable sites are available in any of these locations will out-of-town centre sites be considered. This sequential approach is set out in Policy TC1:-
    "Proposals for new retail development will be permitted firstly within Town Centres, then on Edge-of-Town Centre locations, followed by Local Centres, provided that:
    (a) the proposal is of a scale appropriate to the Town Centre or Local Centre;
    (b) the proposal would help maintain and enhance the viability and vitality of the Centre; and
    (c) the proposal would not damage the viability of other nearby Town Centres as a whole."
  217. There are two questions to be answered as at the valuation date. What was Tesco's position regarding an extension to the Rosewood Farm supermarket? What were the prospects for the grant of planning permission for such an extension?
  218. At the valuation date there were no outstanding applications or appeals for an extension. I am, however, prepared to accept that Tesco had a continuing intention to increase the size of their supermarket at Rosewood Farm. This is supported by their past activities. They may well have bought the store in 1997 with the intention of expansion (see the file note of a meeting on 21 May 1996 between representatives of Tesco, Somerset and Sedgemoor). They purchased 1.21 hectares of adjoining land, presumably for expansion, or perhaps for additional parking. They submitted planning applications for extensions in June 1998 and January 1999. I have no evidence as to why they subsequently withdrew from these proposals but I do not think that I can infer that the withdrawals show an intention to abandon their wish to expand this supermarket.
  219. The more important question, however, is what were the prospects at the valuation date for the grant of planning permission for an extension? It is common ground that the incomplete state of the EDR would have been a ground for refusal of planning permission. I therefore consider the question on the assumption that adequate access existed and consider whether permission would have been refused on policy grounds. It is the claimants' case that there was an 80 - 100% chance of planning permission for a major extension. I regard that estimate as very optimistic. For policy reasons there was, in my view, a high level of certainty that planning permission would have been refused on the grounds that such an extension would have been contrary to the retail policies in the adopted local plan, the development guide for Rosewood Farm and the deposit draft local plan.
  220. In the adopted local plan Proposal PH/S2 refers to the neighbourhood centre at Rosewood Farm. A major extension to Tesco would contravene this Proposal which refers to the acceptability of small units "and possibly a small supermarket (up to about 500 sq m gross)" (para 5.14). In para 5.15 reference is made to a bulky goods retail warehouse of up to 1,000 sq m net as a possible development but it then states that "a food-based retail store of this scale would not be acceptable because its likely adverse effects on the existing town centres…".
  221. The development guide for Rosewood Farm also emphasises the modest scale of retail development (D.10):-
  222. "Proposed supermarket schemes for this site have been refused planning permission because of the likely adverse effect upon the vitality and viability of the existing town centres. The site is considered suitable for a smaller scheme to serve as a neighbourhood shopping centre. A facility including individual shop units and possibly a small supermarket (up to about 500 sq m growth) is envisaged."
  223. In the deposit draft local plan the Tesco Supermarket is one of the local centres, which "are only appropriate for small-scale additional development" (para 6.15). Policy TC1 sets out a sequential test for the location of retail development, which allows development in local centres (after consideration of town centre and edge-of-town-centre locations) provided that "the proposal is of a scale appropriate to the … Local Centre", would help to maintain and enhance the viability and vitality of the centre and would not damage the viability of other nearby town centres as a whole.
  224. When the application of January 1999 went to the Planning Committee of Sedgemoor on 9 March the officers' report recommended refusal:-
  225. "subject to views of TC and CHA and any adverse response to statutory publicity and admission of existing and proposed floor plans, a roofspace plan and detailed of existing and proposed servicing arrangements
    1. The proposal represents large scale additional retail development on a site outside the commercial town centre as defined in the Burnham-on-Sea Area Local Plan on a site allocated to serve local needs only. The proposal is therefore contrary to Policy BH/S1 and Proposal BH/S2 of the Burnham-on-Sea Area local plan.
    2. Outline planning permission has been granted for a retail foodstore in the centre of Highbridge, less than 3 km from the application site, on a site accessible by a choice of means of transport and readily accessible on foot and by cycle. The retail facility proposed by the applicant therefore fails the sequential test set out in Planning Policy Guidance Note PPG6 and Structure Plan Review Policy 23."
    The committee resolved to amend the reasons for refusal to include a reference to the absence of a demonstrable need for the extension.
  226. In my judgment, a purchaser of the reference land at the valuation date would have concluded that it was likely that planning permission for an extension to Tesco would have been refused on retail policy grounds, irrespective of access. The completion of the EDR across the reference land would not have led to the grant of planning permission due to the continuing retail policy objection. The mere possibility of new housing on the housing allocation land would not have been enough to override the retail policy objections. From my inspection of the town centres of Burnham-on-Sea and Highbridge I am sure that Sedgemoor would have wished to protect these centres from out of centre competition - to protect their viability and vitality – particularly Highbridge. There was no incentive for Tesco to contribute (on Mr Jones's figures) approximately £1.67m towards the purchase of the reference land having regard to the extreme uncertainty of the planning position.
  227. I now consider the housing allocation land, starting with the British Telecom radio station, a brownfield site, Proposal H16. The parties have agreed that at the valuation date there was a 99% certainty that this allocation would be included in the adopted local plan. The question is, however, what degree of certainty was there that it would be a requirement of any grant or planning permission for housing development on this land that there should be completion of the EDR across the reference land?
  228. The site is within the urban area development boundary in the adopted local plan but is not allocated for housing in that plan. Proposal PH/SP1 states that development boundaries encompass those sites which are appropriate for development, although this is not necessarily a conclusive indication of development potential; other planning policies or material considerations may preclude development. In the deposit draft it is allocated for housing and it is noted that it adjoins Proposal H22 and that "a comprehensive development and design brief will be required for both sites" (para 4.33). The design brief in Appendix 4.1 includes the following provisions:-
  229. "the site shall preferably be developed comprehensively with the land to the north of the site (Proposal H22). If development proceeds in advance of a comprehensive scheme, then a significant landscaped buffer and edge treatment to the north western and north eastern boundaries will be required;
    vehicular access to the site shall only be from Worston Road (adjacent to 148 Worston Road) or from the north in conjunction with the comprehensive development of adjoining land (Proposal H22);
    the development shall include a comprehensive framework of cycleway and pedestrian routes through and across these sites to link with the existing cycleway network of Rosewood Farm and to the King Alfred Community School;"
  230. I do not think that a purchaser of the reference land and the owners of the H16 land, having considered this material, would conclude that planning permission would be dependent upon the completion of the EDR across the reference land. The design brief specifically provides that vehicular access shall only be from Worston Road or from the H22 land in the north in conjunction with a comprehensive development. The existing access to the radio station is in Worston Road (adjacent to no.148) and I noted on my inspection that the length of this road from the roundabout to just past this entrance is wider than the remainder of Worston Road. In my view a purchaser would consider this access to be adequate. Faced with these clear statements as to access, I do not think that a purchaser of the reference land would attribute (on Mr Jones's figures) just under £700,000 ransom value to the H16 land in conjunction with the purchase of the reference land. There is a clear indication in the design brief that access to the H16 land need not be from the EDR. The claimants referred to the need to provide cycleway links and pedestrian routes, which they said would need to cross the reference land. I do not think that a purchaser at the valuation date would consider the matter with this degree of detail when assessing the general planning position in order to make his bid for the reference land.
  231. I also have doubts as to whether Sedgemoor could have required an applicant for planning permission for the H16 land to complete the EDR across the reference land, having regard to para B12 of Circular 1/97: Planning Obligations, which contains the following advice:-
  232. "Developers may reasonably be expected to pay for or contribute to the cost of infrastructure which would not have been necessary but for their development. The effect of such infrastructure investment may be to confer some wider benefit but payments should be directly related in scale to the benefit which the proposed development will derive from the facilities to be provided. Developers should not be expected to pay for facilities which are needed solely in order to resolve existing deficiencies nor should attempts be made to extract excessive contributions to infrastructure costs from developers. It might on occasions be considered acceptable for an obligation to be sought where it would overcome an existing constraint which is materially exacerbated by the proposal. However, developers should not be asked, for example, to fund local road improvements unless the need for these improvements arises mainly from the proposed development. In addition, situations may arise where an infrastructure problem exists prior to the submission of an application for planning permission. Although the need to improve, upgrade or replace such infrastructure does not arise directly from the proposed development, it would clearly be inappropriate to grant planning permissions for a development which would exacerbate a situation which is already unsatisfactory. However, developers may reach agreement with an infrastructure undertaker to bring forward in time a project which is already programmed but is some years from implementation."
    These doubts also apply to Proposals H22 and H24.
  233. I now consider allocation H22, the land immediately to the north of H16. This is a greenfield site. It is not allocated for housing in the adopted local plan. It is allocated for housing in the deposit draft local plan, Proposal H22. "This site is well related to the facilities of Burnham and Highbridge …" (para 4.58). As to access, para 4.59 states that "developed comprehensively with the Radio Station it can be accessed directly from the Eastern Distributor Road, Pepperall Road and Worston Road." The design brief in Appendix 4.1 includes the following provisions:-
  234. "access for pedestrians and cyclists should be provided to King Alfred Community School and connections to the wider cycle and pedestrian network;
    vehicular access shall only be provided from Pepperall Road and Worston Road;"
    Mr Betty said that the suggestion that the H22 land could be accessed solely from Worston Road (in conjunction with H16) seems to be mistaken. The parties have agreed that at the valuation date there was an 80% certainty (with both the high and low housing provision) that this allocation would be included in the adopted local plan. Again, the question is what degree of certainty was there that it would be a requirement of any grant of planning permission for housing on this land that there must be completion of the EDR across the reference land? A further question is whether planning permission would in fact have been granted at the valuation date?
  235. Mr Tait said that at the valuation date planning permission for development on the H22 land would have been refused on grounds of prematurity. Government policy regarding prematurity forms part of PPG1: General Policy and Principles:-
  236. "47. Questions of prematurity may arise where a development plan is in preparation or under review, and proposals have been issued for consultation, but the plan has not yet been adopted or approved. In some circumstances, it may be justifiable to refuse planning permission on grounds of prematurity. This may be appropriate in respect of development proposals which are individually so substantial, or whose cumulative effect would be so significant, that to grant permission would prejudice the outcome of the plan process by predetermining decisions about the scale, location or phasing of new development which ought properly to be taken in the development plan context. A proposal for development which has an impact on only a small area would rarely come into this category; but a refusal might be justifiable where a proposal would have a significant impact on an important settlement, or a substantial area, with an identifiable character. Where there is a phasing policy in the development plan, it may be necessary to refuse planning permission on grounds of prematurity if the policy is to have effect.
    48. Other than in the circumstances described above, refusal of planning permission on grounds of prematurity will not usually be justified. Planning applications should continue to be considered in the light of current policies. However, account can also be taken of policies in emerging development plans which are going through the statutory procedures towards adoption (or approval). The weight to be attached to such policies depends upon the stage of plan preparation or review, increasing as successive stages are reached.
    For example:
    ……
    Where a plan has been deposited but no objections have been lodged to relevant policies, then considerable weight may be attached to those policies because of the strong possibility that they will be adopted (or approved) and replace those in the existing plan. The converse may apply if there have been objections to relevant policies. However, much will depend on the nature of those objections and also whether there are representations in support of particular policies;
    ……….
    49. Where planning permission is refused on grounds of prematurity, the planning authority will need to indicate clearly how the grant of permission for the development concerned would prejudice the outcome of the development plan process."
  237. Applying this policy and guidance to the facts in this case I agree with Mr Tait that planning permission would have been likely to have been refused on grounds of prematurity. In my judgment this would have been the view of a purchaser of the reference land and the owners of the H22 land in August 1999. The emerging local plan had only recently been placed on deposit, with two development options (para 4.49) and high and low housing provision. This allocation did not have the support of the officers and was contrary to the development strategy of the new council after the May 1999 elections. It represented the eastward expansion of Burnham beyond the EDR onto open farmland. It was inevitable that this allocation would be controversial and lead to numerous objections, as was in fact the case. The strength of these objections would have been known at the valuation date. The grant of planning permission for residential development on this land would inevitably "prejudice the outcome of the plan process by predetermining decisions about the scale, location or phasing of new development which ought properly to be taken in the development plan context."
  238. I am satisfied that planning permission would have been likely to have been refused at the valuation date on grounds of prematurity. This ground of refusal would have continued to apply until the emerging local plan had reached a more advanced stage, at least two and possibly three or four years in the future.
  239. Even if planning permission would not have been refused on the grounds of prematurity, I do not think that it could be seen to be certain, or even likely, that planning permission would only have been granted if the EDR had been completed across the reference land. Access to the land from the EDR is only one of the options, Pepperall Road and Worston Road are also stated as an access point. The design brief goes further and states that "vehicular access shall only be provided from Pepperall Road and Worston Road." Mr Betty cast doubt on this statement but it was in the emerging plan at the valuation date and would, in my view, have carried some weight with a purchaser of the reference land and the owners of the H22 land.
  240. I do not think that they would have concluded that planning permission for the H22 land would be dependent on completion of the EDR across the reference land and would attribute (on Mr Jones's figures) just over £2m ransom value to this land in conjunction with the purchase of the reference land.
  241. Finally, I consider allocation H24, the land immediately to the south of the Edithmead Link Road (B3140) extending southwards to allocation H22. This is a greenfield site. It is not allocated for housing in the adopted local plan. It is allocated for housing in the deposit draft local plan, Proposal H24, but only for the high housing requirement. "It is the least well related to facilities and services and represents the most significant extension of the built-up area into countryside" (para 4.63). The design brief provides for pedestrian and cyclist links and that "vehicular access shall only be provided from the distributor road." The parties have agreed that at the valuation date there was a 50% certainty (high housing provision) or a 20% certainty (low provision) that this allocation would be included in the adopted local plan. Again, the important questions are the degree of certainty that planning permission would be granted for housing on this land with a requirement of completion of the EDR across the reference land? Would planning permission have in fact been granted?
  242. In my judgment, the question of prematurity would have applied to this land at the valuation date with even more force than H22. I have no doubt that planning permission would have been refused for housing on this land at the valuation date and for several years thereafter. Doubts about the grant of planning permission were much greater, even without the question of prematurity, as is seen by the 20%-50% agreement as to eventual allocation. On Mr Jones's optimistic valuation figures only approximately £286,000 is attributable to this land as part of the ransom value of the reference land. A purchaser of the reference land at the valuation date and the owners of the H24 land would not have seen the completion of the EDR across the reference land as a requirement for the grant of planning permission for development on the H24 land.
  243. To summarise the position under the issue of certainty of planning, the general planning situation had a high degree of uncertainty at the valuation date. The deposit draft local plan was published only two months before the valuation date with two development options and high and low housing provision. Housing allocations H22 and H24 did not have the support of the officers and were contrary to the development strategy of the party which took control of the council a month before publication of the plan. These allocations extend the built-up area of Burnham into open countryside beyond the EDR and inevitably produced a large volume of objections. The specific situation was also uncertain. There was no evidence that Tesco were concerned regarding any breach of planning control by the unauthorised expansion of the retail floor space or that Sedgemoor were contemplating enforcement action. Tesco may well have wished to extend their supermarket but it was likely that planning permission would have been refused on grounds of retail policy, irrespective of the completion of the EDR. Planning permission would have been likely to be granted for development on H16 land with access from Worston Road (as existing) and planning permission would have been refused on the H22 and H24 land on the grounds of prematurity.
  244. Issue one is: with what degree of certainty at the valuation date would the hypothetical purchaser of the reference land view the need for the completion of the EDR across that land as a requirement for the grant of planning permission for housing development on the H16, H22 and H24 land and to authorise the existing uses at Tesco and for further development? For the reasons given above the answer must be a low degree of certainty: a high degree of uncertainty. This conclusion is based on the facts known at the valuation date. Consideration of facts after that date would have strengthened this conclusion. Confirmation of the purchase notice has been disregarded. I have looked at this issue through the eyes of a hypothetical purchaser of the reference land in August 1999, taking a broad approach. It has not been necessary to consider much of the detail of the claimants' case, eg. the application of Estate Roads in Somerset and DB 32, nor to consider alternative routes for the EDR and the position with regard to the Prowting strip.
  245. PURCHASE ARRANGEMENTS
  246. The second issue relates to the purchase arrangements assumed by Mr Jones. Can it be assumed that a hypothetical purchaser of the reference land at the valuation date had entered into the consortium purchase arrangements assumed by Mr Jones?
  247. It must be said at the outset that, in view of my decision on the first issue, the answer to this question is likely to be "no". It is inconceivable that the purchaser and the owners of Tesco and the allocation land would have agreed to buy, sell or contribute the large sums suggested by Mr Jones, or entered into any arrangements at all, when the planning situation was uncertain and it was unlikely that completion of the EDR across the reference land was necessary to release development value on other land. Consideration of the second issue could end there. I will, however, consider in more detail the claimants' case on this matter.
  248. The detail of the purchase arrangements assumed by Mr Jones emerged for the first time during his cross examination although they are hinted at in his initial report. Their effect, and I am sure their purpose, is to greatly increase the value of the reference land by aggregating the individual ransom values of Tesco and the H16, H22 and H24 land.
  249. In his initial report Mr Jones considered the likely purchaser or purchasers of the reference land. He said that the parties most likely to gain from the purchase were British Telecom, Tesco and Prowting, who may co-operate and pay a premium price for certainty of access. However, there would have been a strong incentive for Prowting to act with the claimants without involving other owners by seeking an alternative access to the east. Prowting would have bid for the reference land to gain control of access to the allocation land and Tesco. A Rosewood Farm developer would have been a prospective purchaser with the same motive to acquire the reference land as Prowting. Tesco would have been a particular purchaser to ensure certainty of access for a major extension, acting alone or in conjunction with others. British Telecom would have sought to protect the availability of certain access to the H16 and H22 land and might have combined with others to buy the reference land. British Telecom would also have sought to share equally in any ransom premium that Prowting and other owners would seek. A land speculator would have been interested in the reference land as a strategic parcel of land. Mr Dodgson, owner of part of the H22 land and possibly part of H24, and formerly active in ransom situations on Rosewood Farm, may have been a buyer. Ownership of the reference land controlled the access to the allocation land and Tesco. The claimants as owners of the land would have acted with Prowting or Mr Dodgson. Thus, Prowting probably in consortium with Tesco and/or British Telecom would have calculated the price which another purchaser would pay for the reference land and then increased it by about 10% to ensure certainty of acquisition. (I note that this particular part of Mr Jones's evidence seems to have been abandoned by the close of the hearing).
  250. Mr Jones then considered how a competent surveyor acting for the claimants as owners of the reference land would have approached the situation to achieve a sale at the best price on the valuation date. He would have approached Tesco, the owners of the housing allocation land, developers at Rosewood Farm and other developers to explain the situation, namely the need to secure access across the reference land to enable development to take place on other land. The reference land should not be allowed to fall into the hands of a speculator. Prospective purchasers would have been encouraged to bid individually or in a consortium to maximise the price.
  251. That is Mr Jones's approach to the valuation of the reference land in his initial expert report. During cross examination at the hearing, however, he then went on to explain that the result of this marketing would have been the formation of a consortium to buy the reference land at a price reflecting the increase in value of the housing allocation land and the Tesco land. The purchaser would have been Tesco, Prowting or British Telecom but acting in consortium, each contributing to the total price. The arrangements for purchase would have been made in the four to six months before the valuation date. The most likely purchaser would have been Prowting. Tesco would have retained their land and paid Prowting £1,672,341 as their contribution towards the price of the reference land. Prowting would have agreed to buy the H16 allocation land from British Telecom on an unconditional contract, to buy the H22 land on a conditional contract, and to take an option to buy the H24 land. These arrangements would have been completed by the valuation date. Prowting, or the lead purchaser, would then have bought the reference land on that date for £4.8m. The completion of the EDR across the reference land would now be secured leading to the grant of planning permission and increases in the values of the housing allocation land and Tesco.
  252. Thus, the detail of the consortium arrangements, so important in increasing the value of the reference land to reflect the aggregate ransom value, only emerged during Mr Jones's cross examination. Mr Blohm did not refer to this matter in opening; Mr Jones did not refer to these arrangements in examination in chief; Mr Alford of Prowting (who gave evidence before Mr Jones) did not refer to them nor, more importantly, confirm that Prowting would have acted as lead purchaser in the consortium as assumed by Mr Jones. Mr Alford's evidence was that, on the assumption that Somerset or Sedgemoor would not have purchased the reference land because completion of the EDR was no longer required for Rosewood Farm and there was no threat of compulsory purchase, and the reference land was offered as potential access to the housing allocation land, Prowting or other developers would have sought to acquire the land. Mr Blohm in his closing submissions spoke briefly about the assumed consortium purchase and referred to Lady Fox's Executors v Commissioners of Inland Revenue [1994] 2 EGLR 185 at 186B-G.
  253. Mr Chivers, in his valuation evidence for Somerset, criticised the purchase arrangements on the grounds that they were not viable on the facts. His objection was one of fact: he recognised that arrangements such as these could occur in the market but said that there would have been considerable problems in putting together these particular consortium arrangements. He gave examples of the problems which would have arisen in securing the agreement of all parties. He was particularly sceptical about Mr Jones's suggested aggregation of ransom value.
  254. Mr Roots, in his closing submissions, said that the justification for the aggregation of ransom values had puzzled Somerset since Mr Jones's valuation report first appeared. The late justification was put forward because Mr Jones knew that it is wholly unrealistic to expect anyone to pay over £4.5m for the reference land on an outright purchase. The arrangements were fanciful. They are not excluded under section 5 rule (2) of the 1961 Act. If the claimants could prove that they would happen it would be as legitimate a way of selling the land as any other. They are, however, so unrealistic in the circumstances of this case as to be incredible. Even if it is assumed that Tesco set out to buy the reference land, it is impossible to see for what reason British Telecom, Prowting, Mr Dodgson and others would have joined in the arrangements. They would have just sat back and watched events unfolding. If Tesco did buy the reference land and create the missing link in the EDR, they would not then be in a position to ransom anyone else to recover some of their outlay.
  255. Decision
  256. It is common ground that the consortium purchase arrangements assumed by Mr Jones are not inconsistent with the hypothetical open market sale under rule (2) of section 5 of the Land Compensation Act 1961. The assumption made by Mr Jones is an assumption of fact and to succeed there must be evidence to support it. It is not enough for Mr Jones to say that he has assumed that these arrangements were in place on the valuation date, thereby increasing the value of the reference land by several million pounds. The burden of proof is on the claimants and it is a heavy one. It is a two-fold burden. First, to prove that all parties would have taken the view that for the Tesco land and all the housing allocation land there was a high degree of certainty that completion of the EDR across the reference land was necessary to the grant of planning permissions for the development of those lands. This is issue one where I have found against the claimants. Second, to prove that the consortium arrangements assumed by Mr Jones would have been in place on the valuation date. This is issue two.
  257. What is the evidence to support these assumed arrangements? It is solely the opinion of Mr Jones, unsupported by any other evidence. I suspect that the reason for this is that these assumed arrangements were formulated during the hearing to fill this gap in Mr Jones's evidence. They were not mentioned in Mr Blohm's opening, although they are crucial to the high value being sought by the claimants. They were not mentioned by Mr Alford of Prowting, who are said to be the lead purchasers. Mr Blohm could have put them to Mr Alford in chief; Mr Roots could have cross examined him on them. But because they only emerged for the first time in Mr Jones's later cross examination the chance for corroboration was lost. I suspect that these arrangements had not been formulated when Mr Alford gave his evidence at the start of the hearing. Like Mr Roots and Somerset I was also puzzled as to the reason for the aggregation of ransom values when I read Mr Jones's initial expert report before the hearing. A more likely situation seemed to me to be that, assuming certainty of planning, the owners of the allocation land and Tesco would all have bid separately for the reference land, the highest bidder would have obtained the land for the share of ransom value attributable to his land, and would have built and dedicated the EDR across the reference land, the use of which would then have benefited the other owners without payment.
  258. I do not accept Mr Jones's unsupported opinion that the assumed consortium arrangements would have been in place on the valuation date. Having read his expert report and listened to his oral evidence, I have doubts as to whether his evidence represented his honest and objective opinion. In short, I think he was putting a case for the highest possible figure rather than putting forward an objective opinion. For these reasons I reject the existence of the assumed purchase arrangements. There are other flaws in this part of the claimants' case.
  259. In my view, in order to form an accurate opinion regarding the assumed purchase arrangements, it is necessary to know the identities of the owners of all the land involved and some information regarding their likely attitude to these arrangements. We know some, but not all, of the owners. The ownership of the H24 land is unknown. I was told that there may be three owners and one of them may be Mr Dodgson. The extent of the ownership of the H22 land was not known, although it was known that British Telecom and Mr Dodgson were owners and possibly Mrs Baker. We have no information regarding the likely attitude of any of the H22 and H24 owners to the assumed consortium arrangements. Would Mr Dodgson have co-operated and entered into a conditional contract to sell his part of the H22 land; would he have granted an option on part of the H24 land (if he in fact owned any part of it)? He is known to have been active in ransom situations on Rosewood Farm; he may well have declined to join the consortium and tried to ransom Prowting or other owners. The H16 land was, and still is, an operational radio station, with modern buildings and masts. What evidence is there that British Telecom would have sold this land to Prowting unconditionally by the valuation date? Would they have closed the radio station and relocated elsewhere? I received no evidence as to the position of British Telecom other than they were exploring the redevelopment of H16 for a nursing home and housing development in October 2001.
  260. Mr Jones said that his assumed consortium arrangements would have taken four to six months to complete. This would mean negotiations would have started before the publication of the deposit draft local plan, which was only two months before the valuation date. The housing allocations would not have been published at the start of the negotiations and I cannot see how they would have made progress until the plan was published. Furthermore, four to six months to complete complicated negotiations and reach agreement between at least seven parties is, in my view, wildly optimistic. Mr Chivers criticised this short period and, from my experience of property transactions, I agree with him. It is, I regret to say, another example of Mr Jones's lack of objectivity and therefore lack of credibility as an expert witness.
  261. For these reasons I conclude that it cannot be assumed that the consortium purchase arrangements of Mr Jones had been entered into at the valuation date.
  262. VALUATION
  263. I now arrive at the question of value. In the light of the decisions on the above two issues what was the market value of the reference land at the valuation date?
  264. Mr Jones's valuation is £4.8m and comprises the aggregate ransom value of the three areas of housing allocation land and Tesco. Mr Chivers's valuation is £100,000, a spot figure representing what a speculator would have paid for the land.
  265. The valuation of Mr Jones rests on two foundations: that the requirement to complete the EDR across the reference land in order that planning permission would be granted for the housing allocation land and for further development on the Tesco land was sufficiently certain to persuade a purchaser, acting in a consortium, to pay £4.8m for the land. These are issues one and two which I have decided against the claimants. As to the planning situation (issue one) I have found that there was a high degree of uncertainty, a low degree of certainty, that the grant of planning permission for the housing allocation land and Tesco would be dependent on completion of the EDR across the reference land. I have found that there is no reliable evidence to support the consortium purchase arrangements assumed to have been in place by the valuation date by Mr Jones (issue two). Mr Jones's valuation is dependent on these two assumptions which I have found to be unfounded. Furthermore, I have also found that Mr Jones's evidence was exaggerated, lacking in objectivity and credibility. For all these reasons I reject his valuation. It is unnecessary for me to consider the detail of that valuation.
  266. I am left with Mr Chivers's valuation. Mr Blohm criticised his evidence on the grounds that his valuation was a "forty-years-man-and-boy" valuation, to which I should give no weight; that he has omitted to state the facts on which his opinion is based; and that he has acted as an advocate.
  267. As to the first criticism, Mr Blohm referred to the decision of this Tribunal in Marson v Hasler [1975] 1 EGLR 157, where the member (R C Walmsley FRICS) said (at 158L-159A):-
  268. "Mr Nicholas strongly criticised Mr Stubbs' reliance on analyses, and described the process of analysis as being 'a mere juggling with figures.' He regarded Mr Stubbs as belonging to the 'Analytical School' of surveyors, and he readily accepted that he himself could be regarded as belonging to the 'Forty-years-man-and-boy School'. The tribunal has every respect for able and practical surveyors who belong to the latter 'school', but the fact should be recognised that when a member of this 'school' finds himself unable to agree values with an equally able and practical member of the 'Analytical School', then on a reference to the Lands Tribunal the latter surveyor is apt to have the easier passage.
    The reason for this is quite simple. The tribunal reaches its decision on the evidence presented, and although it does, of course, draw on its own skill, that skill is applied not to the valuation of the subject property but to weighing the evidence given - a process conveniently described as 'valuing the valuations' (and which may involve also 'valuing the valuers'). Opinion evidence, if it is to be certain of carrying weight, needs not only to be based on factual evidence but also to be demonstrably so based. Factual evidence bearing on the value of any land commonly takes the form of comparables; and the purpose of analysing the comparables is to enable unlike features to be identified and distinguished, and to enable like features to be compared. In the present case the procedure adopted by the taxpayer's surveyor was to produce a factual schedule of transactions simpliciter. The surveyor for the Revenue, for his part, as well as producing analyses of his own comparables had also analysed comparables put forward for the taxpayer. On studying the analyses as a whole I find that the taxpayer's set of comparables provide support not for his own case but for the Revenue's."
  269. I agree with these comments but they must be read in the context of the facts of that case and the unusual circumstances in this reference. In Marson the property under consideration was a shop with living accommodation. It was let on lease. This is an investment situation where the value can be reliably assessed by the analysis of comparables (for rental value and yield) and the preparation of a conventional investment valuation. The member noted that the valuation put forward by Mr Stubbs, the analytical surveyor, for the appellant inspector of taxes, seemed to be supported at every stage, but the figures put forward by Mr Nicholas, the forty-years-man-and-boy surveyor, for the respondent taxpayer, appeared to be wholly unsupported. The valuation circumstances in this current reference are wholly different. It is common ground that there are no comparables as to the ransom value or hope value of the reference land. Mr Jones has attempted an analytical approach but it has failed because the underlying assumptions have failed. In short, it is not the correct approach in the unusual circumstances of this case.
  270. In his criticism of Mr Chivers' valuation approach Mr Blohm also referred to the guidance as to the duties of an expert witness given by Cresswell J in The Ikarian Reefer [1993] 2 Lloyd's LR 68 at 81:-
  271. "2. An expert witness should provide independent assistance to the court by way of objective unbiased opinion in relation to matters within his expertise:… An expert witness … should never assume the role of an advocate.
    3. An expert witness should state the facts or assumption upon which his opinion is based. He should not admit to consider material facts which could detract from his concluded opinion:…."
    Mr Blohm said that Mr Chivers did not refer to any facts to support either his valuation or his criticisms of Mr Jones's evidence, particularly as to retail value where Mr Chivers had no knowledge or experience. Mr Chivers was out of his depth and in putting forward an unsupported opinion he acted as an advocate.
  272. As to the criticisms that Mr Chivers failed to support his valuation and criticisms of Mr Jones and acted as an advocate, I can find no substance in them. As I have said there are no comparables, the spot figure valuation can be supported by reasons based upon experience. Mr Chivers's criticisms of Mr Jones's figures now have no relevance due to my rejection of Mr Jones's valuation approach. Having read Mr Chivers's expert report and seen him give evidence, I reject the criticism that he acted as an advocate. An advocate speaks for his client and presents his client's case, whether he believes in it or not. An expert witness speaks for himself. His task is to assist the tribunal by giving an objective opinion. I have not seen anything to lead me to think that Mr Chivers was not putting forward his own objective opinion of value, not-withstanding the absence of supporting facts.
  273. In the unusual circumstances of this case I accept Mr Chivers's forty-years-man-and-boy or spot value approach. He has the necessary qualifications and experience to adopt such an approach to value. He qualified as a chartered surveyor in 1969 and has therefore had 33 years post-qualification experience. He is, and has been, a partner in a well-known firm of surveyors since 1974; and has had 20 years experience in dealing with residential development land, including land assembly. Furthermore, I have found him to be an objective, reliable and competent witness, whose opinion I can accept.
  274. Mr Chivers's valuation rests on the evidence of Mr Tait and Mr Betty to the effect that there was no firm prospect in August 1999 that significant areas of land would enjoy enhanced value which could only be achieved through the reference land. The planning position was one of considerable uncertainty. There are therefore no grounds for attributing significant value to the reference land. In Mr Chivers's opinion it possessed only hope value. Purchase of the land was a speculation. In this light, Mr Jones's figure of £4.8m is not remotely credible. In the real market a purchase would include contingent arrangements. In the absence of those arrangements, as in the hypothetical sale in this reference, the price would be substantially reduced to reflect the risk. In this case there are two contingencies, whether planning permission would have been granted on other land and whether the construction of a road on the reference land would have been a requirement of such permission. There would have been a lack of enthusiasm in the market for a site subject to these two contingencies. Mr Chivers considered possible buyers and concluded that a land speculator would have been the most likely purchaser, but with limited funds.
  275. In my judgment, Mr Chivers saw that the real issue in this case concerned the broad perceptions of a purchaser of the reference land in August 1999 as to the planning position and is not the detailed planning and highways position which forms the basis of the claimants' case.
  276. Mr Chivers said that in the absence of comparable evidence it is incumbent on the valuer to stand back from any theoretical exercise of the type undertaken by Mr Jones and consider whether the result makes sense in all the circumstances. Mr Jones's exercise is not an approach likely to be slavishly followed by a purchaser. He would take a broader approach.
  277. Mr Chivers's approach is to consider the true nature of the asset offered in the market at the valuation date. The purchase of the reference land was a gamble. It required a stake to be put down at indeterminate but lengthy odds. If the odds were not landed, it was a loser. The market preferred to trade in certainties. In this case, uncertainty was not confined to a single issue, eg. planning permission, there were interdependent contingencies to be satisfied. Competitive bids were unlikely although a sale must be assumed. On the one hand the EDR was incomplete at the valuation date and the reference land gave the superficial appearance of constituting a ransom, but, on the other hand, the planning and highways evidence and the realities of the market indicated that the purchase of the reference land in August 1999 was a highly speculative venture.
  278. Mr Chivers said that, having regard to these considerations, the maximum sum which a land speculator would have put at risk was £100,000. This is a spot figure and represents the amount beyond which a purchaser would not have gone on an unconditional purchase without any contingent arrangements. This was a present payment for a future prospect which was highly uncertain. That prospect was that the reference land might be needed in the future for the completion of the EDR. A speculator would have made the highest bid and purchased the reference land at £100,000.
  279. Generally, I agree with Mr Chivers's assessment of the situation at the valuation date. The planning position was uncertain. It was possible that the completion of the EDR across the reference land would be required at some future time, perhaps to allow development on H22 and H24 if those allocations were eventually included in the adopted plan, or due to increased traffic or public pressure and concern regarding the uncompleted length of the EDR which might force Somerset to buy the land and complete the road. But I agree with Mr Chivers that, in view of this uncertainty, the only purchaser of the reference land would have been a land speculator willing to gamble on the crystallisation of ransom value at some future date. He would have paid at the valuation date for the hope of achieving that ransom value in the future, in short he would have paid hope value. He would have speculated on a future capital gain. Mr Chivers put this hope value at £100,000. I accept this figure. It is certainly not too low. In my view it is generous in the circumstances of this case and further proof that Mr Chivers has given an objective opinion and not sought to put forward the lowest possible figure.
  280. It seemed to be suggested by Mr Jones in answer to a question I put to him, that, whatever the circumstances at the valuation date, with a single purchaser or a consortium, the price on the hypothetical sale would still have been £4.8m because that was the figure required by the claimants. They would not have sold for less. I cannot accept this contention. The vendor is assumed to be a willing seller and a sale is assumed to have taken place. It cannot be assumed that the sale only took place at the vendor's figure, however unreasonable. I was referred by Mr Blohm to the Lady Fox case (mentioned earlier) and the Indian case (Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302.) I need not consider Mr Jones's point in detail except to note that it is contrary to the guidance on market value given by Hoffmann LJ in Lady Fox at 186 B-G and by Lord Romer in the Indian case (at 312).
  281. I determine that the compensation payable for the acquisition of the freehold interest in the reference land by Somerset under a purchase notice dated 17 December 1997 is £100,000 (one hundred thousand pounds).
  282. This decision concludes my determination of the substantive issues in this case. It will take effect as a decision when the question of costs has been decided and at that point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and order 61 rule 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions as to the costs of this application and a letter accompanies this decision setting out the procedure for submissions in writing.
  283. DATED: 25 July 2002
    (Signed) P H Clarke
    ADDENDUM
  284. On 25 September 2000 I gave a decision on the preliminary issues with a costs addendum dated 19 October 2000 requiring the claimants to pay the costs of Somerset up to and including the preliminary decision.
  285. I have now received written representations as to the costs of the substantive hearing. On 24 October 2001 Somerset made a sealed offer in an amount greater than my award. I opened this offer on 30 August 2002. The claimants seek an order that Somerset shall pay the claimants' costs incurred between 25 September 2000 and 26 October 2001 (the date of receipt of the offer) and that the claimants shall pay Somerset's costs incurred after that date. In support they refer to section 4 of the Land Compensation Act 1961, Practice Direction 19.3 of this Tribunal and paragraph B-0345 of the Encyclopaedia of Compulsory Purchase and Compensation. Somerset ask for an order that the claimants shall bear their own costs and pay Somerset's costs after the date of the sealed offer. I note that Somerset are not asking for their costs before the offer.
  286. This case is not in reality a compulsory purchase, where an owner sells his land unwillingly to an acquiring authority, but is a sale forced by the claimants on an unwilling authority in an attempt to extract a very large sum of money from the public purse. The attempt to obtain excessive compensation has failed on all issues and I have awarded the figure put forward by Somerset. I can see no reason, in these circumstances, why Somerset should pay any part of the claimants' costs. The result of this reference, wholly in favour of Somerset and not in reality a compulsory purchase, requires the claimants to pay substantially the whole of Somerset's costs.
  287. Accordingly, I order the claimants to bear their own costs and to pay Somerset's costs of the reference from the date of the sealed offer (24 October 2001), such costs, if not agreed, to be the subject of a detailed assessment on the standard basis by the Registrar of the Lands Tribunal. I determine that the substantive hearing was suitable for two counsel.
  288. DATED: 2 September 2002
    (Signed) P H Clarke
    APPENDIX
    VALUATION OF M JONES FRICS FOR CLAIMANTS
    Allocation H 16    
    2.93 ha @ £845,000 £2,475,850  
    Defer 2.5 yrs @ 6%      0.864  
      £2,139,134  
    Less existing use value    750,000  
    Increase due to access £1,389134  
    Share to reference land, 50%        0.5 £694,567
         
    Allocation H 22    
    9.12 ha @ £845,000 £7,706,400  
    Less affordable housing, 5%    385,320  
      £7,321,080  
    Defer 5 yrs @ 6%      0.747  
      £5,468,847  
    Less existing use value     45,071  
    Increase due to access £5,423,776  
    Less risk, 20%  1,084,755  
      £4,339,021  
    Share to reference land, 50%        0.5 £2,169,510
         
    Allocation H 24    
    11.6 ha @ £24,710   £286,636
         
    Tesco    
    1.21 ha @ £2,471,000 £2,989,910  
    Less existing use value  1,022,450  
    Increase due to access £1,967,460  
    Share to reference land, 85%       0.85 £1,672,341
    Value of reference land £4,823,054 £4,823,054
        say £4,800,000


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