Crossrail and the Crichel Down Rules

Surface development at the new Woolwich Crossrail station. Photo Kleon3.

The Crichel Down Rules stem from a great political scandal of the 1950s when the Government of the day failed to honour an undertaking to allow the original owner of land, which it had acquired under compulsory purchase powers for military purposes, to purchase it back once it was surplus to requirements. The affair features heavily in textbooks on politics and public law in that it served to clarify the concept of ministerial responsibility and the type of decision which would require the minister to ‘fall on his sword’ following mistakes or misconduct by civil servants in his department; the case led to the resignation of Sir Thomas Dugdale, the minister of agriculture, who famously told Parliament that

I, as minister, must accept full responsibility for any mistakes and inefficiency of officials in my department, just as, when my officials bring off any successes on my behalf, I take full credit for them. See Hansard HC Deb 20 July 1954, vol 530, col 1186.

On the narrower issue of compulsory purchase powers it led to the ‘Crichel Down’ rules. These sought to establish a fair and transparent procedure for allowing the original owner of land, acquired by a public body under compulsory purchase powers, to buy it back if it becomes surplus to requirements. In short, such a person must be offered ‘first refusal’ on the property before it is offered for sale on the open market. The rules have been at the centre of two recent cases involving Crossrail and the acquisition of land needed to build what has now been officially named as the ‘Elizabeth Line.’ The case focused on the original Crichel Down Rules themselves and a version of them in a policy document produced by Crossrail itself on how such issues should be dealt with  – the C10 Land Disposal Policy.

In the most recent case, R (on the application of) Daniel Charlesworth v Crossrail Limited and another [2019] EWCA Civ 1118 the claimant challenged a decision not to offer him first refusal on a parcel of land which had been acquired by Crossrail in connection with the construction of an underground station at Woolwich and was no longer needed for the project. The property transactions were complicated and what follows is somewhat of an over-simplification. In short, the claimant had a long leasehold interest in a parcel of land which Crossrail needed for the construction of the station. It so happens that the land formed part of a larger parcel of land the freehold of which was owned by the London Development Agency (LDA). Crossrail (which enjoyed extensive compulsory purchase powers under the Crossrail Act 2008) used its powers to obtain the claimant’s leasehold interest of the property in 2010. On 11 February 2011 the LDA sold its freehold interest in the larger parcel of land to a property developer, Berkeley Fifty-Five Ltd (B55),  for £3 million. Just days later, on 15 February 2011, B55 Ltd sold a small part of that land to Transport for London (TfL) (of which Crossrail is a subsidiary) on a voluntary basis for a mere £1. The land in question (which included the claimant’s former premises) was of no value to B55 but was needed by TfL for the construction of the station.

By 2017 the station had been largely completed and, being a subterranean structure, the land on the surface was no longer needed and could be released for development. However, it was now very different to how it had appeared before in that it had been cleared of buildings and the only structure were now two large ventilation shafts.

Now, the Crichel Down Rules stipulate that no one can be offered first refusal if there is more than one competing claim on the land (see rule 15(6)). Here there were two people with a ‘Qualifying Interest’; namely the claimant by dint of his former leasehold interest in the property and B55 by dint of the short time it had enjoyed the freehold of the property. Thus, where more than one person qualifies no-one qualifies! The claimant sought to establish that B55 did not have a qualifying interest because the transaction executed on 15 February 2015 was entirely voluntary and was in no way prompted by the imminent use of compulsory purchase powers. If the claimant succeeded in this argument he would be regarded as the only party with a qualifying interest and would thereby have to be offered first refusal. These arguments focused attention on rule 7 of the Crichel Down rules and section 5 of the C10 Land Disposal Document by which Crossrail sought to give effect to those rules in a slightly modified form. Rule 7 of the Crichel Down Rules provides as follows:-

The Rules apply to all land if it was acquired by or under threat of compulsion. A threat of compulsion will be assumed in the case of a voluntary sale if power to acquire the land compulsorily existed at the time unless the land was publicly or privately offered for sale immediately before the negotiations for acquisition.

Sections 5.2 and 5.3 of the C10 Land Diposal Document (reflecting rule 15(6) of the CDR) provide as follows:-

[5.2] Where only one expression of interest from a former owner or long leaseholder with a Qualifying Interest is made to acquire a site, that person will be given the opportunity to acquire the site at market value within the timescales set. [5.3] If there are competing bids for a site from former owners, it will be disposed of on the open market.

Thus, if the land disposed of by B55 could be construed of has having been ‘acquired by or under threat of compulsion, ‘ B55 would have a competing claim and TfL/Crossrail would be at liberty to sell it on the open market without offering Mr Charlesworth first refusal.

The issue of what constitutes a ‘competing bid’ had been considered in the earlier very similar case of Pritchett v Crossrail Ltd [2017] EWCA Civ 317. The claimant argued in this case that an ‘expression of interest’ did not amount to a competing bid. The Court of Appeal rejected this argument on the grounds that the rules were drafted in such a way that they covered a broad spectrum ranging from serious bids to more tentative approaches.

As regards the case at hand, in an approved judgment delivered by Lewison LJ, the Court of Appeal was at pains to point out that the Crichel Down Rules are a policy and do not have the force of law behind them (at para [2]). Nevertheless, the Court then appeared to proceed on the basis that they were a form of legislation and interpreted them using an approach which is highly redolent of statutory interpretation.

The claimant  struggled to get round the ‘assumption’ that land is acquired by or under of threat of compulsion even where the sale is ostensibly voluntary. Counsel for the claimant argued that TfL and B55 had been in league all along in that B55 was the preferred developer for the site. The transaction had been designed to create two competing interests thereby defeating the claimant’s entitlement to first refusal under the Crichel Down rules. This militated against the notion that the transaction was anything to do with the impending use of compulsory purchase powers in that there was an ulterior motive. As counsel put it,

an assumption of this kind [that the sale was made under threat of compulsion] can be displaced by contrary evidence … The judge was wrong to equate a backcloth of compulsion and a sale made under threat of compulsion. The true reason for B55’s aquisition and (almost) immediate sale to TfL was to protect B55 and to enhance the prospects of its successful redevelopment of Woolwich. (see para [11])

The Court of Appeal was not receptive to these arguments and emphasised the fact that the assumption contained in the Crichel Down Rules was there for pragmatic reasons and the rules would become unwieldy and difficult to apply if one had to enquire too closely into the motives of the parties:-

The reason for the assumption in rule 7 is, to my mind, clear. It avoids the necessity of investigating the internal state of mind of an individual landowner. The investigation of the subjective state of mind of an individual landowner is likely to be partly speculative, since it postulates a hypothetical state of affairs in which the threat of compulsory acquisition is airbrushed out of history. It is also speculative in the sense that it is likely to be based in inferences. Such an investigation is also likely to be burdensome for an acquiring authority to undertake; particularly if the scheme in question affects a large number of landowners … (Lewison LJ at [17]).

The Court of Appeal (at para [12] also commented on an argument that was raised in the claimant’s skeleton argument but not pursued in counsel’s submissions, namely, that there is a difference between an assumption and a ‘deeming provision.’ A deeming provision provides that a certain set of circumstances exists whether or not this reflects the reality of the situation; an assumption, it was argued, does not automatically bring about a certain state of affairs and can be displaced by other factors. The Court felt that the distinction between the two terms was too fine to draw and they had been used interchangeably in the case law.

An argument that the Crichel Down Rules were motivated by fairness and thus should not be applied in a manner which was unfair to the claimant was also rebuffed on the grounds that, “for TfL to disapply the assumption in vague and unspecified circumstances would not be conducive to good administration.” (Lewison LJ at [15]). Moreover, it was wrong to say that the rules had been interpreted in a way which frustrated their underlying purpose. The rules had been designed to allow displaced persons an opportunity to reoccupy their old homes or resume their former businesses or way of life. The nature of the land here had been irrevocably changed and, as noted above, all the old buildings had gone. The claimant was effectively seeking an opportunity to participate in a new commercial venture rather than resuming his former activities. This point had also been made in the Pritchett case in which the claimant’s flat had been demolished to make way for the Crossrail development. As McCombe stated (at para [35]):-

The CD Rules apply to cases where the land in question has not materially changed in character. This policy [the C10 land disposal policy] is designed to include sites which have so changed. It is not necessarily apparent that the policy considerations in the two cases will be identical. The interested parties here were the appellant, who had owned an individual flat, and other parties who had interests in other individual parts of the site. None would be stepping back into a property of the character that he or it had previously owned. They would be getting the opportunity of commercial benefit from a potential new development of the whole site of an entirely different character. This is hardly the situation faced by the former owners of Crichel Down, whole erstwhile property gave rise to the principles now expressed in the CD Rules.

In point of fact the Crichel Down rules do actually specifically refer to a material change in the character of the land as constituting a ground for not offering first refusal to the original owner (see rule 10).

The interpretation of the Crichel Down rules (as applied in the Crossrail land disposal policy) has almost entirely removed any scope for questioning the motives of the parties. The fact that a transaction was conducted against the ‘backdrop’ of compulsory purchase raises and irrefutable assumption that a sale was not voluntary. On the face of it this appears to be a harsh and narrow approach which militates against the notion of fairness which underpin the Crichel Down rules (although, as pointed out above, the rules do in fact contemplate that eventuality). However, as the Court of Appeal pointed out, the rules are a policy which means that there is some scope for adapting them according to the circumstances on the ground. The fact that the land has changed to the extent that it would be impossible for the claimant to resume his former way of life or commercial activities, arguably lessens any unfairness arising from denying him first refusal on the property. Of course, some might argue that the use or threat of use of compulsory powers in the first place may have been unfair. For example, HS2 has been criticised for taking more land than it needs – see, for example, this NFU article. However, that issue is beyond the scope of this particular blog entry.

 

 

 

 

 

 

Ordsall Chord litigation

Work is on the new Ordsall Chord has been continuing apace following the resolution, in the Court of Appeal, of a long running legal dispute regarding the impact of the scheme on a significant part of the country’s railway heritage: see Whitby v Secretary of State for Transport and others [2016] EWCA Civ 444; [2016] J.P.L. 980.

The Ordsall Chord will link together the two main rail routes running through Manchester. For the first time a link will exist between all three of the main stations in Manchester and will enable Manchester Victoria to alleviate some of the pressure on Manchester Piccadilly. In addition it will bring about massive increases in flexibility in terms of services and timetables and provide a vital component of the ‘Northern hub‘ and the longer term project to increase connectivity and efficiency in the region’so railways. At a high political level it forms a cog in the Northern Powerhouse strategy a vital element of which is improvement in connectivity between the great cities of the North.

How the Ordsall Chord fits into the Northern Hub project. Diagram by Crookesmoor

How the Ordsall Chord fits into the Northern Hub project.
Image by Crookesmoor

However, perhaps somewhat ironically, this 21st rail project risks despoiling its own heritage in that it will damage or spoil the setting of a number of grade 1 listed buildings associated with the Liverpool and Manchester Railway. The Liverpool and Manchester was engineered by George Stephenson and was the world’s first purpose built passenger carrying intercity railway. The buildings include the original Liverpool Road Station, the Station Master’s House, various bridges and viaducts, the ‘Power House’ and certain  other buildings. Some of these buildings are occupied by the Museum of Science and Industry (MOSI).

Liverpool Road Station in Manchester. Public Domain.

Liverpool Road Station in Manchester.
Public Domain.

The project was authorized by way of an order made under the Transport And Works Act 1992: the Network Rail (Ordsall Chord) Order 2015 SI 2015/780. This was accompanied by various listed building consents necessary to interfere with the fabric or settings of the aforementioned structures. The ministerial decision set out in the order affirmed the recommendations of the planning inspector who had presided over a public inquiry into the scheme pursuant to procedures under the 1992 Act. The claimant sought judicial review of this decision on the grounds that the Secretary of State had failed to properly balance the benefits of the scheme against its deleterious effects on the heritage of the area. Moreover, he had not given due weight to an alternative proposal, the so-called ‘Option 15’, which would have largely avoided causing harm to the listed buildings. However, it had the disadvantage of cutting through a derelict area known as Middlewood Locks which Salford City Council had earmarked as the site for a major urban regeneration project.The claim was dismissed by the High Court, which could see no reason for impugning the decision of the Secretary of State: see Whitby v Secretary of State for Transport and others [2015] EWHC 2804 (Admin) . The matter was then appealed to the Court of Appeal.

The case hinged upon the correct interpretation of several provisions of the Planning (Listed Buildings and Conservation) Areas Act 1990. In short, these require the Secretary of State to pay special attention to the desirability of preserving buildings, their architectural features and settings both within and without conservation areas. Lindblom LJ agreed with the planning inspector’s findings which had been heavily relied upon by the Secretary of State. In particular, the planning guidance (PPS5) which seeks to flesh out the statutory duties and the planning inspector’s interpretation of it was endorsed. A key aspect of the guidance focuses upon reasonableness and whether ‘there is no other reasonable means of delivering similar public benefits.’ The inspector was right to conclude that, due to its impact on the Middlewood Locks development, it was doubtful whether Option 15 could be regarded as reasonable alternative.

Another important issue raised by the inspector was that Network Rail had already rejected Option 15 and there was no proposal on the table. Furthermore, Network Rail had indicated that it was doubtful whether an Option 15 proposal would be promoted, even if their application was rejected. Whilst Lindblom LJ accepted that this was a relevant consideration he clearly found it less convincing and attached far more weight to the Middlewood Locks issue – see para [50].

Thus, it seems that the possible disruption to modern development trumped damage to heritage:

On a fair reading of paragraphs 873 to 880, in particular paragraphs 875 and 880, he found the harm to regeneration associated with Option 15 sufficient to exclude that alternative as a “reasonable means” of delivering the public benefits of an Ordsall Chord and as an “appropriate alternative site”. Inherent in this conclusion is that the harm to regeneration associated with Option 15 was, in his [the planning inspector’s] view decisively greater than the harm to heritage assets of the highest significance associated with the order scheme. There is, and can be, no challenge to any of these conclusions. They represent an entirely reasonable exercise of planning judgment. And the reasons given for them were perfectly adequate and perfectly clear.

Overall the division shows that, where planning decisions are finely balanced, it can be very difficult to challenge the judgement of the decision maker. As Lindblom LJ put it at para [52], ‘this as a classic case exercise of decision making judgment…’ The test for impugning the judgment of the decision maker in judicial review is very onerous and is based upon irrationality.

However, one aspect of the case that is worthy of note is the fact that, if the application was rejected it might spell the end for the entire scheme because Network Rail had already rejected the Option 15 proposal and had indicated that no alternative proposals would be forthcoming. This raises the issue of whether, where major infrastructure projects upon which many political and economic aspirations are pinned, developers can exert pressure on the decision maker by saying ‘it’s this or nothing’ (although there is nothing to suggest that the promoters consciously pursued such a strategy in this case).  This is a difficult issue and it is interesting to note that, whilst the planning inspector attached some weight to the fact that no alternative proposals may be forthcoming, the Court of Appeal downplayed the issue somewhat and regarded it as a ‘consideration’ but not a ‘critical one’ – see para [50]. Thus, had it not been fore the Middlewood Locks Development, it seems that the matter might have been much more finely balanced.

Noise, horses and the Evergreen 3 project

A Chiltern Railway's service from London Marylebone to Oxford Parkway appears around the new curve at Gavray Junction, Bicester, which allows these trains from Marylebone. The line to the left is the old freight route from Bletchley to Oxford. Since passengers trains ceased on this route in the 1960s many houses have been built in the area so a sound-proof fence is being built to reduce the noise nuisance to the railway's neighbours. Geoff Sheppard

A train from London Marylebone to Oxford Parkway negotiates the new Gavray junction which enables trains to run between Oxford and Marylebone for the first time. Construction of high fencing to reduce noise can be seen.
Photo Geoff Sheppard

The Evergreen 3 Project

The Chiltern Railways Evergreen 3 Project, which will establish the first new intercity mainline rail link since the close of the Victorian era, is now very nearly complete. The project has entailed upgrading large stretches of track and building a new chord linking the Oxford to Bicester line with the mainline between London Marylebone and Birmingham Snow Hill. On 26 October 2015 services commenced between a new Oxford Parkway station, situated four miles from the centre of Oxford at Water Eaton, and London Marylebone. The final link between the main Oxford station and Oxford Parkway is due to open in Spring 2016; this again entails replacing existing track and carrying out other major infrastructure improvements. Moreover, the scheme represents the first link in the East-West Rail project the ultimate aim of which is to reinstate the Varsity Line between Oxford and Cambridge.

By modern standards the project is ambitious, although it has not entailed building much line on virgin territory. In this respect it is not on the scale of its Victorian counterparts or the current HS2 project. Nevertheless, the promoters are perfectly correct to bill it as the first new intercity route since the opening of the Great Central in 1899. In fact, many of the objections raised by individuals and businesses residing along the route would have been very familiar to Victorian railway promoters; a case in point concerns noise and the impact of more rapid and frequent train movements on livestock.

Noise and planning requirements

As noted above, the new route currently terminates short of Oxford at a new ‘Oxford Parkway’ Station. Major track and infrastructure improvements must now be carried out  on this final short section of the new link. The Varsity Line between Oxford and Cambridge was severed in 1967; although it is surprising to note that Beeching’s axe was not actually to blame on this occasion. Since then residents in the suburbs of Oxford lying along the route have become accustomed to no more rail traffic than an infrequent and slow local train to Bicester. The opening of the route between the centre of Oxford and Marylebone will increase this to 74 train movements each day. When the next stage of the East-West Rail Link is completed in 2019, which would enable trains to run as far as Bedford, Rail 784 reports that this will rise to 171 train movements. Thus, it is not surprising that concerns were expressed regarding increased noise and vibration associated with the new rail services.

The project has been authorized by way of a ministerial order made under the Transport and Works Act 1992: see The Chiltern Railways (Bicester to Oxford Improvements) Order 2012 SI 2012/2679. The ministerial decision letter of 17 October 2012 which accompanied the Order added certain conditions to the deemed planning consent granted by the Order. Condition 19 requires noise and vibration mitigation measures to be adopted along the entire route insofar as this is reasonably practicable and necessary. As regards the final section between the main Oxford station and Oxford Parkway, Oxford City Council must satisfy itself that the promoters’ plans satisfy this requirement before approving the works. Network Rail (which is now the lead promoter having taken over from Chiltern Railways) submitted its noise mitigation proposals to the Council’s Planning Committee in early December following a public consultation demanded by condition 19. The noise mitigation measures mainly consist of the erection of 2.5m high fencing where the tracks run past housing. Having undertaken much research Network Rail maintain that the vibration will not be sufficient to merit additional measures. Modern track technology and trains means that vibration is now far less of an issue than it once was.

Nevertheless, the proposals may not be enough to assuage public concerns regarding the impact of the scheme on residents along the route. The proposals have already generated a large number of comments, many of which challenge the assertion that a 2.5m fence will be sufficient. Alternative suggestions  include higher fencing, speed restrictions and even the use of Tata ‘silent track.’ Further along the line towards Bicester, on the section that is already open, the proprietors of Wendlebury Gate Stables have fought a long battle with the promoters of the scheme regarding the adequacy of noise abatement measures where the line runs alongside their riding school. They argue that the noise problem is especially acute at that location because it  makes it difficult for riding instructors to make themselves heard during lessons and because of the susceptibility of horses to noise and sudden movements. These arguments were forcefully made during the public inquiry into the scheme which was held pursuant to procedures under the Transport and Works Act: see document OBJ/238/8. The Secretary of State agreed that noise mitigation must be undertaken at that location and Wendlebury Stables are specifically mentioned in condition 19. Nevertheless, arguments continued regarding the adequacy of the proposed fencing.

From the above it is clear that, although noise features prominently in the planning process and a myriad of detailed consultants reports have been produced, there can be no guarantee that the noise issue will be resolved to the satisfaction of all affected parties. This begs the question of whether any legal avenues may remain open once all planning consents have been granted and the line is in full scale operation.

Statutory Authority

Anyone contemplating an action in public or private nuisance with a view to gaining an injunction or damages, once the line is in full scale operation, would immediately run into the statutory authority defence. In short, railway operators are immune from liability in nuisance in respect of harms which are the inevitable consequence of exercising their statutory powers and duties. This was established by the very early railway case of R v Pease (1832) 4 B & Ad 30, 110 ER 366  which concerned the spooking of horses on the Yarm turnpike by steam engines grinding along the Stockton and Darlington Railway. The solicitor to the Stockton and Darlington Railway, Francis Mewburn, had had the foresight to insert a provision into the private Bill under which the scheme was authorized which specifically enabled the railway company to use steam locomotion. The Court of Kings Bench held that Parliament must have foreseen that travellers on the turnpike would be incommoded by the locomotives and deemed this to be a reasonable price to pay for the benefits of the technology. The importance of Mewburn’s clause was immediately apparent and brought about the adoption of section 86 of the Railway Clauses (Consolidation) Act 1848 which sought to standardise clauses used in the dozens of private Bills which came before Parliament at the height of the railway revolution. Section 86 established a defence of statutory authority and played a significant role in limiting the liability of railway companies for fires caused by stray sparks and burning embers emitted by steam locomotives. The case law did, however, bring about one important qualification in that the defendant would have to show that the harm was the inevitable result of exercising the statutory power.  This led to very lengthy and technical arguments about whether the railway companies has used the most appropriate technological means of reducing the emission of sparks. Given that the railway companies monopolised large proportion of the railway engineering expertise. It was very difficult for plaintiffs to challenge their assertions regarding what constituted the appropriate engineering solution.

As regards 21st century projects it is interesting to note that the HS2 Bill expressly incorporates section 86 of the Railway Clauses (Consolidation) Act 1848. More generally, section 122 of the Railways Act 1993 established a defence of statutory authority in respect of nuisances caused by trains operating on the national rail network. Given that the Evergreen 3 project forms part of the national rail network the fact that section 122 will come into play is beyond doubt. The courts have never had the opportunity to fully consider the scope of this section but it seems likely that it comes equipped with existing common law baggage. In this respect it may leave open the possibility of arguing that the harm was not inevitable. However, as regards Evergreen 3 and the completion of the Oxford to Oxford Parkway section, by the time that Oxford City Council gives its assent to the noise mitigation plans demanded by condition 19, the suitability of the proposed measures will have been very thoroughly investigated. A litigant would face an uphill struggle in terms of persuading the courts that the planning process had got it wrong. Added to which is the fact that any modern interpretation of the statutory defence is likely to incorporate cost considerations.

Conclusions

Until a new line is put into full scale operation one cannot ascertain whether all adverse consequences have been foreseen by the planning process. If one views the common law as a means of fine-tuning the planning process rather than as a mechanism for correcting ‘regulatory failure’, it is possible that the courts would be more receptive to augments that a nuisance at a particular location is not inevitable. As regards Evergreen 3 and the final link to Oxford centre, it is notable that Network Rail has already considered the judicious use of Tata silent track at locations particularly susceptible to nose such as Wolvercote Junction (see Oxford Mail). It is not beyond the realms of possibility that a court could be persuaded that more use should have been made of this system if the noise is worse and more widespread than originally contemplated when the line is put into operation. Having said that, it is one thing to install special track at the construction stage, it would be quite another to rip up new track and install it after litigation. In such circumstances it is still likely that cost would rear its ugly head as a decisive factor. There may be more scope for challenging the use made of less sophisticated noise abatement measures such as the height of fencing at riding schools.

 

 

Judicial Review Challenge Against Radlett Railfreight Interchange Rejected

A decision by the Secretary of State for Communities and Local Government  to authorise the construction of a new rail freight interchange at Radlett near St Albans has survived a challenge by way of judicial review: St Albans City and District Council v Secretary of State for Communities and Local Government [2015] EWHC 655. In short, the case centred on whether the planning inspector and Secretary of State had fettered their discretion by treating criteria established by an earlier unsuccessful application in respect of the same development as a legal test. St. Albans City and District Council, which has resisted the development throughout, applied to have the decision quashed.

The saga of the St Albans freight interchange dates back to 2006 when the developer, Helioslough, submitted its first planning application. The development entailed building on green belt land and encountered much local opposition. Moreover, it engaged the National Planning Policy Framework, paragraph 89 of which provides that inappropriate development which could harm the green belt must be avoided unless there are very special circumstances. The planning authority rejected the application and the developer appealed triggering a planning inquiry by a planning inspector. In his report the inspector stated that the need for such strategic rail infrastructure could constitute a very special circumstance provided that there were no suitable alternative sites. However, in this case the inspector concluded that there had not been a sufficiently thorough inspect of over sites less harmful to the green belt and recommended that the application should be rejected. The Secretary of State accepted this recommendation.

The developer submitted a second application which was again rejected by the local authority. Once again the developer appealed against the decision.This time the Secretary of State accepted the inspector’s recommendation to the effect that planning permission should be granted because this time there had been a thorough investigation of other sites and that there were no suitable alternatives.

The local authority sought judicial review of this decision on the grounds that the criteria set out in the inspector’s report relating to the first application, to the effect that the strategic need for such infrastructure could justify green belt development if no suitable alternative sites could be found, was treated as a legal test in the second appeal. Thus, those determining the appeal had fettered their discretion in the sense that a finding that no suitable alternative sites existed would lead to the inevitable conclusion that the development should be allowed.

There was a second ground of review which focused on the fact that the Secretary of State had earlier refused to grant consent for the construction of a waste management facility on a greenfield site four miles away. It was argued that the decision to authorise the rail freight interchange was inconsistent with this earlier decision against allowing industrial development on a nearby greenfield site.

The High Court rejected the application to quash the decision in favour of authorising the development on the grounds that the planning inspector and Secretary of State had not regarded the criteria as a legal test. Where there has already been a thorough consideration of the issues the decision maker is entitled, as a matter of judgement, to regard the findings as persuasive. It does not follow that such findings are being applied as legal tests. The case of Kings Cross Railway Lands Group v Camden LBC [2007] EWHC 1515 was applied in this respect.

The second argument, pertaining to the inconsistency with the earlier decision not to allow the building of a waste incinerator, was rejected on the grounds that they were very different projects which raised very different considerations.

A curious tale of pressure relief shafts and compensation

Northbound Virgin Trains Pendalino heading north leaving Stowe Hill tunnel of the West Coast Main Line south of Weedon Northamptonshire at about 125mph. Wikimedia commons: Cj1340

Northbound Virgin Trains Pendalino heading north leaving Stowe Hill tunnel of the West Coast Main Line south of Weedon Northamptonshire at about 125mph.
Wikimedia commons: Cj1340

 

West Coast Mainline Modernization Programme 

The modernisation of the West Coast mainline cost £9 billion and was intended to facilitate significant increases in train speeds. There were high hopes for the project at the outset including ambitious plans to run trains at up to 140 mph. The project has undoubtedly delivered significant improvements but it has also served to illustrate the limits of how far you can go in terms of upgrading Victorian infrastructure. It has not proved possible to attain this speed for the purposes of everyday operating; a major factor has been the failure to develop a viable signalling system. Rather than providing an alternative to investment in brand new high speed railways, the project has served to illustrate the necessity for HS2.

 

This is the background to a curious dispute recently considered by the Lands Tribunal concerning appropriate levels of compensation payable under compulsory purchase powers:-

Miller v Network Rail Infrastructure Ltd [2014] UKUT 0264 (LC)

 

Pressure Relief Shafts

The claimant owns farmland in Northamptonshire under which the West Coast mainline passes through Stowe Hill Tunnel. In 2001 he entered onto a licence agreement with Railtrack plc (predecessors of Network Rail Infrastructure Ltd (hereinafter NRIL) to facilitate the construction of a pressure relief shaft. Increasing train speeds in tunnels exacerbates the ‘piston effect’ by which air in front of the train is compressed and forced along the tunnel under pressure. Aside from impairing the performance of the train the pressure can also cause aural discomfort to passengers. Pressure relief shafts dissperpate the pressure at various points along the tunnel; Stowe Hill Tunnel required the construction of four such shafts.

 

 

Compulsory Purchase

Some time later, and after the shaft had been built, Network Rail used its compulsory purchase powers under the Transport and Works Act 1992 to acquire ownership of the site and to secure an access route for maintenance: Network Rail (West Coast Main Line) (Stowe Hill)  Order SI 2006/3471 (hereinafter the 2006 Order). At this point it should be noted that, prior to entering into the afore-mentioned licence agreement with the claimant, NRIL had contemplated using its compulsory purchase powers under the Network Rail (West Coast Main Line) Order SI 2003/1075. This is the main instrument authorizing works pertaining to the West Coast Main Line Modernization Programme as a whole and contains general powers to that end.  The claimant was dissatisfied with the compensation received and appealed to the Lands Tribunal. The claimant represented himself but managed to formulate some legal arguments which, although somewhat tenuous, required a degree of effort and thought to refute.

 

The Claimant’s Arguments

Pointe Gourde

Where land is subject to a compulsory purchaser order, the owner is only entitled to compensation which reflects its normal market value. In many cases this value may not be particularly great as there may be no demand for the property on the open market. An obvious example would be an isolated patch of agricultural land which, in the ordinary course of events, could not be used for anything else. However, the land may be highly sought after by an undertaking wishing to acquire it for a specific project. A fundamental principle of the law relating to compulsory acquisition is that the value of the land cannot be inflated so as to reflect the purchaser’s special interest in it. This is provided that the land has absolutely no benefit or value to the purchaser other than its use in the scheme for which compulsory purchase is being sought. The principles finds expression in section 5(3) of the Land Compensation Act 1961:-

“The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the requirements of any authority possessing compulsory purchase powers.”

The concept is also enshrined in the famous  Pointe Gourde principle after the eponymous case of Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands (1947) AC 565

The claimant constructed a somewhat inventive legal argument in an attempt to circumvent the principle in this case and establish an alternative basis for calculating compensation. His argument started on the premise that the acquisition of his land had been tinged by fraud from the outset. NRIL had never had any serious intention of running trains at 140mph and the acquisition of the land was not necessary for the completion of the project. He claimed that this amounted to fraudulent misrepresentation and the only reason he had agreed to the original licence agreement was to stave off the threat of the use of compulsory purchase powers. As such the construction of the shaft on his land amounted to a breach of his human rights and in particular article 1 paragraph 1 on the right to property. Had Network Rail not subsequently used its compulsory purchase powers to acquire the land outright he would have been in a position to seek an order requiring the removal of the shaft. NRIL’s true purpose in acquiring the land was to avoid the colossal expense which would have resulted from the granting of such an order. Thus, given that NRIL did not actually need the land for the stated purpose of maintaining the shaft built pursuant to the earlier agreement, the Point Gourde principle could not apply. The land had some value to NRIL which was outside the narrow purpose for which the compulsory purchase powers had been sought. The ‘motive’ of NRIL in securing the land to avoid such an outcome should be used as the basis for calculating the value of the land from the perspective of NRIL.

Injurious Affection

There was also much argument relating to the extent to which compensation for ‘injurious affection’ was payable under the 2006 order. Such loss results form the harm caused to surrounding land caused by the alienation of the land in question; the disruption caused by the building work; and nuisance type problems which may result from using the infrastructure in the years to come. The 2006 order was purely designed to secure access to the site for the purpose of maintaining the shaft and did not make express reference to injurious affection. As noted above, at one point there had been plans to use compulsory purchase powers under the 2003 order (which contained general powers relating to the west coast mainline modernization programme as a whole) to facilitate the construction of the shaft; this does refer to injurious affection. However, in the event the powers under the 2003 order were not used and the shaft was constructed pursuant to the afore-mentioned licence agreement. Nevertheless, the claimant argued that the two orders were inextricably connected and that the 2006 order was in effect the implimention of a decision deferred from 2003 when the use of compulsory purchase powers was originally contemplated. As such the two measures should be read together and the requirement to pay compensation for injurious affection should be regarded as having been absorbed by the 2006 order.

 

The Tribunal’s Findings

AJ Trott FRICS, sitting in the Upper Tribunal (Lands Chamber), firmly rejected the claimant’s assertion that the process had in any way been tainted by fraud on the part of NRIL. Indeed, the claimant was very heavily criticised for making this assertion:-

‘Mr Miller has a grievance about the way in which NRIL obtained its compulsory purchase powers. He feels misled and misinformed and thinks that NRIL has acted fraudulently (a word he used more than once). That is a serious allegation as Mr Honey pointed out. It is not one that should be made without the strongest evidence even by a litigant in person. The allegations were made generally against NRIL rather than against specific individuals and focused upon NRIL’s case for the operational necessity for the pressure relief shaft. But Mr Miller produced no evidence to support his allegations and, in my opinion, they are unfounded and his grievance is imaginary.’

(para [85])

The absence of fraud meant that the claimant’s somewhat tenuous arguments relating to the need for the shafts quickly unravelled. The evidence showed that there had been realistic plans to increase train speeds and that the location of pressure relief shafts was dictated by engineering considerations. The land had no value to Network Rail other than as a pressure relief shaft; thus it’s value could not be inflated to reflect its special value to Network Rail. Moroeover, the ambition of running trains at 140 mph in the long term had not been entirely abandonned and NRIL were still working towards resolving the signalling difficulties. In this respect the purchase clearly fell within the scope of section 5(3) of the Land Compensation Act 1961 and there was no need for detailed consideration of the Pointe Gourde principle.

In any case, even if it could be shown that Network Rail did not need the land for use as a pressure relief shaft and other factors could be taken into account in valuing the land, there was no existing legal principle which could be used to justify taking the purchaser’s motive into account when determining compensation.

As noted above, the claimant also argued that the compulsory purchase order should have been regarded as having been made under the 2003 Order in that the 2006 Order was merely a defferal of the decision to make a compulsory purchase under the 2003 Order. The reason why the claimant wished to bring the 2003 Order into play was that it was more generous in terms of allowing for compensation in respect of injurious affection. The Tribunal rejected the argument that the 2006 Order should be regarded as part and parcel of the 2003 Order; notwithstanding for the fact that Article 10 of the 2006 Order imported certain aspects of the 2003 Order. Thus, compensation for injurious affection caused by the building works was not recoverable. In any case, this had been reflected in monies payable under the original licencing agreement. However, the claimant did win one small victory relating to noise nuisance. Part of the reason for obtaining ownership of the land under the 2006 Order was to secure the continued use of the pressure relief shaft. Given that train noise is a function of using the tunnel it was possible to argue that the 2006 Order has been intended to facilitate compenstaion in respect of this type of continuing harm:-

‘The significance of the dispute between the parties on this issue appears to be whether or not the claimant can, when claiming for injurious affection, have regard to train noise. That is a matter for evidence and submissions at a substantive hearing but, the parties having raised the point, I would make a provisional comment. The claimant may claim compensation for injurious affection caused by the use (but not the construction) of the pressure relief shaft. The use of the pressure relief shaft is a function of the movement of the trains in the tunnel. Its purpose is to allow the movement and release of air that is compressed by the trains. It is arguable that the airborne transmission of train noise through the pressure relief shaft is a concomitant of the use of the shaft for which a claim for compensation for injurious affection can, at least in principle, be made.’ (Para [94](iii)).

As the above extract indicates, this issue will have to be resolved at a future hearing.

 

Conclusions

The Lands Tribunal categorically rejected any suggestion that NRIL had acted in anything other than a fully above board and honest manner. Compensation was paid strictly in accordance with the legal framework establishined by the relevant legislation. Nevertheless, the claimant was clearly dissatisfied with the settlement and, despite his apparrent lack of legal training, felt compelled to explore the darkest recesses of the law relating to compulsory purchase in an attempt to find an alternative basis for assessing his claim.

I offer no opinion as the adequacy of compensation paid in this case and do not question the findings of the Lands Tribunal on the application of the relevant law. However, it is worth drawing attention to a contunuing wider debate regarding the adequacy of compensation payments made to landowners pursuant to compulsory purchase orders. For example, the Country Land Owner’s Association (CLA) argues that market value is not a fair measure of compensation. The forced and unplanned nature of the sale means that the landowner is subjected to additional stresses, inconveniences and hidden expenses which are not associated with a normal sale. They have argued in favour of increasing the levels of compensation to 30% above normal market value in order to reflect the forced nature of the sale. See:-

CLA, ‘Fair Play: CLA Vision for Reform of the Compulsory Purchase System’ (2012)

As regards HS2 in April 2014 it was announced that a revised compensation package was being implemented. This will offer property owners 110% of the un-blighted market value of the property with a minimum payment of £30,000 and a cap of £100,000:-

See HS2 April 2014 Announcement

It is doubtful that this will assuage the CLA and similar groups although it is more generous than what was on offer before. In any case, it is doubtful that these market value based approaches would address the frustrations faced by farmers, such as Mr Miller, who lose awkward and isolated plots of land. As noted above, the market value of these isolated plots, alienated from the surrounding land of which they form a part, is very low to start with and it is doubtful whether even an uplift of 30% would make any practical difference. The inconvenience stems from making the land more awkward to farm. However, to some extent compulsory purchase has to follow a ‘one size fits all approach’ if it is not to collapse under the weight of its own complexity. Where a development causes specific access difficulties, such as severing land, provision needs to be made for underpasses and bridges and so forth. It is more difficult to factor in the additional cost and time of ploughing, sowing and harvesting around a new piece of infrastructure sitting in the middle of a hitherto uninterrupted field.