(1) Lawrence Riva v BAA Limited and Another
(2) Capitol Investments (Scotland) Limited v BAA Limited and Another

Introduction and Summary

[1] These are two references of objections to, in each case, two blight notices served by the applicants under Part V, Chapter II, of the Town and Country Planning (Scotland) Act 1997 (“the Act”). The blight notices were served in January 2012 on BAA Limited, the first respondents and Edinburgh Airport Limited, the second respondents. The Tribunal heard legal debate on preliminary pleas by the first respondents to the effect that their objections to the blight notices should be upheld because (apart from issues on the merits) they were not the appropriate party against whom to seek the statutory remedies for the planning blight claimed. It was a matter of agreement that the first respondents “sold” the airport around May 2012 (more accurately, we were told, transferred their 100% shareholding in Edinburgh Airport Limited to, apparently, a subsidiary company of the purchaser).

[2] Broadly, the first argument for the first respondents was to the effect that, regardless of the sale, they had not been the ‘relevant airport operators’ or the ‘appropriate authority’; and the second, esto, argument was that, in any event, the material date for the purpose of this preliminary issue was the date of the Tribunal’s decision, with the result that they are now no longer the appropriate party.

[3] The Tribunal has decided as follows:-

(i) We are unable at this stage to uphold the first respondents’ primary argument, because it depends on their establishment of factual circumstances which we cannot at this stage accept as having been established;

(ii) However, we uphold the esto submission that the material date in determining these particular issues in this case is the date on which the Tribunal has to decide the issue and accordingly, since there was no dispute that these respondents have in fact sold the airport and cannot any longer be regarded as operators of the airport, their objection should be upheld at this stage.

Accordingly, we have dismissed both references insofar as directed against the first respondents. The references will proceed as against the second respondents who, while advancing substantial arguments in support of their objections on the merits of this matter, have all along accepted that they were the “appropriate authority” against whom any proceedings should be directed.

The Statutory Provisions

[4] The principal provisions of Part V, Chapter II, of the Act referred to may be summarised as follows (it is not necessary for these purposes to take specific note of subsequent amendments, in particular the changes in the development plan provisions introduced by the Planning, etc. (Scotland) Act 2006).

[5] A party with a qualifying interest in ‘blighted land’ and who has made reasonable endeavours to sell but been unable to do so except at a much reduced price may serve a blight notice on the ‘appropriate authority’ (Section 101), who may in turn serve a counter-notice claiming one or more of seven grounds of objection (Section 102). The claimant may require the objection to be referred to the Tribunal (Section 104)

[6] The various circumstances in which land is “blighted” are set out in Schedule 14, which now provides:-

“1. (1) This paragraph applies to land indicated in a strategic development plan in force for the area in which it is situated either-

(a) as land which may be required for the purposes-

(i) of the functions of a government department, local authority or statutory undertaker, or

(ii) of the provision by an electronic communications operator …

“2. (1) This paragraph applies to land which-

(a) is allocated for the purposes of any such functions as are mentioned in paragraph 1(1)(a)(i) or (ii) by a local development plan in force, or

(b) is land defined in such a plan as the site of proposed development for the purposes of any such functions.

(2) In sub-paragraph (1), the reference to a local development plan in force includes a reference to a proposed local development plan which has been submitted to the Scottish Ministers under Section 18(3)(b) or 19A(5)(b)(ii).”

“3. This paragraph applies to land indicated in a plan (other than a development plan) approved by a resolution passed by a planning authority for the purpose of the exercise of their powers under Part III as land which may be required for the purposes of any functions of a government department, local authority or statutory undertakers.

“4. This paragraph applies to land in respect of which a planning authority-

(a) have resolved to take action to safeguard it for development for the purposes of any such functions as are mentioned in paragraph 3, or

(b) have been directed by the Secretary of State to restrict the grant of planning permission in order to safeguard it for such development.

… ”

[7] Section 102(2) provides:-

“(2) A counter-notice under subsection (1) may be served at any time before the end of a period of 2 months beginning with the date of service of the blight notice.”

[8] Section 105(2) provides that where an objection in a counter-notice is not upheld by the Tribunal:-

“(2) … the appropriate authority shall be deemed –

(a) to be authorised to acquire compulsorily under the appropriate enactment the interest of the claimant in the hereditament …, and

(b) to have served a notice to treat in respect of it … ”

[9] Section 120 provides:-

“(1) Subject to the following provisions of this section, in this Chapter “the appropriate authority”, in relation to any land, means the government department, local authority or other body or person by whom, in accordance with the circumstances by virtue of which the land falls within any paragraph of Schedule 14 …

“(3) If any question arises as to which authority is the appropriate authority for the purposes of this Chapter-

(a) Section 102(2) shall have effect as if the reference to the date of service of the blight notice were a reference to that date or, if it is later, the date on which that question is determined … ”

[10] Section 121 provides:-

“(1) Subject to the following provisions of this section, in this Chapter “the appropriate enactment”, in relation to land falling within any paragraph of Schedule 14, means the enactment which provides for the compulsory acquisition of land as being land falling within that paragraph.

“(2) In relation to land falling within paragraph 2 of that Schedule, an enactment shall for the purposes of subsection (1) be taken to be an enactment which provides for the compulsory acquisition of land as being land falling within that paragraph if-

(a) the enactment provides for the compulsory acquisition of land for the purposes of the functions which are indicated in the development plan as being the functions for the purposes of which the land is allocated or is proposed to be developed, or

(b) where no particular functions are so indicated in the development plan, the enactment provides for the compulsory acquisition of land for the purposes of any of the functions of the government, local authority or other body for the purposes of whose functions the land is allocated or is defined as the site of the proposed development.

“(3) In relation to land falling within paragraph 2 of that Schedule by virtue of paragraph 2(2), “the appropriate enactment” shall be determined in accordance with subsection (2) as if references in that subsection to the development plan were references to any such plan, proposal or modifications as are mentioned in paragraph 2(2)(a),(b) or (c).”

[11] Section 214 provides:-

“(1) Subject to the following provisions of this section, in this Act “statutory undertakers” means persons authorised by any enactment to carry on any railway, light railway, tramway, road transport, water transport, canal, inland navigation, dock, harbour, pier or lighthouse undertaking or any undertaking for the supply of hydraulic power or water and a relevant airport operator (within the meaning of Part V of the Airports Act 1986).

… ”

[12] Section 57 of the Airports Act 1986 provides:-

“(1) Subject to subsection (3), this Part” [Part V] “applies to-

(a) any airport in respect of which a permission to levy airport charges is in force under Part IV, or in respect of which there subsists a pending application for such a permission made in accordance with section 38, other than an airport excluded by virtue of subsection (2)

“(4) In this Part “relevant airport operator” means the airport operator in the case of an airport to which this Part applies.”

[13] Section 82 (1) of the Airports Act 1986 provides:-

“(1) In this Act-

“airport operator means the person for the time being having the management of an airport, or, in relation to a particular airport, the management of that airport

… ”

Procedure

[14] Blight notices were served by each of the applicants, Capitol Investments Scotland Limited and Lawrence Riva, as, respectively, heritable proprietors and tenants, of heritable property in the vicinity of Edinburgh Airport, on each of the respondents on 4 January 2012. Reliance was placed on paragraphs 2, 3 and 4 of Schedule 14 of the Act. Counter-Notices under Section 102(4), objecting on grounds (a) (no part of the hereditament in “blighted land”) , (b) (appropriate authority does not propose to acquire any … ), (f) and (g), were served on 1 March 2012, by the same agents, Pinsent Mason, Solicitors, Glasgow, for both respondents. The Counter-Notice served on behalf of the first respondents included the claim that they were not the appropriate authority. The applicants required the objections to be referred to the Tribunal. Following the sale of the airport, the first respondents were separately represented by Brodies, Solicitors, Glasgow.

[15] Pleadings in the references took the form of the applicants’ Blight Notices, with certain adjustments, and the respondents’ separate Answers, also adjusted. The Answers on behalf of the first respondents included the following pleas-in-law which were the subject of this legal debate:-

“2. The land that includes the hereditament not falling within any one or more of paragraphs 2, 3 and 4 of Schedule 14 of the Act of 1997 insofar as the First Respondent is concerned due to the sale by it of Edinburgh Airport, that land is not “blighted land” in terms of Section 100(1) of the Act of 1997 and the First Respondent’s objection in terms of Section 102(4)(a) of the 1997 Act should be upheld.

“3. The First Respondent not being an appropriate authority, it cannot compulsorily purchase the land including the hereditament in terms of section 105(2) of the Act of 1997 and the Application should be dismissed.

“4. The First respondent not having relevant powers that it could exercise to compulsorily purchase the land which includes the hereditament, the objection in terms of section 102(4)(b) of the Act of 1997 should be upheld.”

[16] At the hearing, the first respondents were represented by Mr Farrell, solicitor, of Brodies. The applicant Mr Riva (although he had had the assistance of solicitors in preparing the pleadings) represented himself and, with the Tribunal’s permission in terms of Rule 16 of the Lands Tribunal for Scotland Rules 2003, Capitol Investments Scotland Limited. There being no material distinction between the two references, at least in relation to matters canvassed at this stage, they were considered together.

[17] Mr Farrell sought to rely on an inventory of four productions (of which no intimation had been given) relating to ownership of Edinburgh Airport, Civil Airport Authority licensing and Annual Returns indicating shareholdings and share transfers in Edinburgh Airport Limited. Mr Riva indicated that he accepted (as was averred in the first respondents’ Answers) that the first respondent sold Edinburgh Airport on or around 31 May 2012 and thus ceased to be the operator of Edinburgh Airport, but objected to the introduction at this stage of productions of which he had no prior notice. After discussion, Mr Farrell proceeded to make his submissions without specific reference to these productions.

[18] Mr Farrell informed the Tribunal that the first respondents’ name had been changed to ‘Heathrow Airport Holdings Limited’.

Authority Referred to:-

Mancini v Coventry City Council (1985) 49 P. & C. R. 127 (Court of Appeal)

Submissions

[19] Mr Farrell made clear that despite the lack of specification in the applicants’ pleadings, he was not moving for dismissal of the references on that ground. He addressed the Tribunal in three chapters:-

(i) Mr Farrell made certain statements about the factual background to the first respondents’ interest in Edinburgh Airport Limited. The latter company, he said, held the registered title to the airport property. They had held the airport licence since 2005. The previous airport owner, Scottish Airports, had transferred the whole shares in Edinburgh Airport Limited to another subsidiary of the first respondents in 2007, when the first respondents acquired the airport. That company had retained ownership of the shares until 1 June 2012, when they had been transferred to Green Bidco Limited, which was apparently a subsidiary company of the airport’s purchasers, Global Infrastructure Partners. The first respondents had never held shares in Edinburgh Airport Limited.

(ii) Mr Farrell submitted that the first respondents were not the ‘appropriate authority’ within the meaning of Section 120(1) of the Act when the blight notices were served. Not being a government department or local authority, they could only become the ‘appropriate authority’ if Schedule 14 applied to them. The applicants relied on Paragraphs 2, 3 and 4 of Schedule 14, each of which referred back to Paragraph 1(1)(a) so that, in order to fall within Paragraphs 2,3 or 4, the first respondents (again, not being a government department or local authority) would require to fall within the definition, in Section 214, of ‘statutory undertakers’. They could only fall within that definition as ‘a relevant airport operator’. Referring to Sections 57 and 82 of the Airports Act, Mr Farrell acknowledged that (contrary to the position which had been advanced in these respondents’ Answers) Edinburgh Airport was not excluded under Section 57(2)(a) as “owned by the BAA”. However, the first respondents did not fall within the definition of ‘airport operator’ within the meaning of Section 82(1) of the Airports Act, because Edinburgh Airport Limited were the person having management of the airport, having regard also to the provisions in the Airports Act in relation to permission to levy airport charges. Edinburgh Airport Limited had the title, the licence and its own staff, management, etc., and was completely independent. In those respects, nothing had changed. Even before the sale, contrary to the averment in the Blight Notices as adjusted, the first respondents, not being the ‘relevant airport operator’, could not have authority under Section 59 of the Airports Act to acquire land compulsorily. Accordingly, the Tribunal could not, under Section 102(2) and (5), authorise the first respondents, or deem them to be authorised, ‘under the appropriate enactment’, i.e. the Airports Act. In answer to a question by the Tribunal, Mr Farrell said that if that reference to ‘the appropriate enactment’ had merely been a reference to general legislation about compulsory purchase procedure, it would have said so. The first respondents never had managed Edinburgh Airport, could not be a ‘relevant airport operator’, could not be a ‘statutory undertaker’ for the purposes of the paragraphs in Schedule 14 of the 1997 Act and accordingly could not be an ‘appropriate authority’.

(iii) Finally, Mr Farrell submitted in the alternative that, esto the first respondents had been ‘the appropriate authority’, that could not be said now that they no longer had any interest in the airport. Contrary to the applicants’ submission that the relevant date for the purposes of determining whether a party was ‘the appropriate authority’ was the date of service of the blight notices (or, perhaps, of the Counter-Notices) the relevant date was the date of the Tribunal’s decision, for four reasons:-

1. The definition of ‘appropriate authority’ in Section 120 was forward-looking – by whom the land was liable to be acquired in the future; not, who blighted the land, but which party is to acquire it. The statutory scheme was not about compensation for past blight. Reference was also made to the ‘associated company’ provision in Section 82(4) of the Airports Act, demonstrating the different statuses of the companies.

2. Section 120(3)(a) provided that the two month period in Section 102(2) began only when the question who was the appropriate authority was determined. This did not prejudice the applicants, who had in any event served notices on the appropriate authority. The whole structure of the provisions related to only one appropriate authority.

3. In terms of Section 105(2)(a) the Tribunal would order “the appropriate authority” to acquire.

4. The decision in Mancini v Coventry City Council, and in particular dicta by Purchas LJ at pages 135 and 141, supported the possibility of looking at this matter as at the date of the Tribunals’ consideration, and also the forward-looking nature of the provisions.

[20] Answering these submissions, Mr Riva explained that the blight notices arose out of the inclusion of the land in a B.A.A. Masterplan and subsequent documents. The waters had been muddied during his dealings with the respondents, all of which had seemingly been handled by the first respondents. It had not been possible to decide who was the appropriate authority. It had been felt sensible, and remained sensible, to proceed against both companies. The first respondents, as well as Edinburgh Airport Limited, were the appropriate authority at the date of the blight notice. Under reference to Sections 120(3)(a) and 102(2), the appropriate date in relation to determining who was the appropriate authority appeared to be the date of service of the blight notices. The crux of the issue was who were the ‘statutory undertakers’, which brought one back to the B.A.A. Masterplan, correspondence from , e.g., Edinburgh District Council and so on. At the date of the blight notices, the first respondents, although they had known for months in advance that they would be selling the airport, appeared to be accepting that there had been no alteration to the terms of their plans. Mr Riva also referred to Section 121(3), in which the reference to ‘development plans’ took one back to the actions of the first respondents. Finally, Mr Riva said that while he understood the sense in pursuing one body, he was not totally convinced, because it was, as he put it, an ‘engineered situation’.

[21] In a brief reply, Mr Farrell pointed out that the first respondents had been forced to sell the airport. He acknowledged that his earlier submissions had not taken account of section 121, in relation to “appropriate enactment”, but, he said, section 121(1) supported his position. It was clear (and also from the blight notices) that there must be reliance on the authority conferred by the Airports Act: there had to be an ‘appropriate authority’ which had compulsory purchase powers.

Tribunal’s Consideration

[22] On the basis of the facts asserted by Mr Farrell in relation to the position of Edinburgh Airport Limited, his first submission, to the effect that the first respondents were not, even when the claim of blight was made, the appropriate party against whom to make the claim, would appear to be correct. That conclusion can be reached by asking which company was the ‘statutory undertaker’ for the purposes of Paragraph 1(1)(a)(i) of Schedule 14 of the Act as a necessary first step in considering whether any of Paragraphs 2, 3 or 4 could be satisfied so as to establish one of the essential requirements of the blight provisions, viz. that the land in which the claimants had or have a qualifying interest was or is ‘blighted land’. On the facts asserted to us, Edinburgh Airport Limited would be the ‘relevant airport operators’ within the meaning of Part V of the Airports Act and therefore the ‘statutory undertakers’, for the reasons advanced by Mr Farrell, and the first respondents could not fall within that definition. Notwithstanding Mr Riva’s understandable view that he has been concerned with the position of the first respondents, they could not therefore be the “appropriate authority”.Their first objection, under Section 102(4)(a) of the Act, to the service of the blight notices on them would fall to be upheld.

[23] However, the essential facts in relation to the status of Edinburgh Airport Limited, excluding the possibility of the first respondents being the ‘appropriate authority’, had not been averred in the first respondents’ Answers. Mr Farrell had brought documents along to the hearing in order to vouch his assertions. Mr Riva clearly feels that over the years he has been given the impression that the plans on which the applicants found in their assertion of ‘planning blight’ were the first respondents’ plans. He told us that he had not been able to get to the bottom of the matter and, as he put it, ‘the waters had been muddied’. While, therefore, he readily agreed that the first respondents have sold the airport since the blight notices, and indeed the Counter-Notices, were served, and that they could thereafter no longer be regarded as operators of the airport, he was not prepared to accept assertions and documentation which he had had no opportunity of considering in advance of the hearing, in relation to the position before then when the companies were associated and BAA Limited plainly had an interest in Edinburgh Airport.

[24] In that situation, we do not feel that we can properly determine this issue on the basis of Mr Farrell’s submissions. The applicants would have to have the opportunity of considering the documentation produced and either accepting the position or trying to dispute it. In court terms, we would in relation to that submission have to allow a ‘proof before answer’.

[25] However, the position in relation to Mr Farrell’s second submission, founding on the situation after the sale of the airport, is different. The applicants accept that this sale has taken place. Whatever they do or do not accept in relation to Edinburgh Airport Limited, they accept that the first respondents could not be ‘relevant airport operators’ after the sale. If, therefore, this matter should be tested at the present time, when the Tribunal is considering the question as to who is “the appropriate authority”, it cannot be the first respondents. The applicants contend that the relevant date is the date of the blight notices (or it could be the Counter-Notices). Mr Farrell submitted that it is the date of our decision. (We suppose there might be a theoretical question, if we are considering the references in stages, as to which decision, but that would clearly make no difference in this case.)

[26] We accept Mr Farrell’s submission. Although the decision of the Court of Appeal in Mancini v Coventry City Council might at first sight appear to point to the date of the counter-notice as being the relevant date, there was no need in that case to consider any later date. The change of circumstances which raised the issue in that case was between the date of the blight notice and that of the counter-notice. Purchas LJ clearly indicated (although this was not necessary for the decision and therefore obiter) that the material date might be postponed to the date of the hearing. He said, at page 141:-

“This may well arise in a case in which the critical decision lies between the date of the objection to the blight notice and the date on which the tribunal determines the matter. This does not arise in this case nor has the matter been fully argued before us. It is sufficient for me to hold that the earliest material date for the purposes of this appeal is the date of the objection notice. Nothing in this judgment should be taken to exclude the possibility of contending, in an appropriate case, that the material date might even be postponed to the date of the hearing by the tribunal.”

[27] The issue arose in that case in different circumstances, the authority having made a decision to re-zone the area of land in question between the date of the blight notice and the date of the counter-notice. That might almost seem a stronger case for, in fairness to the landowner, applying the earlier date (although the tribunal had made a finding that the authority had already been reconsidering the zoning before the service of the blight notice).

[28] In the present case, the change of circumstances which has led to this issue occurred between the date of the objection to the blight notices and the date on which the tribunal is determining the matter. It seems to us that consideration of the nature and form of the statutory scheme for the alleviation of planning blight leads strongly to the view that even if it were assumed for the purposes of this argument that BAA Limited were the appropriate party before the sale, the sale changed the position. The scheme is indeed, as Mr Farrell put it, forward looking. The idea of requiring a former airport operator, who no longer has any involvement at all in the area in which planning blight has arisen and would no longer have compulsory purchase powers, to acquire blighted land, seems to defy reality.

[29] In reaching this view, we appreciate that the applicants’ object is to pursue a monetary claim for compensation and in many circumstances a party against whom a monetary claim has arisen cannot subsequently transact with the result of defeating the claim. This is where Purchas LJ’s observations in Mancini at page 135, appear to us, agreeing with Mr Farrell’s submission, to be as relevant to this case as in the different circumstances of that case. His Lordship, with whose reasoning Stephenson LJ and Griffiths LJ each agreed, said:-

“Before I turn to deal with the appeal in detail, I would like to state my view of the underlying purpose as disclosed in the 1971 and 1973 Acts. This is to achieve planning control in the hands of the appropriate authority, but to give relief to those who are, or will be in the future, affected by making the compulsory purchase provisions, including provisions for compensation, available to such persons. There are, however, in the part of the Act with which this appeal is concerned, no relevant provisions granting retrospective compensation for past damage where, as a result of the planning authority’s present lack of intention to acquire an interest there is, ex hypothesi, no diminution as a result of blight on the present market value of the interest in the land.”

In this case, as far as the possible involvement of the former owner is concerned, the applicants do indeed appear, contrary to the scheme of the legislation, to be looking for compensation for past damage rather than in relation to the present position, whatever that might be.

[30] A further problem in the applicants’ position is that, while the logic of their position in relation to this argument might be that the claim should proceed only against the first respondents, they are in fact seeking to proceed also against the second respondents. Mr Riva appeared to us to be vacillating in his submission between acceptance that there should only be one ‘appropriate authority’ (in effect, saying that the applicants had not been able to determine which of the respondents that was and had gone against both with the hope of succeeding against one, an approach which we could understand) and suggesting that both respondents were appropriate authorities. Whatever he actually intended, his position involved keeping both respondents in the proceedings. We agree with Mr Farrell that that is quite contrary to the statutory scheme, Section 120 in particular being clearly framed on the basis that it is necessary to identify “the appropriate authority”. The idea of both authorities purchasing the hereditament makes no sense, nor can it be imagined how the compensation liability would be determined with the two companies no longer being associated.

Disposal

[31] For these reasons, we consider it entirely appropriate, in the light of the change of circumstances in this case, to decide this issue on the basis of the present circumstances. Whatever the position before the sale, the first respondents’ objections to the blight notices now fall to be upheld, the first respondents’ pleas-in-law 2 and 3 sustained and the references, in so far as directed against them, dismissed. (Plea 4, directed at the section 102(4)(b) objection, was not, as we understood it, specifically addressed).

[32] The references will therefore proceed in relation to the second respondents’ objections only. Any issue as to the expenses of this hearing is reserved meantime.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 29 November 2012

Neil M Tainsh – Clerk to the Tribunal