Lands Tribunal for Scotland

OPINION

Dobbie v Fife Council

This is an application under section 14(1) of the Land Compensation (Scotland) Act 1973 ("the Act") to determine the amount of compensation, if any, payable for the depreciation in value of a dwellinghouse at No. 3 Lethamhill Avenue, Hillend, by Dunfermline consequential upon the opening of the Hillend By-pass on 21 June 1993.

The claimants seek compensation in the sum of £2,100 for the depreciation in the value of their property by physical factors caused by the use of the new by-pass. The respondents, as compensating authority, contend that no compensation is payable.

At the hearing at Glenrothes on 14 October 1997 the claimants were represented, with the permission of the tribunal, by Mr William Ricketts, a chartered surveyor from Cardiff who has had experience of dealing with such claims throughout Great Britain. He gave evidence himself and led evidence from the claimants, Mr and Mrs Dobbie; Mr J K Dewar, a chartered surveyor based in Kirkcaldy and a partner in the form of D M Hall; and Mr M S Wright, MIOA, a noise and vibration consultant. We carried out an inspection on 30 October 1997 between 4 and 6pm.

The respondents were represented by Mrs Jane E Ferguson, solicitor, who led evidence from Mr B C Romans and Mr R G Wilson, both chartered civil engineers employed by the respondent; Mr Angus Broadhurst, a member of the Institution of Lighting Engineers; and Mr Henry Cormie, a chartered surveyor based in Kirkcaldy and a partner in the firm of Graham and Sibbald.

Section 1 of the Act lays down the right to compensation thus:-

"(1) Where the value of an interest in land is depreciated by physical factors caused by the use of public works, then … compensation for that depreciation shall … by payable by the responsible authority to the person making the claim …

(2) The physical factors mentioned in subsection (1) above are noise, vibration, smell, fumes, smoke and artificial lighting and the discharge on to the land in respect of which the claim is made of any solid or liquid substance …"

Section 6 provides as follows:

"6(1) The compensation payable on a claim shall be reduced by an amount equal to any increase in the value of [the subjects] which is attributable to the existence of or the use or prospective use of the public works to which the claim relates."

The claimants aver that all of these physical factors, except 'small' and 'smoke', have had an adverse effect on the value of their property. The respondents dispute the existence of physical factors and contend that, in any event, if they exist, they do not cause depreciation. Further they contend that the benefit from the works outweighs any depreciation.

The following non-contentious matters were either agreed or appeared from the evidence:

(1) Lethamhill Avenue is a small development of eight houses built by the local authority in the 1930s. There is a block of two semi-detached houses at each end of the Avenue and, in the middle, a block of four terraced houses. Number 3 Lethamhill Avenue is semi-detached being at the eastmost end of that middle block. The house in fact faces north-west but we have, for convenience, treated it as if facing due north.

(2) The claimants purchased their house in November 1981. It consists of a single storey semi-detached house having brick walls, roughcast externally, and a pitched roof covered with slates. The accommodation comprises a living room, three bedrooms, kitchen and a bathroom. The internal floor area is approximately 840 square feet (78 square metres). The property is generally in good order and has double glazing and gas fixed central hearing. There is garden ground in front of the house and a generous area of garden to the side and rear where there is a timber built garage and a number of outbuildings including a pigeon loft.

(3) Lethamhill Avenue is an 'L' shaped cul-de-sac with the short leg rising gently south from Main Street and turning west in to the longer leg which runs parallel to Main Street. The ground between that part of the avenue and Main Street is a grass public open space. The claimants' house is at the angle of the 'L' and accordingly outlooks down the short length of the avenue to Main Street. The north façade of the house is about 39 metres from the nearest edge of the carriageway of Main Street.

(4) Although the front door of the house is on the north side of the building, the layout of the accommodation is such that the living room and two of the bedrooms face to the south while the other bedroom, the kitchen and the bathroom face to the north.

(5) Prior to construction of the by-pass the subjects enjoyed an open aspect to the south with a view over contiguous farmland which rose gently from their south boundary towards a wooded slope on the south east.

(6) The relevant public works, the Hillend By-pass, were opened on 21 June 1993 and the valuation date for the purposes of the Act was accordingly 22 June 1994. At that date the subjects had an open market value of £45,000.

(7) The by-pass runs generally parallel to the south boundary of 3 Lethamhill Avenue and the other houses in the same block. It sits on an embankment at a height of about 3 metres above the rear garden level of the claimants' house.

(8) The south façade of the house is approximately 35 metres from the nearest edge of the carriageway of the by-pass. The average depth of the back garden of the house is about 15 metres: the rear boundary of the garden (and other adjoining gardens) is a 1.5 metre high brick wall which was constructed by the roads authority and establishes a clearly defined physical break between private garden and land associated with the by-pass. From that brick wall it is a distance of about 10 metres to the base of the bund: that ground is reasonably level but it is overgrown and untidy.

(9) The bund rises to a height of about 4 metres above the carriageway and on top thereof a double willow fence, about 1.5 metres high and 1 metre wide, was constructed. It was filled with living plants with the aim that shoots of variable height would grow and thus soften the impact of the bund and help minimise traffic noise. It does not hide the top of double-deck buses or large lorries nor, of course, the 12 metre high columns on which the sodium lanterns are mounted.

(10) The open aspect to the south which the claimants enjoyed prior to the construction of the by-pass has now gone and been replaced with a view to the bund and willow fence.

(11) Prior to the opening of the by-pass, the villages of Hillend consisted largely of a row of houses on each side of Main Street which was a part of a main arterial route, the A92, from the Forth Road Bridge and the west to Fife and the north. The carriageway of Main Street varied in width between 8.5 metres and 10 metres. Apart from Lethamhill Avenue, Main Street was the only street in the village and the majority of houses there fronted on to the pavement or were within a very few metres of the carriageway although there were several separate houses lying behind the properties fronting Main Street. There was, and is, a public house in Main Street but no shop, church or other form of community centre.

(12) Prior to the by-pass, Main Street carried approximately 16,965 vehicles per day and there were often lengthy periods each day when pedestrians could not safely cross the street due to the constant stream of traffic. Drivers seeking to emerge from Lethamhill Avenue or from other entrances were frequently dependent on the goodwill of drivers in Main Street, slowing or stopping to allow them out.

(13) For many years there had been a strong demand by the majority of local residents for the construction of a by-pass. A by-pass had been proposed to the north. In 1986 the authorities agreed to provide the by-pass to the south. Construction did not start until 1989.

(14) When the by-pass opened Main Street became a cul-de-sac with entry from the east and via a roundabout at the end of the by-pass. The main places of employment, schooling and shopping for residents of Hillend are located to the west. The nearest large town is Dunfermline. A convenient access to it was, and remains, the B916 road which runs north from the east end of Main Street.

(15) At the valuation date the volume of traffic using the by-pass was assessed at 18,500 vehicles per day. There was very little traffic using Main Street and even less passing the end of Lethamhill Avenue. However, for the purposes of comparative noise calculations a figure of 470 vehicles per day was agreed to be appropriate.

(16) Taken as a whole, Hillend became a much more attractive place to live when the by-pass opened. Property in the village became more marketable.

(17) For comparative purposes it is reasonable to assess road traffic noise by reference to the HMSO technical memorandum "Calculation of Road Traffic Noise" published in 1988. The methodology it contains is the standard prescribed by the Noise Insulation (Scotland) Regulations 1975.

(18) As a result of the use of the by-pass, noise levels assessed in accordance with the specified methods can be taken to be somewhere in the region of 54-56dB at the north side of the building and in the region of 59-62 dB at the south side.

(19) Prior to the opening of the by-pass the effect of traffic on Main Street was to produce noise levels of about 60-62 dB at the north side and 53 dB at the south side of the subjects.

Evidence for the Claimants

Mrs Dobbie gave evidence of the effect of the by-pass. It is appropriate to record that no doubt was cast on the genuineness of the claimants' own perceptions of the problems created for them by the new road. They had not regarded the traffic in Hillend as creating much of a problem for them. They had opposed the by-pass to the south because of the expected impact on their home. The by-pass had originally been proposed to run north of the village. In addition to the loss of open prospect to which we refer below, Mr Dobbie's hobby of keeping pigeons had been seriously curtailed. We had no doubt that this was an important matter for him and was a consequence of the by-pass cutting off his garden from the open fields. However, we heard no evidence that it would be an aspect affecting hypothetical purchasers and we consider that this type of loss is personal to him and not one which bears on the value of the interest in land.

Mrs Dobbie dealt briefly with the attractive open view enjoyed before the by-pass. It had been open agricultural ground planted every year rising to the south and with a wood on the south east side.

She was then taken through the various physical factors listed in the Act. She described a constant noise which was much worse between 7.00 and 9.30am and again between 3.30 and 7.00pm. They used the south bedrooms in the house. They had been in the habit of sleeping with windows open but could not now do this because of the constant noise.

Because of light from the street lights on the by-pass they required to move their bed. They had bought heavy curtains. However it was a bright light which contributed to disturbance of their sleep.

Asked about dirt and dust, she said that she had noticed a change. She had to clean her windows more often than before. She thought it obvious that there was more pollution. There were more fumes. Asked about smell she said that it was just smelly. They could not open windows in the summer because of the smell. A particular difficulty since the construction of the by-pass had arisen from the habit of a neighbouring farmer or contractor using ground immediately to the south of the by-pass to burn rubbish. She had had a great deal of trouble with smoke coming over the by-pass. She had complained to Environmental Health officials. This had been a persistent problem.

Asked about vibration, Mrs Dobbie said that she thought this arose mainly from empty lorries going over bumps. This certainly gave rise to more noise.

Mrs Dobbie was critical of Fife Council's methods of measuring the noise. They had not set their meter at the wall of the house but at a clothes pole some 2 ½ metres distance from it. She thought that it had happened on a Fife holiday and, accordingly, was not typical of traffic noise. We accept that the measured noise could not be relied upon but, as we note below, the respondents evidence was to the effect that the measurements were intended as a check on their calibrated noise figures rather than an independent means of assessment.

Her general impression was that the by-pass was not a benefit to them. Access to the house was more of rigmarole because they had to go to the roundabout at the east. She thought that the removal of traffic from Main Street had led to such careless parking habits by inhabitants that emergency vehicles would be unable to get access now. She freely accepted that the by-pass had been a great benefit to the local community in general but not to them. They had not really noticed the noise from Main Street before. They were further away from the traffic then. Working in the kitchen she was less aware of noise than when relaxing in the living room or garden. She commented that use of the garden had become very difficult because of the smoke. She was aware of dirt from the smoke and from the house building operations now going on in Hillend.

Mr Dobbie's evidence was largely directed to the effect on his pigeon-breeding hobby. He also gave some evidence of the varying peaks of traffic flow.

We accepted the evidence as to noise of traffic from the by-pass. Our assessment of this situation between 4pm and 6pm on 30 October 1997, a calm, dry and overcast day, confirmed the noise as distinct and obvious. It was not at a level which would attract attention in an urban setting. It did not interfere with normal conversation in the garden. We think that although there can be no doubt of the impact of the by-pass on the Dobbies by comparison with their previous peaceful view to the south, the noise is not the major factor. As was plain on inspection, the sheer physical presence of a steep unkempt bank beyond the foot of the garden is the dominant adverse factor.

Mrs Dobbie's evidence of increased light in the rear rooms was supported by our observations on inspection and by the expert evidence. Having regard to her evidence of smoke etc from burning operations and dirt and dust from other local operations, we could not find in her evidence sufficient basis to hold that any of the defined physical factors, other than, perhaps, noise and light, could have an effect on the value of the subjects. No expert evidence was led on behalf of the claimants dealing either with the existence of such other factors or their particular effect on valuation. D M Hall's report included a reference to fumes but it was not clear whether this was the surveyor's direct evidence or simply a quotation from Mrs Dobbie. Plainly smoke from the contractors' operations or dust from building activities is not due to "use" of the by-pass and, on any view, would be excluded by section 1(5) of the Act which limits our consideration to factors which have their source in or on the public works. Her evidence of smell was not specific and we observe that this was not a factor relied on in the application. In any event, on these factors we preferred the evidence of Mr Wilson which we refer to below.

Mr Dewar gave evidence because his partner, Mr Seaton who had written the firm's report, was on holiday and had not received a copy of Mr Cormie's report in time to comment on it. Mr Dewar adopted Mr Seaton's report. His evidence was to the effect that, in accordance with instructions from Mr Ricketts, Mr Seaton had inspected the subjects with a view to advising as to his opinion of their open market value as at 22 June 1994 on the assumptions as follows:-

"(1) The Hillend by-pass had not been constructed

(2) The Hillend by-pass had been constructed."

Mr Seaton's conclusion was that on the first assumption the appropriate figure was £48,000 and on the second £45,000. Mr Dewar agreed with those figures.

Although it may be accepted as implicit in the assessment of the former figure that the calculation assumed continuation of the previous adverse traffic situation in Main Street, Mr Seaton's report made no mention whatever of this. His traffic comment was confined to the following: "Significant traffic noise was noted due to the proximity of the road and the fumes in the rear garden have increased since the opening of the by-pass. This is accentuated during peak hours. The general amenity of the subjects has been adversely affected." He also referred to the effect of the development of the new road on the previous open southerly outlook over open fields. Mr Dewar did attempt to deal with the effect of the previous traffic situation. He accepted that the houses fronting on to the main road at Hillend had had their amenity substantially improved. He thought the subject property would not have experienced the same degree of disturbance. He described it as situated "in the formerly quiet cul-de-sac". He pointed out that Mr Cormie's written assessment had made no reference to the loss of amenity attributable to the change in outlook at the back from a pleasant view over open fields to an overgrown weed ridden embankment.

Although there was evidence from both Mr Dewar and Mr Cormie (mentioned below) as to the inferences to be drawn from figures derived from sales and valuations of some other houses in Hillend, at or about the relevant date, we were unable to derive any real assistance from these. They helped establish the value of subjects with the by-pass in place at £45,000. However all sales were at a time when the by-pass was in operation. There was no evidence of sales of comparable houses in a position equivalent to that of subjects with heavy main street traffic, ie with the by-pass not in operation. We deal further below with the detail of the evidence of comparative sales or valuations spoken to by Mr Dewar and Mr Cormie.

Mr Dewar gave evidence of negotiated settlements in Windygates, a similar rural village lying to the east in Fife. However those cases involved the actual acquisition of land owned by the claimants for the construction of a by-pass. We were not persuaded that this example was of any assistance to us as it turned on different statutory provisions. We do not know what part the loss of ground played in the view taken by the District Valuer or how much was due to disturbance not caused by physical factors.

Mr Dewar summarised the effect of his evidence as being that it did not require an experienced chartered surveyor valuer to put forward a case for a loss in value to a house where a major by-pass is constructed immediately at its rear boundary. Although the matter was no doubt put in this way for emphasis it may be misleading and distracting to see the matter in terms of imposition of a major by-pass. It can be viewed in terms of moving a major traffic route from the front to the back of a house. It seems to us that this case does require analysis of the comparative effects of the by-pass and the situation before the by-pass. We had no direct evidence of a drop in value derived from a direct comparison of sales of similar subjects, some affected by the by-pass and some not. Such evidence, of course, is seldom available. Mr Dewar's evidence was essentially his, and his partner's , expert opinion of the effects of the by-pass on these particular subjects. However, he had not been asked, and had not attempted, to evaluate the main factors bearing on the reduction in value not to set out in detail which factors he had in mind. In the circumstances we are not persuaded that his differential figure is a reliable basis for assessment of depreciation attributable to physical factors.

For example, we heard detailed evidence from Mr Wright, summarised below, as to the effects of noise. There was no suggestion that this evidence had been taken into account by either Mr Dewar or Mr Seaton. If they reached their assessment of drop in value on a different view of the extent of increased noise, Mr Wright's evidence would simply demonstrate their figure to be unreliable. Mr Dewar, at one point in his evidence, appeared to accept that if the noise before and after was the same, his assessment of difference in value could nevertheless be explained by the reduction in amenity due to the obstruction of the embankment with the problems of the hedge being overgrown and untidy. Certainly our overall impression of his evidence was that although he included noise as part of his assessment he did regard the physical impact of the embankment as the major depreciating factor. As we have noted, Mr Seaton's report made no attempt to comment on and compare the effects of "before" and "after" noise levels.

We did not consider that the evidence of Mr Seaton's report, or of Mr Dewar, provided support for the view that a hypothetical purchaser would pay less for these subjects because of any increase in the adverse effect of the physical factors of vibration, fumes, smoke, artificial lighting or discharge on to the land. Neither attempted to place any weight on these factors.

Mr Wright is a corporate member of the Institute of Acoustics with a Diploma in Acoustics and Noise Control. He has extensive experience in relation to matters relating to noise, particularly that associated with transportation and road construction. He spoke to his report. He gave helpful evidence about the relevant methodology.

He discussed the difference between his calculated figures and the calculations prepared on behalf of the respondents by Mr Wilson. The figures were, however, broadly similar. His calculation of levels at the front or north façade of the subjects before the by-pass was 59 dB whereas the council's calculation was 63 dB. He explained that the differences arose from differences in topographical data used. Having inspected the subjects we consider the council's topographical input to be realistic.

In relation to the south façade, he accepted that the differences between the parties' figures were not of great significance. He had taken the "worst case" figure as being the noise admitted at the top of the window. The council had, in effect, attempted to assess at the receiver's head height. It was accepted that, in this instance, the level would increase with the height. It is unnecessary for us to observe that most recreational use would be at or below sitting height. We are not persuaded of the validity of Mr Wright's approach on this point. Even if appropriate in a case where sash windows were used which could be opened only at the top, it is sufficient for us to say that we did not find it appropriate having regard to the hinged rear windows we observed on inspection.

In assessing the extent of noise impact, Mr Wright stressed that whether his figures or those of the respondents were preferred, there was demonstrably an increase of the order of 10 dB at the rear. This was equivalent to a doubling of perceived loudness. The main living quarters were at the rear of the house and plainly that part of the garden which the occupiers would actually use for recreation was to the rear. There was a decrease at the front but the rooms on this side were much less noise sensitive. Taken as a whole, the extent and level of noise increases caused by the scheme considerably outweighed the benefit of noise decreases resulting from diversion of traffic from Main Street.

Mr Wright also dealt in his report with the effects of lighting. The light standards were an intrusion on the view. There was also spillage of light into the property. We were able to assess this direct on inspection.

Mr Ricketts was allowed to appear for the applicant and also to give evidence. We had some reservations about this procedure but as the issues appeared to lie in fairly limited compass we took the view that the inevitable difficulties could be overcome. (These difficulties include the confusion between evidence and submission illustrated in Wishart v Fife Regional Council (LTS/COMP/1995/14) (24 June 1996) (unreported).

Mr Ricketts' own position was frankly stated. It is his practice to observe new road building schemes throughout Britain and to advise potentially affected persons of possible rights to compensation. In a suitable case, such as the present, where he had satisfied himself of the merits, he would act for the claimants on the basis that it would cost them nothing. If successful, he would recover appropriate fees and outlays from the respondents. If unsuccessful he would bear the whole costs. The potential conflict between his role as expert witness and as representative with a financial stake in the outcome o the case is obvious. It has been a matter of adverse comment in England and Mrs Ferguson drew our attention to dicta in Hallows v Welsh Office: 70 P & C R.117. On the other hand, where the potential conflict is overt, the risk of a tribunal being misled can be overstated.

We are satisfied that although it is appropriate to take notice of his involvement in the financial consequences, this is not a factor of significance in the present case. Although Mr Ricketts led himself to give evidence as expert on a particular aspect of valuation, we come to the view, discussed below, that in essence his evidence in this case should be treated as equivalent to submission on material otherwise before us.

Mr Ricketts' evidence of his approach to assessment of compensation was that he would lead evidence of a local expert on house valuation to speak to the overall effect of the public works, ie the "global depreciation". In this case Mr Dewar had given evidence to the effect that the market value of the subjects on 22 June 1994 if the by-pass had not been constructed was £48,000 and as it was with the by-pass constructed, at £45,000. The global depreciation was therefore £3,000. Mr Ricketts then set out to use his expertise to determine what percentage of this global depreciation was attributable to compensatable factors. He did this by assessing how much should be "deducted" from the global figure to reflect non-compensatable loss. The balance was accordingly compensatable. He referred us to various unreported decisions in England in 1992, where this approach appeared to have been accepted without question; namely, Jenkins v Northamptonshire County Council; Straker and Another v Northumberland County Council; Wood and Another v Northumberland County Council; Johnston and Another v Northumberland County Council. He referred also to a Scottish case Brown v Central Regional Council (LTS/COMP/1992/11) (22 November 1993) (unreported).

Armed with Mr Seaton's report he had examined the property with the by-pass in place and had interviewed Mr and Mrs Dobbie as to the effects of the physical factors. He confirmed that his approach was to try to isolate or identify the non-compensatable part o the drop in value spoken to by the expert valuer. A figure, expressed as a percentage was then taken out of the global valuation and the remainder was compensatable. On this approach, he did not have to distinguish between physical factors. He would speak to the people involved and find out which physical factors affected their property "to a greater or lesser extent". The Act did not require allocation of loss of value to specific factors and he had not attempted this exercise. He accepted that this would mean that if the tribunal held that, any factor or factors referred to by him had not been established in evidence, his valuation would be based, in part, on an element which should not in fact be taken into account. Forced to attempt the exercise of allocation for the first time in course of his evidence he thought that noise might be said to account for 50% of the drop in this case.

Although the approach of establishing a global figure by expert local evidence and then deducting the non-compensatable factors to lead to a compensatable amount, may have produced figures which were acceptable to the various tribunals to which he referred, we have some reservation as to the application of this methodology.

Although presented as a separate valuation stage in the calculation, it seems to us that, in a case like the present it should be seen as no more than a submission as to the effects of the other evidence. Presented as expert assessment it distracts from the need to identify clearly the evidence upon which it ought to be based. If there was, say, convincing sales evidence of an actual reduction in value, as opposed to a reduction based only on unsupported opinion, and if it was established that the reduction was attributable solely to the existence and use of public works, that would be a figure within which assessment of compensation for the purposes of section 1 would have to lie. If there was no other evidence to show how that actual reduction came about, it would be appropriate to look at the evidence bearing upon a hypothetical purchaser's perception of the non-compensatable factors on the one hand and the physical factors on the other. The relative weight to be given to the two sets of factors could be assessed and the "global" depreciation apportioned between them.

In order to apportion it is essential to have a clear view of the factors falling into each portion. In other words we consider it obvious that to apportion a finite amount accurately between to elements, these elements must be assessed by the same standards. The factors in the non-compensatable basket must be identified; the physical factors eligible for compensation must be identified. Apportionment must be from a defined viewpoint, ie that of the hypothetical purchaser.

Mr Ricketts' written report to which he referred in his evidence, did not include any express reference to the factors which he took into account as being non-compensatable and for compensatable elements it appeared to rely entirely on the claimants allegations that the "use of the bypass had resulted in an increase - in varying measures - of the impact on their home of noise, dirt and dust, vibration, artificial lighting, and fumes."

It is, of course, the reaction of the hypothetical purchaser rather than the existing proprietor which is important. The only evidence led of the effect of dirt and dust, fumes, and vibration came from Mrs Dobbie. We did not find it persuasive. In the event we consider that although factors other than noise were part of Mr Ricketts' written assessment, we have not been persuaded, on the evidence, that any other physical factors attributable to the use of the by-pass are of material weight in this case. The part such other physical factors played in his assessment was unspecified and, it appeared, unknown to him. Although he tentatively put a figure of 50% on the noise alone in course of his evidence we are unable to rely on this and unable to adjust his claimed figure accurately.

However, the more fundamental difficulty we have with Mr Ricketts' approach turns on the fact that the figure for global compensation is not an actual observed reduction for which an explanation must be found. It is simply the opinion of a surveyor of the total impact of various factors. We should make it clear that what we have referred to as an actual reduction might be established by direct evidence of comparables and we accept that an element of opinion evidence is inevitably involved. The line between a demonstrable reduction and one depending entirely upon expert opinion may well be narrow. However cases such as the present, are clearly in the latter category. If so, the explanation for the assessment ought to be part of the valuer's evidence. To make his assessment he must have attached a weight to various factors. The apportionment of such an assessed global figure is one to be determined only by examination of the material relied on by the surveyor. If that material or his assessment of it was unreliable the global figure itself becomes unreliable.

It was a feature of this case that both Mr Seaton's report of 21 August 1996 and Mr Ricketts' apportionment of his global figure, contained in the report dated 8 November 1996 were prepared before Mr Wright had carried out his investigations into noise and before figures were available from the respondents in relation to relative noise levels. No adjustment to either report was proposed. It seems therefore that accurate information as to noise levels was considered irrelevant to Mr Ricketts' approach. If there had been an established reduction in value, Mr Wright's evidence could properly have been used to help find an explanation for it. We also consider that his evidence could properly have been taken into account by an expert valuer making an assessment of depreciation. However the existence of the accurate figures to which he spoke, was not tied in with Mr Ricketts' approach in any way.

The apparent justification for Mr Ricketts' method was that his experts did not attempt to differentiate between the presence of the by-pass and its physical factors arising from its use. That, however, seems to us to be a weakness in their evidence rather than a basis upon which their assessment can be taken as a reliable basis for free analysis by Mr Ricketts.

In the event we consider that we can attach little weight to the evidence given by Mr Ricketts as an expert in this case. He did not purport to give direct evidence of the nature and extent to which physical factors had an adverse effect on the property. However, in so far as his evidence could properly be treated as equivalent to legal submission, we have attempted to give due weight to it.

Evidence for Respondents

Mr Romans described the circumstances in which the by-pass came to be built and gave some detail of the physical construction. He was well acquainted not only with the nature and effects of the by-pass but with the impact of the previous heavy traffic flow in Main Street. His evidence demonstrated the obvious benefit to the village as a whole. However, he agreed that all by-passes would be expected to benefit the majority. He himself had sympathy for people who were potentially adversely affected. He had had sympathy for the claimants. The respondents had carried out landscaping to the embankment and had built the wall to ameliorate the effects on residents of Lethamhill Avenue. The willow wall at the top of the bund had the advantage of being a solid barrier with a living hedge which could be cut. Mr Romans was in no doubt that the claimants had always genuinely believed that their previous difficulties in getting out onto Main Street were much less than the impact of the by-pass.

This evidence gave considerable support to the claimants but Mr Romans did not attempt to compare the position with the bank and willow wall in place compared to the previous impact of Main Street traffic. He did strongly express the view that Hillend was now a totally different village and a much more pleasant place to live. Mr Romans was an impressive witness. He was well placed to offer a comparative opinion. We have no doubt that his view accurately reflected the reality.

Mr Wilson is senior engineer in the Roads Service. One of his areas of expertise is road traffic noise. He gave evidence of measurements made in relation to air quality is smell, fumes, and smoke which satisfied us that the by-pass traffic did not give rise to any significant pollution levels. The south façade of the house was only 5 metres nearer the by-pass than the north façade was to Main Street. Such a distance could not produce an identifiable difference in what are, in any event, insignificant levels. He gave evidence in relation to vibration. With a properly designed and constructed new road, there should not be a problem of ground-borne vibration. There was no evidence of any demonstrable effect here. Airborne vibration is closely related to nuisance from noise. We were satisfied on his evidence and the absence of any cogent contrary evidence that no element of depreciation attributable to vibration is present in this case.

In relation to noise, Mr Wilson spoke to the figures set out in the respondents' productions. The most important have been referred to in relation to Mr Wright's evidence above. He explained that specific noise reduction measures had been incorporated in the design, namely the landscaped embankment and the willow wall noise barrier. The intention was to bring down the anticipated noise below the level where noise would normally be considered a factor preventing people enjoying their gardens. He stressed that proper interpretation of the figures was that, taking the property as a whole, the maximum prevailing noise level had been reduced. In other words the maximum at the south or rear side was now less than had previously been experienced at the front.

Mr Wilson also attempted to deal with the effect of perception of noise. Information in the Design Manual for Roads and Bridges: Environmental Assessment, published by HMSO, showed that only 12% of people would be bothered at or above the category of "quite a lot" by a level of 58 dB (A). Mr Wilson also explained that, when considering the impact of noise from Main Street, regard should be had not only to the noise as calculated but to the nature of it. Congestion in Main Street not only slowed traffic but introduced starting and stopping, accelerating and breaking. The effect would have produced an increase in irritating noise levels. No such effects were likely with the comparatively smooth changes in flow on the by-pass.

He also gave evidence of noise threshold levels for planning under reference to PPG 24. However, we did not regard that factor as significant to the present context. We accept potential depreciation due to noise even where the levels fall well short of those considered prohibitive for planning purposes. Essentially the problem in the present context is one of comparison.

Mr Broadhurst described the lighting of the by-pass. The nearest light was a 180 watt low pressure sodium lamp at 46 metres from the house. Light reaching the house would be 24 lumens, the equivalent of 3 per cent of the output of a standard 60 watt bulb.

On our inspection, we saw that although the level of light was low it allowed objects and persons in the bedroom to be readily seen and identified. We did not doubt that by comparison with the previous unlit rear, the Dobbies were very aware of the lighting. However we heard no evidence to support that either this level of light, or the visible light sources, would have any adverse effect on value. There were street lambs to the front. There was no evidence that total darkness would be seen as beneficial by prospective purchasers of such subjects.

Mr Cormie spoke to his survey report, of 8 September 1987. He too had been instructed to carry out a valuation as at 22 June 1994 on the basis (a) of the Hillend by-pass being constructed and open to traffic, and (b) on the assumption that it had not been constructed. He had inspected the subjects and interviewed Mr and Mrs Dobbie at length. His opinion was that there could be no doubt that Hillend had been improved as a whole as a result of the removal of the very heavy persistent traffic flow which previously ran along the narrow and congested main street. Safety and car parking had improved as a result. He considered that these were aspects which would reflect positively upon the value of the subjects. He considered that the movement of traffic from a short distance in front of the property to a short distance to the rear, with all the screening and accommodation works in place, would be unlikely to have an effect on the judgement of a hypothetical purchaser. The visual impact and noise levels from the front of the subjects before the by-pass made for a much less peaceful environment. The screening works removed any visual impact of by-pass traffic. The subjects were now lying in a nicely sheltered position. Accordingly he found no difference between the values appropriate on the two assumptions.

In evidence he stressed that property in Hillend was much easier to market. The increased demand was demonstrated by the extensive new house building works in the village. He accepted that there was not a great deal of comparable evidence available for his valuation. The absence of through traffic in the village would be of great benefit. It was important to a hypothetical purchaser.

Mr Cormie was reluctant to comment on hypothetical situations put to him. He stressed that he himself had not found the by-pass intrusive in course of his visit. In particular, noise had not appeared to him to be a worry. He did not consider that a potential purchaser would be adversely affected by it.

It is appropriate at this stage to consider the detail of the comparative sales or valuations referred to by Mr Dewar and by Mr Cormie. Mr Dewar gave evidence that, had the by-pass not been constructed, the open market value of number 3 Lethamhill Avenue on 22 June 1994 would have been £48,000. On the same date, and assuming the by-pass constructed and in use, the open market value was estimated at £45,000, a difference of £3,000 or just over 6 per cent. For reasons already explained, Mr Dewar was speaking to the survey and valuations made by his partner, Mr Seaton.

The respondents are agreed about the £45,000 valuation but dispute the higher figure. It is appropriate therefore to look at the evidence upon which that £48,000 figure is based.

In his valuation report of 21 August 1996 Mr Seaton incorporated information of "other sales and purchases in the area" thus:-

  1. 8 Lethamhill Avenue, Hillend. 2 bedroom semi-detached bungalow, valued (for lending purposes) in November 1993 at £40,000.
  2. 5 Lethamhill Avenue, Hillend. Mid terraced 2 bedroom bungalow. Sold February 1994 at £43,500.

Mr Dewar told the tribunal that, since the only sales evidence in the cul-de-sac related to house with 2 bedrooms as opposed to the claimants' house which has 3 bedrooms, he had "made an allowance in value terms for the extra bedroom which has allowed me to arrive at an opinion of value of £48,000." We do not know whether Mr Seaton had derived his figure in the same way or had simply used his experience and local knowledge to conclude that the subject property in Lethamhill Avenue had been adversely affected by the presence of the by-pass and its associated accommodation works to the extent of £3,000.

However, as Mr Dewar's evidence was the evidence directly before the tribunal it is important to record that in the course of our inspection of the property, Mrs Dobbie said that all four properties in the middle block, ie Nos. 3, 4, 5 and 6 Lethamhill Avenue, were 3 bedroom houses and the two blocks of semi-detached properties at each end of the avenue contained 2 bedroom houses. We did not seek access to No. 5. However our external inspection appeared to confirm her understanding. Unfortunately, Mr Cormie's descriptive reference to number 5 was rather vague ie "3/4 apartment mid-terrace cottage" and he did not dispute the evidence of the claimants' surveyor. Nevertheless, we think it probable that Mr Dewar was in error in using the sale price of number 5 Lethamhill Avenue as if it related to a house with a bedroom less than the claimants' house.

The sale of number 5 was the only open market transaction of a property in Lethamhill Avenue. Both parties referred to it and Mr Dewar's evidence was specific as to how he had used the sale price or £43,500 to arrive at his "without by-pass" valuation of £48,000. We have already obseved that we do not accept the comparative sales/valuation figures as providing evidence of "without by-pass" values. In any event in light of our inspection we do not consider that the evidence relating to number 5 provides any support for a figure of £48,000.

With regard to the evidence about other transactions involving property in Lethamhill Avenue it is important to remember that, while all evidence should be looked at in the determination of open market value, the prices paid by secure tenants purchasing council housing under the "Right to Buy" legislation need to be regarded with caution. The open market value which the District Valuer has to determine, before discount is deducted, requires him to exclude the value of improvements carried out by the tenant. Mr Cormie's schedule makes reference to two such sales, number 2 and number 8 Lethamhill Avenue, each of which he described as a 3 apartment semi-detached cottage with kitchen and bathroom and having an internal floor area of 775 square feet (72 square metres). His schedule stated that No. 2 sold in June 1994 for £19,600 (a sitting tenant purchase based upon the District Valuer's value of £40,000) and No. 8 sold in March 1994 for £20,000 (a similar purchase based upon the District Valuer's value of £38,500). It was suggested that as the two properties were very similar this showed a recognition of an upward trend with the by-pass in use. However the by-pass was in use on both dates and we are unable to attach any weight to this minor variation in value.

The tribunal appreciates the difficulty confronted by the surveyors to obtain evidence which could support a 1994 valuation on the basis that the by-pass had not been constructed. As all of the comparative valuation/sales evidence we were given relates to the period from November 1993 until June 1994, when the by-pass was open and in use and Main Street was a near traffic free cul-de-sac, it is only relevant to assist in a valuation with the by-pass in use. This figure was agreed at £45,000.

Submissions

The parties closing submissions were comparatively short. Mr Ricketts had put before us in his introductory remarks a copy of the "turned off/turned on" formula to which we refer further below. He emphasised the importance of comparative assessment on the same valuation day. He recapitulated the evidence of his witnesses. He stressed Mr Dear's greater experience in domestic valuation compared with Mr Cormie. He confirmed that he adopted his own evidence as part of his submission. However at the end of the day he left it to the tribunal to determine the appropriate value.

Mrs Ferguson for the respondents stressed that the onus was on the claimants in relation to section 1. There was no reliable evidence of any physical factor apart from noise. We had to disregard non-compensatable items such as the view which played a significant part in Mr Dewar's assessment. The imaginary hypothetical purchaser would not be affected by every negative factor. He might be quite indifferent.

To some extent Mrs Ferguson's criticism of Mr Ricketts has been taken into account in our comments above. She stressed that the various cases referred to did not raise questions under section 6. She founded on Hallows v Welsh Office supra, for a general criticism of the value of Mr Ricketts' evidence and criticised his objectivity because of his interest in the outcome. We have already dealt with these matters.

In relation to noise she stressed that on the evidence both experts said that the noise at the front of the house was down. There was some dispute about levels at the back but we should prefer the evidence of Mr Wilson whose detailed calculations were available. The noise at the back was now 3 db lower than the noise had been at the front. The hypothetical purchaser would not distinguish back and front.

In relation to lighting she stressed that we were not concerned with light fittings spoiling the view. We were concerned with the effect of spillage of light. There was no reason for this to affect a hypothetical purchaser.

The main thrust of her submission was that Hillend was now a much more desirable place to live, that this included Lethamhill Avenue and that the negative effects on the subjects were cancelled by the benefits. The facts Wishart supra had some similarity and we should come to the same conclusion. As the benefits of the by-pass greatly outweighed the disbenefit there was no need for her to become involved in questions of interpretation of section 6.

Decision

There was no ostensible dispute between the parties as to the proper approach to interpretation of the Act and we were not referred to any authority on the inter-relationship between section 1 and section 6. There are a number of possible approaches to these provisions and we think it proper to set out the approach we have adopted in the circumstances of this case. However, as we did not hear full submission we are not to be taken as excluding the possibility of other approaches.

We accept that the effect of section 1 is to place an onus on a claimant to demonstrate, by whatever persuasive evidence is available, that the value of the subjects has been reduced by physical factors. This may be approached by use of the formula proposed by Mr Ricketts which was described in Brown v Central Regional Council supra in the following terms "any depreciation has to be measured by reference to the difference between the value of the house with the road in place and with traffic on it, but without any impact from noise (or other physical factors) and the value of the house with the road in place and used by traffic with its consequential noise (etc). Surveying witnesses referred to these two conditions as 'switched off' and 'switched on' respectively". We think that is the same test proposed by Mr Ricketts under reference to the 'turned off' value and 'turned on' value. It was important that both valuations should be carried out on the valuation date.

However it must be noted that, in Brown v Central Regional Council, supra no question of reduction under the provisions of section 6(1) arose and there was no question of comparison of causes of adverse factors. The 'switched-off/switched-on' formula compares a soundless by-pass with the actual by-pass, it does not compare pre-existing noise levels with noise levels created by the by-pass. We did not find the formula of assistance in this case having regard to the way in which the evidence was presented.

Although the cases of Wishart v Fife Regional Council, supra and Hallows v Welsh Office, supra, were referred to in submission by the respondents - and were familiar to Mr Ricketts who was involved in both - neither party made any attempt to analyse the different ways in which these cases dealt with the statutory provisions. We are not satisfied that the approach ultimately taken by the tribunal in Wishart demonstrates the same interpretation of the Scottish provisions as that given to the equivalent English provisions in Hallows. We are satisfied that different approaches can produce consistent results. In Hallows, the tribunal observed, in relation to section 1: "Depreciation may be calculated in many ways, all of them equally good". In relation to section 6 they said: "We do not think that this provision necessarily requires a separate deduction or any other particular method of giving effect to it. Provided that such an increase in value has been taken into account we think it entirely a matter of fact and opinion how this statutory provision is translated into a net figure of compensation. A specific deduction for betterment from a specific figure of compensation may be made but we do not think it would be wrong in law for a valuer to go directly to a net figure of compensation based on his experience".

It is right to observe, however, that in narrow cases where issues of onus may be important, it is necessary to keep a clear view of the statutory provisions. We think this can be done by keeping in mind the two separate stages in assessment which follow the literal approach approved in Hallows.

Under section 1 we have to consider the depreciation caused by specific physical factors. The approach actually taken by parties was to compare these factors with and without the by-pass. There was certainly no express attempt to lead evidence t fit the "switched-off/on" formula. We consider that the approach taken is consistent with the overall scheme of the Act. It was on the same lines as the assessment of "unaffected/affected" approach taken in Broom v Department of Transport LT/100/991, 15 December 1992 (unreported). In other words, assessment of depreciation under section 1 can be achieved by first determining the market value on the valuation date: ie the value with the by-pass there and in use, with all or any adverse physical factors. That value can then be compared with the price a purchaser would have paid for the subjects with the by-pass in use but with the same physical factors as would have existed had there been no by-pass.

We consider that the onus rests on the respondents to show, under section 6, that any compensation which would otherwise have been due in respect of physical factors should be reduced or extinguished by the effects of that section. Although in theory this is a second stage which only arises when a figure has emerged from the application of section 1, we accept that the respondents can take a broad approach. It may well be sufficient to point to the net improvement being such that no theoretical depreciation by reason of physical factors could possibly result in an entitlement to compensation. On the other hand, we think it clear that if such an approach is taken the onus rests on them. It is sufficient discharge of the claimants'; onus to show that, comparatively, the physical factors would lead to depreciation in value.

The question of proper interpretation of section 6(1) was referred to in the case of Wishart v Fife Council supra where the parties were also represented by Mr Ricketts and Mrs Ferguson respectively. There was no substantive argument on the point and, on the evidence, the tribunal found that there had been no depreciation in the value of the subjects as a consequence of the changes caused by the construction and use of the public works. It followed that there had been no loss caused by physical factors. The tribunal did express the view that, when assessing whether compensation was payable, no regard had to be had to any adverse effect on value due to the physical presence of the public works or any disadvantage which might flow from their presence and use other than from the specific physical factors. This is plainly true of section 1. If it was intended to refer to the effects of section 6, it was clearly obiter and without either the benefit of, or need for, examination of the statutory provisions. In any event, we have approached this case on the basis that, subject to avoidance of double counting, section 6 requires an assessment of all factors bearing on value.

Whatever approach is taken to fit the needs of a particular case and the type of evidence available in that case, we think it clearly essential to be alert to avoid double counting. Section 6 only comes into effect if assessment under section 1 has led to the conclusion that compensation is payable in respect of the relevant physical factors. We accordingly consider that the factors taken into account in making the initial assessment for the purposes of section 1 must be left out of account when we come to the second stage under section 6. We treat section 1 as requiring an assessment of notional depreciation looking only at the comparative adverse effects of the specific physical factors. We consider that section 6, in turn, requires assessment of any notional increase in value considering all factors other than those already taken into account. There is a clear contract between the sections: section 1 refers to depreciation by physical factors caused by "the use" of public works; section 6 to any increase "attributable to the existence of or the use or prospective use of the public works". Plainly a broader approach is required to assessment of any effects on value at the second stage.

Although it is clearly the intention of the legislation to limit the benefits provided by the Act to the adverse consequences of the physical factors, it seems to us that this policy is fully met by making assessment of compensation for physical factors the starting point. The applicant cannot get more than compensation for depreciation by physical factors caused by use. The question of whether compensation, so assessed, should be reduced or extinguished by any beneficial effect of the works seems to us to be a matter turning on the terms in which the relevant provisions are expressed. Having carried out the first stage assessment of relevant factors under section 1, assessment of "any increase in the value" under section 6(1) can be seen as involving a single overall assessment of all other relevant factors bearing on the value, not just those tending to increase it. "The public works" appears to us clearly to envisage consideration of these works as a whole. We find nothing in the language of the section to point to any other intention.

Provisions as to set-off are found in a variety of statutes: see Rowan-Robinson. Compulsory Purchase and Compensation, pages 234-236. We are not aware of any authoritative interpretation of any provision similar to section 6(1) which might have led us to a different approach. None was cited to us.

We have no difficulty in accepting that Mr and Mrs Dobbie personally have been significantly affected by the by-pass in their enjoyment of their property. However, it was not disputed that our assessment is limited to matters bearing on the open market value of the subjects; in other words, the value to a hypothetical purchaser. This is the effect of the incorporation by section 4 of the relevant provisions of the Land Compensation (Scotland) Act 1963.

For the reasons set out above we consider that this case turns essentially on assessment of the comparative impact of noise; the general advantage (other than reduction of noise) of removal of heavy traffic from Main Street; and the impact of the physical presence of the by-pass in substitution for the open prospect previously available from the subjects.

We have accepted that the broad effect of the evidence from the noise experts, Mr Wright and Mr Wilson, was that there was a substantial increase in the noise level perceived at the back of the house but that the resultant level was no higher than that formerly perceived at the front of the house. We find as a fact that the noise, while pervasive, is not positively annoying. Its effect might properly be summed up by the comment that, "In some parts of the house, traffic noise is more apparent than others". We have in mind the observations of the tribunal in Brown v Central Regional Council supra that: "The value of property in the open market may not automatically diminish as the result of the advent of a new negative factor. The enjoyment of the owner who has possessed the property before the event may thereby be reduced and its value in use to him may be substantially lowered, but to the recently arrived purchaser the presence of that negative factor may not be sufficient to reduce the value to him of the positive factors relating to the property". We accept that where subjects as a whole are truly affected by demonstrably increased levels of noise a tribunal should not be slow to accept that this would lead to depreciation of value. However in the present case the considerations are not straightforward. We did not have any evidence as to how prospective purchasers perceive noise levels in different parts of a house. We are, however, prepared to accept that a purchaser would identify certain amenity areas such as the back garden ground and the lounge as being more sensitive to the effects of noise. On the other hand if a purchaser was concerned about the detail of the sound in the house we consider that a factor of some importance to him would be the pattern of noise. We accept Mr Wilson's evidence that the noise from Main Street would be aggravated by the pattern of starting and stopping, accelerating and braking, to which he spoke. It is a matter of everyday observation that, particularly with heavy vehicles, such a pattern of traffic flow gives rise to more intrusive percept5ion of transient sound than would be expected from the steady flow on a by-pass.

For the various reasons discussed above we did not find the direct evidence led for the claimants to be a secure basis for our assessment of depreciation under section 1. However we observe that if we had been able to accept Mr Dewar's global depreciation of £3,000, we would, in light of his obvious impression of noise as being the minor factor, have been in the region of £1,000. In the event, our view of the evidence as a whole is that is a reasonable figure for depreciation in value due to the physical factor of noise.

We next have to consider whether that figure falls to be reduced by the overall effects on value attributable to the by-pass under the provisions of section 6.

There was a divergence of professional assessment of this matter. We think it quite plain, as Mr Dewar stressed, that the physical presence of the bund and by-pass to the south of the subjects would have had a significant adverse effect on their value. We accept that they had previously enjoyed an open unrestricted view and that the substitution of the embankment would, taken alone, be found to make the house less attractive and lead to some reduction in value. However, we consider that the presence of the embankment does significantly reduce the impact of the by-pass and its traffic on the subjects. We accept that higher vehicles are visible from the house but the embankment does afford a good measure of privacy to the house and garden ground.

There is no doubt that Hillend as a place is much more attractive since the by-pass opened resulting in the removal of the intrusive through traffic which, until then, was a dominant feature of the village. All of the witnesses agreed with this view. Mr Dewar said that the general amenity of Hillend had improved and houses were easier to sell. It is, of course, true that the property with frontages on Main Street would perceive the greatest benefit. However, we have no doubt that the benefit to the village as a whole would rub off on property values throughout the village. We are satisfied that all the properties would experience significant percentage increases in value. In relation to the particular subjects we have no doubt that a hypothetical purchaser would be prepared to pay substantially more for those subjects lying in an environmentally attractive traffic free village compared to subjects lying some 40 metres from the very heavy traffic flow on a narrow visible street. The value of an open outlook is less certain. It was our assessment that the hypothetical purchaser of subjects such as the properties at Lethamhill Avenue would be less influenced by view than by the benefits of living in a traffic free village. Without attempting to put a figure on it, we are satisfied, on the whole evidence, that, at the valuation date, the increase in the value of the subjects attributable to the by-pass, substantially exceeded £1,000.

This view is supported by the developments in the village since that date. Both surveyor witnesses commented on the new private housing development which had taken place at the west end of the village including that on both sides of Main Street. At our site visit we saw those good quality houses and we are in no doubt that, planning considerations apart, had it not been for the by-pass, such development would have been inconceivable. It is of passing interest that at least one of the new houses on the south side of Main Street is closer to the by-pass than is the claimants' house. We had no evidence as to when these developments started but the potential for them must have been apparent in 1994. The fact that quality housing in a high price bracket has been, and is being, built is confirmation of the improved residential status of the village. The efforts of that more attractive residential environment has and will undoubtedly continue to influence property values in Hillend as a whole including the houses in Lethamhill Avenue.

As we are satisfied that the set-off in terms of section 6 exceeds any compensation which might be appropriate under section 1, the application falls to be refused.

The question of expenses is reserved pending any written representations which parties may wish to make on that matter.