DESCRIPTIVE RUBRIC

Disputed compensation – Compulsory purchase – Cemeteries acquired by local authority – Claim for value of land – Claim for extinction of business – Claim for professional fees – Land Compensation (Scotland) Act 1963, section 12-Burial Grounds ( Scotland ) Act 1855

Freshbright Cemeteries Limited v The City of Edinburgh Council
Interim decision - 24 May 1999
Final decision - 19 March 2001
LTS/COMP/1997/4-7

Various cemeteries in Edinburgh had fallen into a poor and deteriorating condition because of neglect by their existing owners. The council accordingly arranged for compulsory purchase orders. Thereafter negotiations proceeded for purchase of the cemeteries by the council. However, in the event six cemeteries were sold to the claimants in April 1992 for a total of £3,000. Following the purchase the acquiring authority gave the claimants, as new owners, an opportunity to improve the condition of the cemeteries. Certain work was done but the acquiring authority eventually decided that because of the continuing unsatisfactory condition of the cemeteries, the compulsory purchase should proceed. General vesting declarations were made in April 1994. Agreements were reached in respect of four of the cemeteries. In respect of the remaining two the claimants sought a total of £380,000 for loss of land and £35,801 for extinction of their business and certain other heads of claim.

Before the Tribunal the main substantive issue was whether or not the council would be able to provide a new cemetery to serve the needs of Edinburgh before the existing cemetery space was exhausted. If they were unable to do so it was accepted that they would require to make use of residual space in the two cemeteries which would, accordingly, have a significant value. The precise value depended upon a dispute as to what was, by modern standards, an acceptable lair size. The larger the lair the fewer graves could be accommodated. There was also a dispute as to the predicted level of expense in the continuing business.

The issues between the parties were issues of fact although there was some discussion of the interpretation of the Burial Grounds (Scotland) Act 1855.

Held (1) on an assessment of detailed evidence that it was established that the acquiring authority, as local authority, would be able to provide adequate additional cemetery facilities to meet modern standards without recourse to the claimants cemeteries and the cemeteries, accordingly, had value only as open public space which was agreed to be at a rate of £500 per acre; (2) in any event, the claimants had over-estimated their potential income, even assuming that no alternative accommodation could be produced, and had under-estimated their expenses. Even if a potential operator had considered that there was a realistic prospect of the local authority being unable to obtain alternative facilities in time, on a realistic assessment of the other disputed issues there was no identifiable prospect of sufficient gain to attract an investor.

Observed: There was confusion in relation to the issue of professional fees. The expense of professional advisers could be a proper element in an appropriate claim to be taken into account as an element of compensation. Although this was often done by casual reference to “the Ryde scale” the distinction between such an element being added to compensation and being part of a claim for the expenses of process might be overlooked. It was important to vouch properly outlays claimed as part of the compensation; to satisfy the Tribunal that the fees were reasonably incurred, and that they were, in themselves reasonable.

No cases were referred to.


See full decision:  LTS/COMP/1997/4-7