DESCRIPTIVE RUBRIC

COMPENSATION – COMPULSORY PURCHASE – FARM LAND – CERTIFICATE OF APPROPRIATE ALTERNATIVE DEVELOPMENT FOR USE AS A 27 HOLE GOLF COURSE – EXPENSES OF CAAD PROCEDURE – ISSUES OF VALUATION – LAND COMPENSATION (SCOTLAND) ACT 1963, SECTION 12(2)

Danzan Trust and the Dundas Estate v Edinburgh City Council
19 February 2007
LTS/COMP/2005/3

The applicants were owners of land lying to the west of Edinburgh and forming part of the Dundas Estate. The A8000 road split the Estate. For some years the proprietors had been considering plans for use of land to the east of the road for golfing purposes: initially as a driving range and practice facility but latterly with a view to creation of three 9-hole courses spread over 400 acres. After discussion of proposals to upgrade the A8000 by widening and improvement works, a decision was eventually by the Roads Authority to create a new road. This was to run to the east of the A8000 and through the estate land on that side. Land was eventually taken for this purpose under an appropriate Compulsory Purchase Order. There was no dispute that compensation was due for land actually taken and that compensation would also be due for any established diminution in value of retained land. It was accepted, for example, that even if the land was to be viewed only as farm land, compensation would be due for loss of value attributable to restriction in workability of parts. However, the substantive issue between the parties related to loss of the potential use of the land for golfing purposes. The applicants eventually obtained a CAAD confirming that planning permission would have been available for a 27-hole course. Parties attempted to negotiate a value based on the loss of potential development as such a course. However, it was eventually agreed that the domestic market for land for golf would not have paid more than agricultural value at the valuation date. The claim ultimately rested on the applicants’ contention that the land would attract international investors who would wish to develop it as a “trophy course”. It was not disputed that the land could be developed in such a way as to produce a course of championship standard although it was not seen as important that, in the no scheme world, it would have been unlikely to attract any significant championships because of traffic problems. The contention was that a high quality course could be built and that the location was such that the international market would pay for the chance to develop it as a trophy course. Reliance was placed on its proximity to Edinburgh and its views including views of the Forth Road and Rail Bridges. An artificial links course could be built. For the acquiring authority it was contended that there was no evidence of demand for trophy courses adjacent to cities. The main attraction of Scottish golf lay in its characteristic links courses with seaside venues. It was also argued in relation to the expenses incurred in obtaining a CAAD for 27 holes, that if this proved irrelevant to valuation, the applicants should not recover their expenses.

Held (first) on a proper view of all the evidence the Tribunal was not persuaded that the particular location would attract buyers looking for an opportunity to construct a “trophy course”. The claim on that basis failed. The case was accordingly continued, by agreement, for assessment of the price the site might reasonably have been expected to attract on the open market on the assumption that there would have been no demand for use as a golf course at valuation date. (Second) An expropriated party was entitled to a degree of latitude in relation to expense. The expense of the CAAD procedure had been reasonably incurred in the context of attempts to agree a figure.

Cases referred to:

Hull & Humber Investment Co Ltd v Hull Corporation [1965] 2 QB 145
Grampian Regional Council v Secretary of State for Scotland 1984 SLT 212
Purfleet Farms Ltd v Secretary of State 2002 RVR 368
Young v Lothian Regional Council 1992 SLT 18


See full decision:  LTS/COMP/2005/3