Lands Tribunal for Scotland

OPINION

George Wimpey East Scotland Limited
v
Fleming and Others
(Compensation)

Summary

In this application for an order varying a servitude right of access so as to alter the route of an access road to facilitate a housing development, the Tribunal has already decided that the application succeeds under the provisions of Section 98 and 100 of the Title Conditions (Scotland) Act 2003 (“the Act”). The respondents have sought awards of compensation under Section 90(6) and (7) of the Act. As developed, their claims are for compensation for loss or disadvantage during the development works rather than for any diminution in value of their properties. Even on that basis, however, the Tribunal has not been satisfied that the respondents will suffer any substantial loss or disadvantage as owners of the benefited properties in consequence of the variation order. The Tribunal must therefore refuse the claims for compensation and proceed to make the order varying the access rights in accordance with our previous decision.

The Issue

As narrated at more length in the Tribunal’s Opinion dated 12 January 2005, the subjects comprise land which is the subject of detailed planning permission for housing development. The respondents are individual house owners who have a heritable servitude right of pedestrian and vehicular access and egress to and from their properties over the subjects by an access road with a delineated route. The present access road is an existing concreted road running along the side of the field on which the development is to take place. The application which the Tribunal decided to grant is for variation to an alternative delineated route following an estate road through the development, i.e. a slight diversion of the present route. Although this application was lodged under the previous legislation, before the Act came into force, it is not in dispute that the provisions of the Act (which in any event substantially reproduce the previous provisions) apply to the issue of compensation. The claims of the respondents, which raise identical issues, have to be decided in accordance with Section 90 of the Act, which (as amended by the Title Conditions (Scotland) Act 2003 (Consequential Provisions) Order 2003) provides inter alia as follows:-

“90(6) … an order … varying a title condition may –

(a) … direct the applicant … to pay to any person who in relation to the title condition was an owner of the benefited property … such sum as the Lands Tribunal may think it just to award under one, but not both, of the heads mentioned in subsection (7) below.

(7) The heads are –

(a) a sum to compensate for any substantial loss or disadvantage suffered by … the owner, as owner of the benefited property in consequence of the … variation.”

Authorities referred to

Caledonian Railway Co. v Walker’s Trustees 1882 9R (H.L.) 19
Wildtree Hotels Ltd and Others v Harrow London Borough Council [2001] 2 A.C. 1
Smart v Myerscough & Others, LTS/LO/2001/32, 33 – 1.3.2002, unreported
Rowan-Robinson, Compulsory Purchase and Compensation, 2nd Ed’n, page 345

Procedure

The applicants are George Wimpey East Scotland Limited as owners of the subjects under a Disposition dated 16 April 2004. The respondents William Fleming and 14 others are all the proprietors of a steadings development, Hallhill Steading. They resisted the application on its merits and now claim awards of compensation.

Donald Grant and Elizabeth Hutton are the proprietors of another dwellinghouse, Hallhill Farmhouse, and are also benefited proprietors who are identically affected. They did not initially enter any objection or representations in relation to the application. They sought, however, also to claim compensation. By letter dated 2 February 2005 they explained the circumstances in which they did not previously enter appearance and requested that any compensation award should apply in their favour also. The applicants, while pointing out that these proprietors had not entered appearance, did not offer anything other than formal opposition to their being allowed to enter appearance late. The Tribunal has a discretion, specifically recognised in Section 96(3) of the Act, to accept late representations. In the particular exceptional circumstances we decided to do so as to allow Mr Grant and Ms Hutton also to maintain claims for compensation.

All 16 claims for compensation, which were resisted in their entirety by the applicants, were considered together, on the basis of a written Claim and Answers, oral and written evidence, and submissions, at a hearing on 15 April 2005. The applicants were represented by Mr Stewart, Solicitor, and all the respondents making the claim by Mr Fleming, one of their number. Mr Fleming gave oral evidence, as did Mr Tait, who since the previous hearing has retired as the applicants’ development director but was authorised to continue to represent their position in the matter. The Tribunal is obliged to both Mr Stewart and Mr Fleming for their moderate and concise presentations. The Tribunal has made a further unaccompanied site inspection.

The Circumstances

We refer again to our previous Opinion, in which we made various findings-in-fact, in particular in relation to the access road as it presently exists and the so-called ‘Part 1 Diversion’, which is included in the applicants’ detailed planning permission and which involves closure of the existing access road and variation of the servitude right of access.

The existing access road is approximately 500 metres long and about 2.48 metres wide and has a concrete surface. It formerly provided access directly to the A1 trunk road to the south of the benefited properties. More recently, improvements to the A1 have involved re-alignment so that the link is presently with the old road, along which it is necessary to travel for half a kilometre to the west before being able to join the re-aligned A1 road. It is envisaged, however, that some time after the distributor road leading into the development from the east side is complete the link to the old A1 will be stopped up, so that access to the benefited properties as well as to the housing development will be obtained by that distributor road. The section of the access road involved in the proposed stopping-up is, however, to the south of the subjects and the application which the Tribunal is granting involves only the diversion of the access route through the subjects, i.e. through the housing development itself.

Large areas of former farm land between the main road and the benefited properties have either been developed already or are zoned for further housing development. The particular development with which this application is concerned will take place on and immediately to the west of the access road affecting approximately the middle 300 metres of it. The distributor road leading in from the east will cross the line of the access road at the southern edge of the site. An estate road will meet the distributor road at a T-junction about 30 metres to the west of the existing access road. Within the development, that estate road will replace the existing access road, which will, once the alternative access route is available, be incorporated into the rear gardens of one row of new houses fronting onto the estate road. The estate road will link back to the access road at the north-east corner of the site, the remaining 100 metres or so leading to the steading development being unaffected. Hallhill Farmhouse is situated a short distance further up the access road to the north. The estate road will be 5.5 metres in width with pavements, lighting and speed bumps. The additional distance involved in this diversion from the original route will be about 140 metres. The distributor road and the estate road, and pavements, will be surfaced in tarmacadam and built to an adoptable standard. Adoption of these roads will occur 12 months after they have been completed to a satisfactory standard. As the respondents acknowledged, we found following the first hearing that the proposed alternative access route, using the estate road through the development, will be at least comparable in quality and convenience with the existing access road. The respondents also accepted that considerations of the attractiveness and amenity of the alternative route were not relevant.

As far as the sequence of construction works affecting the access route is concerned, the applicants’ intention is to follow a particular sequence of events before the existing access road is taken into the development and ceases to be available to the benefited proprietors. The applicants will construct and complete the 13 houses to the west of the estate road; they will construct the service links to the plots to the east of the estate road; they will erect security fencing along the eastern side of the estate road; and they will construct the estate road. While these works are proceeding, the existing access road will continue to be available to the respondents but will not be a route for construction traffic. Once these works are completed, the estate road will be open for public use and will thus be available to the benefited proprietors in replacement of the existing route. The existing access road will then no longer be available to the respondents and will be used for access to the plots to the east of the estate road to enable those houses to be constructed. Thereafter, the surface of this stretch of the access road will be removed and the areas occupied by it incorporated into the gardens of these houses on the east side of the estate road. Access by construction vehicles and plant to the plots and houses on the other parts of the site, at the north end and on the west side, will not be over this estate road (there being another planned road, further to the west, leading off the distributor road into this development). Thus during neither phase, the phase when the existing access route is still in use and the phase when it is no longer available but the completed estate road is, will construction vehicles and equipment be making use of the route in use for access to the benefited properties. Subject to progress on sales, the new estate road forming the alternative access route will be available for use some 12 to 18 months after these works commence. When it is initially opened, however, although it will be tarmacadammed, this will only be with the ‘base course’. The final, ‘wearing course’, the top 25 to 30 millimetres of asphalt, will not be applied until completion of all the houses on both sides, just prior to adoption.

During the period when the existing access road is still in use but is crossed by the distributor road, a traffic management plan will be in place. Traffic on the distributor road will be required, by means of appropriate traffic signs, to stop and give way to traffic using the existing access road (which will during this period still be able to cross the distributor road). A portion of a stone wall on the east side of the access road and to the north of the junction with the distributor road will be removed during this phase to improve the sight lines at that junction.

The existing access road is a single track road with just two passing places. Users of the road are occasionally inconvenienced by traffic travelling in the other direction. Despite the sequence of works described above, it is likely that such inconvenience will occur rather more often during the construction period. Given that sequence, however, this will not be a constant consequence of the works. Situations are likely to occur from time to time in which the driver of a vehicle stopped on the access route may be temporarily out of the vehicle. Some inconvenience appears likely during the road construction works at the crossing at the south end of the site and the point at which the estate road is linked back to the access road. Some damage to the concrete surface of the access road is likely, particularly in the vicinity of crossings – some small potholes have already opened up at a point on the access road to the south of the subjects. It is the responsibility of the applicants to maintain the access road. The benefited proprietors will not incur any costs as a result of that.

Good practice requires housebuilders to notify affected neighbouring owners in advance of the commencement of particular phases of works. The applicants have on two recent occasions failed to do so.

Submissions

For the respondents, the claimants for compensation, Mr Fleming made clear that it was no longer contended that there was loss in the form of diminution in value of the benefited properties. There was, however, nothing in the statutory provisions which made compensation depend on that, and the respondents founded particularly on ‘disadvantage’ as a consequence of the variation. In the light of the Tribunal’s previous finding that the existing access road was not compatible with a development which would satisfy the planning authority, it followed that the development and anything that followed from it would be consequences of the variation. The respondents accepted that the Tribunal had found in effect that there would not be any permanent loss or disadvantage. That left the question of loss or disadvantage during the time between the work starting on the new estate road and the adoption of that road some time after completion of the houses.

The respondents considered that their right of access would be impaired, firstly, prior to the variation taking effect, when access to the new road would for the most part be via the existing access road; secondly, after the variation took effect, when the re-routed access would run through a building site for 26 houses; and thirdly, following completion of those houses, when work on further houses, to the west, would be in hand. During each of these phases, the respondents believed that they would have to share parts of the road with traffic and activities associated with construction of the development, including heavy vehicles and other heavy plant and equipment. The sequence of events spoken to by Mr Tait did not provide much comfort, being entirely dependent on their commitment. They could argue that circumstances would change. The applicants had not put this in writing, had not met with the proprietors about it and indeed had presented it at the hearing without any prior notice. The traffic management measures relied heavily on the stopping power of signs. There was clearly disadvantage. As to whether this was ‘substantial’, timing was an important aspect. 10 to 12 months’ interference with access to the respondents’ homes was substantial. The matter was compounded by uncertainty both as to the duration and also as to the exact conduct of the developers and the day-to-day management of the site.

On the amount of compensation, the respondents were, said Mr Fleming, presenting an amount proportionate to the disadvantage. They had had regard to the advice of Mr Raworth (a consultant surveyor who had submitted a written opinion) and also to statements on the applicants’ behalf at the previous hearing, when they had appeared willing to contemplate paying compensation. A figure of £4,000 per claimant was reasonable.

For the applicants, Mr Stewart said that the normal basis of compensation was diminution in value. This claim was unusual. Mr Stewart, however drew attention to passages in Rowan Robinson, Caledonian Railway Co v Walker’s Trustees and, most particularly, the decision of the House of Lords in Wildtree Hotels Ltd and Others, in which it had been held that a claim for compensation for injurious affection would not fail merely because the damage to the claimant’s land was temporary. Although that case arose under a different statutory provision, Mr Stewart accepted that such a claim could arise under this jurisdiction and could in theory relate to the future rather than the past as in Wildtree. However, the onus was on the respondents as claimants.

On the merits, Mr Stewart invited the Tribunal to accept the evidence of Mr Tait as regards the sequence of works. On that basis, the facts of this case were very different from those in Wildtree and it had not been established that the respondents would suffer any ‘substantial’ loss or disadvantage.

Tribunal’s Consideration

This is an unusual claim in the context of variation or discharge of ‘land obligations’ under the Conveyancing and Feudal Reform (Scotland) Act 1970 or ‘title conditions’ under the 2003 Act. Section 90(6) and (7) of the 2003 Act is in essentially similar terms to the corresponding provision in Section 1(4) of the 1970 Act. The approach of the Tribunal to date has been to look for some effect on the capital value of the benefited properties, or perhaps an amount which the owner might pay, or additional amount which any purchaser might pay, to secure the benefit of the right which is being lost by the Tribunal’s order. The Tribunal has rarely, if ever, been faced with claims in respect of purely temporary damage, not having such an effect, and there is no reported award of this nature. This may have been because of the statutory requirement that the Tribunal must be satisfied that any loss is ‘substantial’.

Mr Stewart, however, very fairly drew the Tribunal’s attention to the decision of the House of Lords in Wildtree and, without analysing the precise provisions of Section 90 of the 2003 Act with which we are concerned, accepted that a claim in respect of temporary damage could arise under this jurisdiction. He resisted the claim simply on the basis that in the circumstances of this case, being very different from those considered in Wildtree, it could not be said that there was ‘substantial’ loss or disadvantage to the benefited proprietors.

For their part, the respondents also presented a very restrained case. In both their written and their oral submissions, they suggested that the applicant’s whole development was a consequence of the variation order, because the variation had been found necessary for the development to proceed. In fact, however, they based their claim on their understanding, and to some extent apprehension, as to the extent of the effect on their exercise of the access right during the construction works. Accepting that the applicants intended to follow the sequence of works which Mr Tait described, the respondents argued that there was no certainty as to this and with the best will in the world in such circumstances there was bound to be interference with their access causing ‘substantial’ disadvantage.

The parties are thus apparently at one on the principles and in disagreement only as to whether there is ‘substantial’ loss or disadvantage. Neither side explored the meaning of ‘substantial’.

The Tribunal is prepared to decide the claims on that basis because, for reasons which we shall explain, we agree that under this jurisdiction, as well as under the jurisdiction which enables land owners affected by compulsory purchase to claim for ‘injurious affection’, the fact that the damage to the owner’s interest is only temporary and there is no permanent diminution in value should not of itself be a bar to compensation. We do, however, have reservations, on which we wish to comment, as to the application of the provisions of Section 90(7) of the 2003 Act in claims of this kind.

The respondents are clearly going to be ‘put upon’ to some degree by the construction works affecting the access road. We have no difficulty in describing this as a form of ‘disadvantage’ which they will suffer as a result of the alteration to the access route. It would be attractive to award them some compensation, particularly having regard to the various references to compensation which the applicants have made at earlier stages. However, on the evidence, and treating the matter simply as a question of degree, we are unable to accept that this disadvantage is ‘substantial’. In our judgment, it can really only be regarded as an increase, perhaps quite a large increase, for a period of around one year in the number of times they will be inconvenienced in their use of the access road: something they could no doubt well do without, but not something which would normally attract legal consequences and not something which in our view can properly be characterised as ‘substantial’. On any view of the meaning of ‘substantial’ this claim does not get over that hurdle. At the very least, ‘substantial’ must mean more than de minimis, and we are afraid that, annoying as the occasional inconvenience here will be, we cannot regard it as the sort of matter which satisfies even that test. We do not consider that inconvenience from time to time over that sort of period on part of the access route to a dwellinghouse, some 100 metres and more away from the house, is the sort of loss or disadvantage which is covered by the legislation.

In reaching this view, we have accepted, as a matter of probability, the applicants’ evidence as to the sequence of works and therefore as to the nature of such inconvenience as will from time to time occur.The respondents contended that this was merely the applicants’ intention and, in short, there was no certainty about it. We can quite see that there will be some inconvenience, and we can in the circumstances understand the respondents’ suspicions, but it seems to us unlikely that the applicants will depart from the basic work sequence. It is within our experience that housebuilders tend to work to a planned sequence, depending on various considerations at any particular site. It seems to us to be strongly in the applicants’ interest to do so in the manner described in the situation, as here, where there is a requirement to keep a route for ordinary traffic proceeding through the site open throughout: Health and Safety considerations, and other construction site regulations were referred to, though not in any detail; there are also planning conditions in relation to preservation of the respondents’ access; and it can also be pointed out that were the applicants to depart from the scheme which they explained and commence accessing building works with heavy vehicles and construction plant and equipment from whichever access route was in use they would be opening themselves up to enforcement action by the respondents. It simply makes sense to us that, as a basic working scheme, the construction traffic should be kept off the access road.

We take into account the traffic management issue, and indeed it seems to us likely that the crossing point at the south of the site will be the most difficult point and the point where inconvenience is most likely to occur from time to time. We do recognise that there will be occasional problems. We also have in mind the duration of such problems, and indeed in our findings we have adopted a slightly longer period, 12 to 18 months, than the applicants’ 10-12 months, again simply as a matter of assessing the probabilities. However, we simply do not think that the sum of these temporary problems over that sort of period adds up to substantial loss or disadvantage resulting from the variation of the access route. On our assessment of the probabilities, we are not dealing with any closure of the access route or ongoing obstruction of it by construction vehicles and equipment, merely with a degree of inconvenience from time to time. On that basis, we must refuse these claims.

As we have indicated, we have some further reservations about claims related to temporary damage under the particular provisions of this jurisdiction. Apart from the hurdle created by the ‘substantial’ test, it appears to us that such claims may be expected to face a number of difficulties.

We accept that temporary damage may lead to compensation under this jurisdiction because it seems to us that the reasoning of their Lordships in Wildtree, explained by Lord Hoffmann, applies equally here. He pointed out that as there was nothing in the statutory provision there in issue – Section 10 of the Compulsory Purchase Act 1965 – which said that compensation must be assessed by considering the capital value of the claimant’s land at a given date and deducting that sum from its estimated value if it had not been injuriously affected, there was no reason why the effect which the compensatable event has had should not be calculated in a different way, by considering its effect for a period on letting value. The same reasoning seems to us applicable here: as Mr Fleming correctly pointed out, there is also no such limitation of the manner of calculating compensation in the present provisions.

It should be noted, however, that the alternative way of measuring loss approved in Wildtree involved demonstrating that there had been a period during which the letting value of the property had been reduced. In other words, the claim was still related to the value of the property. We do not in this case require to express a concluded view on whether that is essential or whether the concept of ‘disadvantage’ might be satisfied in another way. However, the provision with which we are concerned requires loss or disadvantage suffered by “the owner, as owner of the benefited property” (in the 1970 Act, “by the proprietor as such benefited proprietor”). This clearly rules out purely personal loss or disadvantage and requires the loss to be suffered by the claimant as proprietor. As the Tribunal put it in a recent case, Smart v Myerscough & Others:-

“… we are not to attempt to compensate the existing proprietors for the personal effects of discharge as perceived by them”

Further, the loss or disadvantage has to have been suffered “in consequence of the discharge”. This may produce a causation difficulty, although the moderation with which the respondents presented their claim has meant that it did not in the event arise in this case. The respondents contended both in writing and orally that the development itself, because it faced a planning impasse if the access route was not altered, was a consequence of the variation. Although we appreciate the logic, we very much doubt whether this is correct. To compensate a benefited proprietor in respect of enabling the whole development, or even the temporary effect of the construction of the whole development, because the title condition actually impeded the development, seems to us to come close to compensating for loss of a ransom value. It seems to us that the statute provides for compensation for the effect on the benefited proprietor of the discharge or variation itself, not for the effect on him of the development made possible. The extent of the effect of the discharge or variation will, however, depend on the intention or purpose of the burden.

There is another causation difficulty in the circumstances of the present claim. The order which we are making in this case is for variation of an access right. The respondents as proprietors will, both before and after the change in the route, be entitled to access. Our order does not authorise any failure to allow access. Damage caused by improper interference with it would not be a consequence of the variation. A similar rule applies in the field of ‘injurious affection’ : it is injury caused by the legitimate exercise of statutory powers, not any inadequate or improper way of carrying them through, which is compensatable in this way. The proprietors of course retain their right to enforce this access entitlement in the ordinary court should that prove necessary. In making this comment, we appreciate that the respondents were not suggesting that the applicants would act improperly, but we do find it difficult to imagine a situation in which a right such as this is complied with through the construction period yet there is ‘substantial loss or disadvantage’. The situation in relation to discharge, for example of a building restriction, might be different: as soon as the building commences, all the works, however carefully carried through, might be a consequence of the discharge.

Decision

We have refused the claims for compensation and proceeded to make the Tribunal’s order varying the servitude rights in accordance with our Opinion dated 12 January 2005. Any question of expenses which may be raised will be considered on the basis of parties’ written submissions in accordance with the Tribunal’s normal practice.

LTS/LO/2004/19


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland given and intimated to parties on 5 May 2005.

N M Tainsh — Clerk to the Tribunal