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SECOND DIVISION, INNER HOUSE, COURT OF SESSION
[2021] CSIH 32
XA22/20
Lord Justice Clerk
Lord Woolman
Lord Doherty
OPINION OF THE COURT
delivered by LORD WOOLMAN
in the Appeal
by
THE SCOTTISH MINISTERS
Appellants
against
SCOTLAND'S RURAL COLLEGE (SRUC)
Respondents
AGAINST A DECISION OF THE LANDS TRIBUNAL
Appellants: Wilson QC, van der Westhuizen; Anderson Strathern LLP
Respondent: Burnet QC; Brodies LLP
23 June 2021
Introduction
[1]
Over many years planners and road engineers sought to relieve traffic congestion in
and around Aberdeen. They devised a scheme that had two further aims. First, to promote
economic development in the northeast area. Second, to ensure enough housing for an
expected population increase. The scheme's principal element was the "Aberdeen Western
2
Peripheral Route" ("the bypass"). It comprised a 46km stretch of dual carriageway, together
with improved junctions.
[2]
The bypass opened to traffic in 2019. One section was constructed on land at the
Craibstone Estate to the north west of the city. The necessary parcel of land was acquired
using compulsory purchase powers. Subsequently the owner, Scotland's Rural College (`the
college') sought compensation for the loss of the land. It submitted that, if the bypass had
not been built, the estate would have been allocated for housing development, which would
have made it extremely valuable. It advanced three heads of claim:
i
development value
£22.8 million
(or alternatively hope value)
£925,000
ii
injurious affection of the retained land
£500,000
iii
disturbance
£75,000
[3]
The Scottish Ministers refused to pay compensation. They contended that the bypass
was an essential pre-requisite for development at Craibstone. In its absence, the site would
not have been allocated for housing development, or received planning permission.
Further, the land retained by the college had greatly increased in value. Any loss occasioned
by the compulsory acquisition was more than offset. To require the Scottish Ministers to
pay any sums would result in betterment.
[4]
The college rejected that analysis. It raised proceedings in the Lands Tribunal for
Scotland ("the tribunal"). Both parties recognised that the dispute turned on the correct
planning assumptions. They invited the tribunal to hold a preliminary proof. They framed
five questions for it to decide. The core issue was this, would the land at Craibstone have
been allocated for housing if the bypass had not been constructed?
3
[5]
The members of the tribunal held a site inspection before the hearing, which lasted
seven days. The evidence ranged over many issues: planning, transport, economics,
population growth, housing accommodation, and the environment. The witnesses spoke to
their (often lengthy) reports and referred to a sh eaf of technical documents.
[6]
In its judgment, the tribunal found in favour of the college and ordered a proof on
valuation. We shall narrate the content of the questions later in this opinion. At this stage, it
is enough to say it answered questions (1), (2) and (5) in the affirmative and regarded
questions (3) to (4) as redundant in light of their answers to (1) and (2).
[7]
The Scottish Ministers now appeal. They seek orders quashing the decision and
remitting the case back to the tribunal with a direction to reconsider questions (1) to (4).
They take no issue with the answer to question (5). Accordingly it does not figure in the
appeal. We understand that a number of other claims are pending before the tribunal and
that this is a test case.
Background
[8]
An overview of the facts will suffice. The tribunal has set them out in detail in its
judgment.
Craibstone
[9]
The college operates a campus at Craibstone. Following a review, a 2004 report
recommended that it should dispose of surplus land at Craibstone. It then owned land
extending to 208 hectares (515 acres) there. That recommendation bore fruit. Two years
later the college entered into an option agreement with CALA Management Ltd to develop
part of the Craibstone site for housing.
4
Compulsory purchase
[10]
The Scottish Ministers published draft compulsory purchase orders to acquire the
land at Craibstone in 2007. Various objectors (including the college) participated in a public
inquiry that took place the following year. In a written submission, the promoters outlined
the objectives of the bypass as being to:
"Improve access to and around Aberdeen; Improve transport efficiency and
support the industrial areas in the city and the area to the north and west of
Aberdeen (Economy and Employment); Provide traffic relief (including the
removal of long distance heavy goods vehicle traffic) on the existing
congested A90 route through and to the south of Aberdeen (Environment
and Accessibility); Reduce traffic on urban radial routes reducing noise and
air pollution and creating opportunities for pedestrianisation in the City
Centre (Environment and Accessibility); Provide access to existing and
planned park and ride and rail facilities around the outskirts of the City
encouraging modal shift (Integration); Increase opportunities to maximise
bus lanes and other public transport priority measures (Integration); and
Improve road safety over a wide area through the reduction of traffic on
local roads (Safety)."
[11]
The Scottish Ministers issued final compulsory purchase orders in 2010 and took title
on 11 January 2013, which is the relevant date for compensation purposes. After the vesting
date, the Scottish Ministers held about 16 per cent of the site 32.9 hectares (81.3 acres). The
college retained the remaining land 175.1 hectares (433.7 acres).
Planning policies
[12]
Two documents had a major bearing on planning policies at the material time. The
Aberdeen City and Aberdeenshire Structure Plan (2009) set 40,000 persons as the target for
population increase by 2030. It proposed that fifty per cent of the associated housing
development (72,000 houses) should occur within the Aberdeen City strategic growth area.
The plan acknowledged that more than half of the required development within the
Aberdeen SGA would have to take place on greenfield sites. The Aberdeen Local Development
Plan (2012) contained the granular detail. It proposed to concentrate housing in the city and
5
close to main public transport routes. It allocated 4,400 new houses to the Newhills
Expansion Area, which included Craibstone. That included 1,000 houses to be built on the
retained land (i) 750 in the period 2007 2016, (ii) 250 to be built in the period 2017 2023,
and (iii) the remainder in phases on two adjacent sites until 2030.
[13]
There were many other relevant documents, for example the Scottish Government's
Firm Foundations report, the Cumulative Transport Appraisal, the Scottish Transport Appraisal
Guidance, and the Modern Transport System for North of Scotland. All had some bearing on
potential development, the timeline and the relative claims of rival sites.
Planning permission
[14]
In 2014 CALA made a planning application in respect of the retained land. Three
years later it received permission in principle. The planning authority imposed a condition
designed to address traffic safety concerns. It restricted development to 200 houses until a
road junction was opened from the bypass to the Newhills Expansion Area.
Legal Framework
Legislation
[15]
In order to acquire the necessary land from the college, the Scottish Ministers acted
under the Roads (Scotland) Act 1984. It empowers roads authorities to "acquire land
required in connection with the construction, improvement or protection of a public road":
section 104(1)(a). It also governs questions of compensation. In assessing the amount due to
be paid to the dispossessed owner, regard should be had to "the extent to which the
remaining contiguous land belonging to the same person may be benefited by the purpose
for which the land is authorised to be acquired": section 110(4)(a). Section 13 of the Land
Compensation (Scotland) Act 1963 also comes into play: any increase or decrease in value
6
solely attributable to the underlying scheme of the acquiring authority should be
disregarded.
Case law
[16]
This area of the law has a compact body of leading cases: Horn v Sutherland
Corporation [1941] 2 KB 26; Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of
Crown Lands [1947] AC 565; Director of Buildings & Land v Shun Fung Ironworks Ltd
[1995] 2 AC 111; Waters v Welsh Development Agency [2004] 1 WLR 1304; and Bloor v Homes and
Communities Agency [2018] 1 All ER 817. They support the following propositions.
[17]
Compulsory purchase is essential in a modern democratic society because it
facilitates planned and orderly development. The corollary to that power is the obligation to
pay compensation to the dispossessed owner. The overriding principle is equivalence -
owners shall be paid fair compensation, neither less nor more than their loss. There is no
magic formula which determines the correct amount in an individual case. The calculation
involves applying the "no-scheme" rule (also known as "the Pointe Gourde principle"),
which assumes that the scheme had not taken place. The tribunal's specialist experience and
expertise makes it well-equipped to undertake the task. Its findings will not lightly be
disturbed.
[18]
Lord Nicholls of Birkenhead provided further guidance in Waters (at 1319H - 1320A).
He formulated six "pointers" to assist tribunals and courts:
(i)
The no scheme rule should be applied in a manner which achieves a fair and
reasonable result; otherwise it would thwart, rather than advance, the intention of
Parliament.
7
(ii)
A result is not fair and reasonable where it requires a valuation
exercise which is unreal or virtually impossible.
(iii)
A valuation result should be viewed with caution when it would
lead to a gross disparity between the amount of compensation payable
and the market values of comparable adjoining properties which were not
being acquired.
(iv)When applied as a supplement to the relevant legislation, which will
usually be the position, the no scheme rule should be applied by analogy
with the provisions of the statutory code.
(iv)Normally the scope of the intended works and their purpose will
appear from the formal resolutions or documents of the acquiring
authority. But this formulation should not be regarded as conclusive.
(vi) When in doubt a scheme should be identified in narrower rather than
broader terms.
[19]
This short summary highlights that the relevant legal principles are far from being
"hard edged".
[20]
Ms Wilson cited several other cases as illustrative of the operation of these principles,
but readily conceded that each case turns on its own facts.
Tribunal judgment
Five Questions
[21]
The parties asked the tribunal to answer five questions, which we summarise as
follows:
8
1.
In the "no-scheme world", would the retained land have been allocated for
housing development, or have received planning permission for such development
as at the vesting date? Answer - Yes
2.
In the "no-scheme world", would the acquired land have been
allocated in the development plan or have received planning permission for
320 or fewer houses, in addition to any planning permission or allocation
on the land retained land as at the vesting date? Answer - Yes
3.
If the acquired land would not have been allocated for housing development
in the development plan, or would not have received planning permission for such
development at the date of vesting in the no-scheme world, would there nevertheless
have been a hope of achieving such allocation and/or planning permission for any
form of development in the future. Answer - Superseded
4.
If the retained land would not have been allocated for housing
development in the development plan or would not have received planning
permission for such development at the date of vesting in the no-scheme
world, would there nevertheless have been a hope of achieving such
allocation and/or planning permission for any form of development in the
future. Answer - Superseded
6.
At the date of vesting, would the retained land/the acquired land
have (a) been allocated for housing development, (b) received planning
permission for such development, or (c) had a hope of achieving an
allocation and/or planning permission for such development. Answer - Yes
9
The tribunal's task
[22]
It's important to emphasise certain matters. First, the parties prescribed the scope of
the preliminary proof. They invited the tribunal to answer specific (and narrow) questions.
Second,
the tribunal's task was a difficult one. It had to conduct "what if" lines of inquiry.
What would have happened at Craibstone if there had been no bypass? Would any part of
the land have been allocated for housing development? The task can be likened to
counterfactual history.
[23]
We have already referred to the volume of documents. In its judgment the
tribunal
provided a
glossary of acronyms and abbreviations. It referred to some of the documents
contained in that list, but not others. That is entirely unexceptional. All judgments involve
the selection of material. The
tribunal expressly
states that it has attempted "to avoid
discussing ... in excessive detail" the witness reports, which themselves refer to these
documents.
[24]
We also observe that the tribunal's answers were in essence findings in fact. It had to
evaluate many issues and reach a conclusion. That involved (i) identifying the extent and
purpose of the scheme; (ii) determining the extent to which it acted as the key driver for
economic growth in the region; (iii) having regard to the pre-existing housing requirement
and transport constraints; (iv) predicting the outcome of any planning application; and (v)
assessing the claims of rival sites.
Findings
[25]
The tribunal concluded that, in the no-scheme world, the land at Craibstone (both
acquired and retained) "would still probably have been allocated for development along
with the Newhills Expansion Area". In arriving at that view it noted
that Craibstone had a
10
number of advantages. It lies on the urban edge of Aberdeen, where the planners wished to
focus development. The topography of the site lent itself to relatively unobtrusive
development. It had good transport connections, which were capable of further
improvement. Major employment areas lay nearby. A defensible greenbelt boundary could
be created.
[26]
In making its findings, the Tribunal adopted a nuanced approach. It took into
account factors adverse to development. For example, it concluded that the planning
authority's policies favoured development as part of the Newhills Expansion Area,
rather than for a stand-alone site at Craibstone. It recognised that Transport Scotland
would have had concerns about the ability of the existing A90 and A96 trunk roads to
handle the proposed development. It acknowledged that an upgraded road junction
would be required at some stage to accommodate increased traffic flows.
[27]
Having reached its conclusion on housing allocation, the tribunal then took a step
back and applied Lord Nicholls' third pointer
as a cross-check. It decided that its decision
would not lead to gross disparity between
Craibstone
and comparable adjoining properties.
The appeal
Grounds of challenge
[28]
The Scottish Ministers submit that the tribunal erred in law in three respects. (1) It
failed to discharge its duty under section 110(4) of the 1984 Act. (2) It made fundamental
errors when concluding that in the no-scheme world both the retained land and the acquired
land would have been allocated for development. (3) It reached an irrational and illogical
conclusion in holding that the acquired land would have been allocated for housing
11
development. Each of those grounds is split into sub-headings. The grounds overlap to a
significant extent.
Error of law?
[29]
A query immediately arises. Do these grounds identify an error of law? Mr Burnet
submitted that they do not. They are simply a quarrel with the tribunal's findings.
[30]
Ms Wilson rejected that characterisation. She relied on Advocate General for Scotland v
Murray Group Holdings Ltd 2016 SC 201 (at paras 42-43) as authority for the proposition that a
tribunal may err in law in one of four respects. It may make a mistake on the general law,
wrongly apply the law to the facts, make a finding for which there is no evidential basis, or
adopt a fundamental error in its approach to the case (for example, by asking the wrong
question, taking account of irrelevant considerations, or arriving at a perverse decision) .
[31]
It's convenient to decide this argument by examining the strand of each ground in
turn.
Ground 1- Did the tribunal err in law in its general approach?
[32]
Put short, the Scottish Ministers submit that the tribunal (i) failed to have due regard
to all the relevant documents, (ii) failed to apply the relevant case law to the facts, and (iii)
reached the wrong findings in fact.
[33]
We are satisfied that the tribunal took into account the relevant documents. It listed
most in its glossary. It did not require to analyse and discuss each one. Otherwise an
already long judgment would have become unwieldy. It rightly exercised discrimination.
[34]
Ms Wilson did not dispute the relevant legal propositions (see para 17 above). We
discern no flaw in the tribunal's application of them. It rightly held that it had to focus on
the facts of the present case. Recourse to other cases decided on different circumstances was
unlikely to assist.
12
[35]
As to the third strand, in our view the Scottish Ministers are attempting to convert a
dispute with the findings of fact into errors in law. In effect they are seeking a rehearing.
[36]
That's clear from a list of their contentions. They argue that the tribunal (i) did not
properly address the evidence relating to the objectives and purpose of the bypass; (ii) made
erroneous findings about the potential planning benefits; (iii) failed to address the inter -
relationship between planning and transport; (iv) placed too much reliance on the objectives
stated to the public inquiry; (v) conflated its findings on the purpose and extent of the
bypass scheme with those as to the scale and location of housing allocations in the no-
scheme world; and (vi) wrongly interpreted the 2017 planning condition restricting
development until the construction of an access junction to the site.
[37]
On a fair reading of the judgment the tribunal undertook a thorough evaluation of
the evidence. It did not ignore documents. Questions of weight were pre-eminently matters
for it to assess using its experience and expertise. We would also point out that planning
policy documents are often drawn in wide (and sometimes aspirational) terms. We are not
persuaded that the tribunal wrongly interpreted the 2017 planning condition.
[38]
Accordingly we reject the first ground of appeal. We are satisfied that the tribunal
properly applied the terms of section 110(4).
Ground (2) The fact finding process
[39]
The second ground is essentially a reformulation of the first. The Scottish Ministers
contend that the tribunal made fundamental errors in reaching its findings. We reject that
submission for the same reasons that we reject the first ground.
[40]
Here it's convenient to address two specific points made by the Scottish Ministers.
First, they argue that the tribunal wrongly had regard to the third Waters' pointer. We
disagree. As the term itself suggests, it is a guideline not a rule. In any event the tribunal
13
only used it as a cross check. Further, the Scottish Ministers themselves relied on the
pointers (other than the fourth) in their closing submissions to the tribunal.
[41]
Next they argue that the tribunal misinterpreted the condition attached to CALA's
planning permission. Again we disagree. The tribunal was entitled to reach conclusions
about the likelihood of development based on the interaction of a number of factors.
Ground of appeal (3) Housing allocation to the acquired land
[42]
The thrust of this ground largely runs parallel to the earlier grounds. The Scottish
Ministers maintain that the tribunal's decision was irrational.
[43]
We arrive at the opposite conclusion. In our view, the tribunal's reasoning was
securely based. It considered housing development in terms of the 2012 local plan . It
concluded that the position of the retained land would not have altered in the no-scheme
world. It was entitled to conclude that the acquired land would have been treated in a
similar fashion. Its decision was logical and reasonable.
[44]
We add this. The tribunal found that in the no-scheme world the contiguous
retained land would have been allocated for housing development, so that its allocation for
housing in the scheme world is not betterment. It remains possible that there are other
respects in which the retained land benefited from the scheme. However, that was not an
issue which the tribunal was asked to determine at the preliminary proof.
Conclusion
[45]
We refuse the appeal, adhere to the decision of the tribunal and reserve all questions
of expenses.
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