Keen & Anor v Worchestershire County Council [2001] EWLands LCA_44_2001 (26 November 2001)

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[2001] EWLands LCA_44_2001 (26 November 2001)

LCA/44/2001

LANDS TRIBUNAL ACT 1949

COMPENSATION - Land Compensation Act 1973, Part 1 – residential dwelling – injurious affection – effects of noise, dust and fumes following construction and use of the Broadway by-pass – compensation awarded £1,500

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN MR A & MRS S KEEN Claimants

and

WORCESTERSHIRE COUNTY COUNCIL Respondent

Re: 53 Sandscroft Avenue, Broadway, Worcs, WR12 7EJ

Tribunal Member: P R Francis FRICS

Sitting at: The Town Hall, Evesham, Worcs

on

7 & 8 November 2001

The following cases are referred to in this decision:

Horton and Griffin v Worcestershire County Council (2001) (LT) LCA/64&66/2001(Unreported)

Douglas Readings of counsel, instructed by Stephensons, solicitors of Brierley Hill, West Midlands, for the claimants

Leslie Blohm of counsel, instructed by Legal Services, Worcestershire County Council, for the respondent Council

DECISION

This is a reference to determine the compensation payable to Mr and Mrs A. Keen ("the claimants"), owners of 53 Sandscroft Avenue, Broadway, Worcs ("the subject property") by Worcestershire County Council ("the Council") under Part 1 of the Land Compensation Act 1973 ("the 1973 Act") following the coming into use of the Broadway by-pass ("the by-pass").

Mr. Douglas Readings of counsel appeared for the claimants and called Mr. Arthur Keen, who gave evidence of fact on behalf of himself and his wife, and Mr. Stephen Hinton BSc MRICS a chartered surveyor practising on his own account as Stephen W Hinton, who gave valuation evidence. Mr. Leslie Blohm of counsel appeared for the Council and called Mr. James Prendergrast BSc (Hons) MRICS, a chartered surveyor, and a Principal Valuer with the Council.

The parties had prepared a statement of agreed facts from which, together with the written and oral evidence, and my inspection of the subject property and comparables on 8 November 2001, I find the following facts:

3.1 The scheme, the use of which formed the basis of the claim, was known as the Broadway By-pass and was constructed under the Hereford and Worcester County Council (Broadway By-pass) Compulsory Purchase Order 1994. The respondent Council is the successor Authority to Hereford and Worcester County Council. The by-pass was completed and opened to public traffic on 11 May 1998, thus being the relevant date under section 1(9)(a) of the 1973 Act.

3.2 The 'first claim day' under section 3(2) of the 1973 Act is twelve months from the commencement of the public use of the highway, and 11 May 1999 is therefore the valuation date. Compensation, if any, is to be assessed by reference to prices current on that date (section 4(1) of the 1973 Act).

3.3 The Sandscroft estate is a large, mainly inter-war (and part early post-war) Local Authority development of about 300 properties, principally comprising semi-detached houses together with some flats, and is located on the north-eastern edge of Broadway village. Sandscroft Avenue forms part of the outer perimiter road on the northern edge of the estate and the subject property lies on the northern side of the road, thus having extensive rural views to the rear. A large proportion of the properties on the estate have been acquired by the former tenants under the local Council's Right to Buy scheme.

3.4 No 53, which the claimants purchased from the local Council in 1981, comprises a semi-detached house constructed of brick under tiled roofs and to which a two-storey extension has been added to the rear. It is linked to the adjacent property, No 51, by the entrance porch. Gas-fired radiator central heating is installed, there are modern uPVC replacement windows and it is in good decorative order. The accommodation comprised, at the valuation date, porch, hall, re-fitted kitchen, dining room and full-width living room on the ground floor, together with 3 bedrooms and a bathroom at first floor. A balcony has been incorporated off bedroom 1, approached through wide, sliding patio-doors. There is a small front garden, with off-road parking for 1 vehicle and a long, narrow rear garden with timber summer-house. The garden backs directly onto a field which separates the property from the by-pass, the centre-line of the new road being 176 metres from the rear wall of the house.

3.5 The surface of the by-pass is not visible from the property, and the cutting through which it passes at right angles to the back of the house is also obscured by the topography of the field which rises slightly at that point. Only the post and rail fence at the top of the cutting is evident, but the tops of high-sided vehicles can be seen to left and right as they enter and exit the cutting.

3.6 Noise readings on the L10 18 hour scale (expressed as dB(A)) were taken by the Council in 1997 at nearby houses, but not subsequently. It was agreed during the course of the hearing that the appropriate levels for the subject property were 46 dB(A) at 1997, 46 dB(A) predicted for 2012 on the 'do minimum' scale and 53.5 dB(A) on the 2012 'do something' scale. The 'worst case' predicted increase was therefore 7.5 dB(A).

3.7 Claims for compensation were submitted by two separate firms of surveyors on behalf of the claimants in May 1999, and following failure to agree compensation, the second claim (dated 19 May 1999) was taken over by Mr. Hinton, along with in excess of 50 others relating to the scheme that had previously been submitted by Messrs John Sanders.

3.8 Notice of Reference in this case was dated 2 April 2001, and the experts have agreed that my determination is likely to form the basis for negotiations in respect of the other claims on the Sandscroft estate. In this regard, Mr. Hinton has indemnified the claimants, verbally, in respect of any costs in the reference that they might incur. This is a matter to which I refer later in this decision.

3.9 It was agreed that the "physical factors" for which compensation may be payable are noise, dust and pollution from traffic using the by-pass. The value of the subject property, absent the by-pass, or any proposals for it, was agreed at £82,500.

ISSUE

The only issue for my determination is the amount by which the open market value of the freehold interest in the subject property may have been diminished by the physical factors referred to in para 3.9 above.

CLAIMANTS' CASE

Mr. Keen is a retired baker who formerly ran a shop in the centre of Broadway, and has lived at the subject property for 38 years. He said that the property's major asset was, and still is, the magnificent and until recently, uninterrupted rural aspect to the rear. Whilst the views were still superb, and the construction of the by-pass had not resulted in them being curtailed, high-sided vehicles could now be seen entering and leaving the cutting that was immediately behind his house. However, it was the atrocious noise levels, especially between 7 and 10am, in the early evening and even more so at weekends, that were the principal cause for concern.

Mr. Keen said that, during the summer, he and his wife used to enjoy sitting in the garden or the summerhouse, watching the wildlife and admiring the views, but the constant noise, especially from motorcycles and lorries using the 'crawler lane' on the by-pass had seriously curtailed that enjoyment. What had been a haven of tranquility in a busy world had now been ruined by the noise, and in some instances, fumes from the by-pass. The noise that was now being suffered was irritating and something that he could not get used to, having never before had to live with traffic noise like that.

In cross-examination, Mr. Keen accepted that any visual intrusion caused by being able to see vehicles using the by-pass was not a matter for which compensation under Part 1 of the 1973 Act could be claimed. He said that he had been an active objector to the by-pass ever since the scheme was announced, and stressed that whilst those who owned properties in the centre of the village, especially the upper High Street that was now a cul-de-sac, might have benefited from the scheme, this had been at the expense of those who lived on the edge Broadway, and who were now adversely affected.

Asked about where, within the house, the noise was most intrusive, Mr. Keen said that it could be heard in both of the two largest bedrooms, and particularly from the balcony off the main bedroom. It could also be heard from the dining room, even with the double-glazed patio doors closed if the traffic was particularly busy, or the wind was in the right direction. He said that some of the noise was deadened where the traffic passes through the cutting, but increases as the traffic emerges on either side.

The fact that the original claim submitted by Messrs John Sanders in May 1999 was for £20,000, the Notice of Reference submitted to this Tribunal referred to £7,500 and the sum of £2,500 was now being claimed was, Mr. Keen said, nothing to do with him. He was relying upon the professionals from whom, at one stage, offers to act in respect of compensation claims were landing on his doormat 'two-a-penny'. In response to a question as to whether he had been made aware of his potential liability for costs in respect of this reference, he said he had not, and there was no agreement between him and Mr. Hinton in respect of fees. Whilst he was aware that Mr. Hinton was acting in respect of a large number of other claims on the estate, he did not know what the arrangements were for Mr. Hinton to be paid. Mr. Keen said he understood that he had been 'chosen' as a sympathetic or suitable individual to have his property used as a 'test case' in respect of compensation on the estate generally.

Mr. Hinton is a chartered surveyor practising on his own account from Kidderminster, Worcs, and specialises in compensation matters which make up in excess of 50 per cent of his professional work. He said that, following an approach from Messrs John Sanders, of Bromsgrove, who had submitted Part 1 claims on behalf of many Broadway residents but had been unable to agree compensation, he was personally funding the reference to this Tribunal on a contingency basis. He acknowledged that, if he was successful, the compensating authority would pay his fees under Ryde's Scale, but if he was not, then he would make nothing out of it. He said that if Mr. Keen had not been prepared to take this claim to the Lands Tribunal, nobody else for whom he was acting would, with the result that the Council would get away with paying less compensation than was deserved. Mr. Hinton said, in cross-examination, that he was not funding this case as a 'loss-leader' in order to potentially make money on all the other claims, but was doing it as a matter of principle.

Having settled a number of claims with the Council under the same scheme on the nearby Smallbrook Road development, Mr. Hinton said he had anticipated that similar levels of compensation might be agreed on the Sandscroft Road estate, but that had not proved possible. It was his professional opinion, based upon a limited number of comparable transactions on the Sandscroft estate, and the settlement evidence from Smallbrook Road and other schemes that the diminution in value attributable principally to noise, but also to a limited degree from dust, pollution and litter was £2,500. Subsequently, in cross-examination, he accepted that settlement evidence from other schemes was not helpful and that no material part of the diminution was caused by litter, dust or fumes.

As to comparable sales, Mr. Hinton said that 37 Sandscroft Avenue had sold in October 2000 for £97,500. This was a 3 bedroom un-extended semi-detached house on the same side of the road but marginally further away from the by-pass and closer to Leamington Road. At the valuation date it had a single garage (which has since been removed) and a similar aspect to the rear over open countryside. Whilst it was also affected by noise from the by-pass, traffic noise from Leamington Road could also be heard. That road was also busier as it now forms one of the two main roads into the village from the by-pass. In his view, Mr. Hinton said, there was a substantial premium for properties on the outside of the perimeter road due to the views, but this premium had been affected by the noise from the by-pass.

60 Sandscroft Avenue was a 2 bedroom semi-detached house on the opposite side of the road to the subject property, thus being on the 'inside' and not enjoying the rural views. It had a large attached garage and had sold in April 2001 for £93,950. Even allowing for house price inflation over the period, Mr. Hinton said he considered that property also supported the principle of the claim.

Mr. Hinton said the settlements on Smallbrook Road were the most appropriate way of establishing the correct level of compensation on the subject property, as analysis of those settlements in terms of distance from the by-pass, aspects and sound levels allowed a more precise valuation to be achieved. The houses there were not dissimilar to the subject property, being semi-detached, of similar style with comparable plot sizes and of similar value. Whilst it was accepted that they were not ex-local authority houses, Mr. Hinton thought they had probably been constructed by another statutory authority such as the police or fire service.

Smallbrook Road was a cul-de-sac that ran in a dog-leg off the Leamington Road and, pre-scheme, had suffered noise from that road. The properties were all well screened from the by-pass and the new roundabout, none of them directly facing it; some were further from it than the subject property, and some closer. The difference in noise levels at most of the houses in Smallbrook Road (apart from those right at the end that were closest) pre and post-scheme was less than the difference at the subject property, the rear of which directly faced the by-pass and, pre-scheme, had suffered no noise at all from Leamington Road.

The settlements in Smallbrook Road had ranged from 0.5 to 5.25 per cent depending upon how far the individual properties were from the new road, their position in the road and the amount of shielding created by nearby properties. Finally, Mr. Hinton referred to the recent Lands Tribunal decision in Horton and Griffin v Worcestershire County Council (2001) (LT) LCA/64&66/2001(Unreported) which related to two higher value properties in nearby Bibsworth Lane. In those cases, the predicted increase in noise levels from pre-scheme to 2012 (at 4 dB(A)) was less than that at the subject property (7.5 dB(A)) despite the fact that the properties were closer to the by-pass. The diminution in value had been determined at 4.83 and 6.9 per cent for physical factors.

In cross-examination, Mr. Hinton said he was dealing with 53 claims in connection with the scheme, between 15 and 20 of them relating to properties on the Sandscroft estate, and accepted that if this case succeeded, the others would be negotiated on the basis of this Tribunal's findings. He would therefore be receiving fees, but did not accept that that fact prevented his evidence being impartial. Whatever the basis of his fees, he said that made no difference to the facts or his valuation of the subject property. He acknowledged that he had not disclosed his financial interest even though he was required, under the RICS guidelines for surveyors acting as expert witnesses, to be impartial and objective. He also said he was not aware that he was required to include within his report a standard declaration as laid down by the RICS.

Mr. Hinton could not produce a copy of his standard letter of instruction that he said was produced in all compensation cases, and accepted that the claimant in this case was in a no-lose situation as far as fees and costs were concerned.

Although he dealt with compensation claims over a wide area of the country, Mr. Hinton insisted that he had a working knowledge of values in the Broadway area, having been involved with the Smallbrook Road claims, although he had no direct knowledge relating to the comparables to which he had referred, and had not inspected them other than externally. He accepted that adjustments needed to be made for any differences between the comparables and the subject property, and said he was not aware that 60 Sandscroft Road had been extended to the rear. It was accepted that the provision of a full-width sitting room extension would affect the value, but the addition of a study/third bedroom behind the garage would not, in his view, be material.

As to the rate of house price inflation in Broadway over the relevant periods between the valuation date and the sales of the two comparables to which he had referred, Mr. Hinton said he had allowed 6 per cent between October 2000 and April 2001 and was of the view that on a year-on-year basis, inflation was about 12 per cent. He accepted the basis of the adjustments that Mr. Prendergrast produced to the hearing to compare 53 and 60 Sandscroft Avenue 'in general terms', but did not accept that that analysis showed 37 Sandscroft Avenue to have been unaffected by the by-pass. Mr. Hinton also said that he did not agree with the statement made in a letter from the agent that had sold no.37 that "the by-pass is well screened and therefore will not have an effect on the value of the property", and did not attach any weight to Mr. Prendergrast's assertion that the purchasers, who were local, had told the Council that they did not consider the value was affected.

Regarding noise readings generally, Mr. Hinton accepted the premise that higher value properties are more likely to be sensitive to noise intrusion. For example, the owners of a £500,000 property would be more likely to be worried about noise than the owners of a £50,000 house. However, in his view there would be no difference, in terms of sensitivity between properties of c. £80,000 value (the subject property) and those with values in the range £90,000 to £95,000 (Smallbrook Road). He accepted that the Sandscroft Road properties were at the 'lower end of the market' being part of a large former Council estate and were marginally cheaper than the Smallbrook Road houses, but said they were not the cheapest in Broadway – some of the houses on roads on the inner part of the Sandscroft estate being of lesser value.

It was acknowledged that the Smallbrook Road properties were more uniform, it was a cul-de-sac location and most of the properties had larger plots and garages or, at least, off road parking. The 'tone' of the area was somewhat better but, in Mr. Hinton's view, not materially so. In terms of settlement figures, and the fact that the Smallbrook Road properties had settled, in some instances, at a ratio of 4 to 1, it was accepted that there had to be an allowance for an element of negotiation (although that could cut either way), this being why settlements generally were considered less reliable than actual transactions – so long as there were sufficient open market sales to allow a view to be formed.

The noise readings that had been taken by the Council in 1997 had not been repeated following the opening of the by-pass, and Mr. Hinton accepted that the only evidence available was the predictions for 2012. It was agreed that there was no evidence upon which either party could rely as to the noise levels at the valuation date, but Mr. Hinton thought that whilst the noise at the Smallbrook Road properties may have been marginally more intrusive due to traffic slowing down for, and accelerating away from, the new roundabout the noise suffered at the subject property be HGVs using the 'crawler lane' was virtually as disturbing.

Due to the topography of the land, particularly the rise in the field immediately behind the subject property, it was a fact that vehicles could only be seen (especially from the first floor) as they entered and emerged from the cutting but Mr. Hinton did not agree that this had any material affect on value. Due to the quality of the screening, and the proximity of the cutting, the impact on the views from the subject property was virtually nil.

Finally, as to the premium that he thought would apply, in the no-scheme world, to the properties on the outside of Sandscroft Avenue, over those on the inside to take account of the view, Mr. Hinton said he did not agree with Mr Prendergrast's analysis of £2,160 (see para 29) but thought that, in his professional judgment, 15 to 20 per cent was more appropriate.

COUNCIL'S CASE

Mr. Prendergrast is a chartered surveyor with over 15 years experience of compensation matters, and is employed as a Principal Valuer with the respondent Council. He produced a report relating to the subject property together with the report on noise levels that had been produced by the Council as a 'Proof of Evidence on Noise' at the public inquiry into the scheme. He explained that the physical factors for which compensation could be paid in a claim under Part 1 of the 1973 Act did not include loss of amenity, view, security or personal inconvenience. Mr. Prendergrast said that in his professional opinion, whilst the Council accepted that the subject property had been affected to some limited degree by the by-pass, 60 per cent of the diminution in value (which he had assessed at £500) was due to loss of view. Thus only £200 was due to noise, the increase in which, according to his own aural senses, was marginal.

Noise, he said, was subjective and the 0.5 dB(A) difference in the predicted 2012 levels between the subject property and 37 Sandscroft Avenue where the selling agent had said the value was unaffected, would be indiscernible to the human ear. Small increases in decibel levels over 55 dB(A) would be more noticeable than similar increases below that level. In his own opinion, Mr. Prendergrast said, the Smallbrook Road properties (where those nearest the road were predicted to achieve close to 60 dB(A) levels) appeared to be affected much more, possibly due to vehicles changing gear, decelerating and accelerating from the roundabout that was close by.

Those properties were also significantly better than the Sandscroft Avenue ones, with a price differential of around 17 per cent. There were only about 30 houses, against 300 on Sandscroft, and Smallbrook Road was a pleasant semi-rural cul-de-sac. In his opinion, prospective purchasers of that type of property would be more sensitive to increased noise, and this was reflected in the settlements to which Mr. Hinton had referred. In the negotiations leading to those settlements, incontrovertible transactional evidence had been produced by agents showing decreases in value, due to the new road, of up to £7,000. However, the overall depreciation in value agreed was not all due to physical factors, significant proportions of the agreed reductions being non-compensatable aspects including view and, in Mr. Prendergrast's opinion, general loss of 'ambience'. The level of settlements along Smallbrook Road indicated that there was no direct correlation between compensation and the distance of the property from the by-pass.

As to comparable transactions on the Sandscroft estate, Mr. Prendergrast referred to a sale of 3 Sheldon Avenue, a semi-detached house virtually identical to 37 Sandscroft Avenue but located on the western edge of the estate and fronting a narrow green separating Sheldon Avenue from Leamington Road which runs parallel with it. The property sold in July 2000 for £93,500 and was not affected by the by-pass. 37 Sandscroft Road had been sold in October 2000 at the full asking price of £97,500 and being in a similar position to the subject property, also backing onto fields, was a useful comparable. Whilst accepting that neither of these properties had been sold close to the valuation date, some general conclusions could be drawn. Carrying out adjustments to reflect the fact that 3 Sheldon Avenue had a garage and 37 Sandscroft Avenue had no central heating and was in poor decorative order, together with an allowance for house price inflation between the valuation date and the sale dates, Mr. Prendergrast concluded that 3 Sheldon Avenue would have been worth £80,840 in May 1999 and 37 Sandscroft Avenue would have been £83,000. The difference of £2,160 was the premium reflecting the rural rear aspect at the latter.

In respect of Mr. Hinton's comparable, 60 Sandscroft Avenue, Mr. Prendergrast carried out a similar exercise. Firstly, he allowed 20 per cent for house price inflation between the valuation date and the date of sale (April 2001), giving an equivalent value for no. 60 of £75,160 (a difference of £7,340). Then he adjusted for a number of factors by which the subject property could be considered better than no.60 such as central heating, better decoration, kitchen, bathroom and garden, concluding that, on a strict comparison basis, the subject property would be worth £5,200 more. Adding the £2,160 which he felt was the premium for the view at the subject property gave a difference of £7,360, almost exactly the same as that based solely upon inflation – this serving to prove that his opinion of value of the view must be correct.

Mr. Prendergrast reiterated that, in this case, the parties were only concerned with physical factors and any effect on view was not to be taken into account. In his opinion nos. 81 to 87 Sandscroft Avenue which were nearer the by-pass and had less protection from the cutting, were the worst affected properties, for which compensation under Part 1 of the 1973 Act at 1 per cent of open market value would be appropriate. Moving in the direction of the subject property, nos. 79 to 69 would be 0.75 per cent, 67 to 57 would be 0.5 per cent and 55 to 49 (including the subject property), would be 0.243 per cent – which happened to amount to £200. The properties eastwards of no.49 (including no.37) and those on the inside of Sandscroft Avenue (even numbers including no. 60) were, in his opinion, not affected at all.

In cross-examination, Mr. Prendergrast accepted that, subject to the adjustments that were necessary, 60 Sandscroft Avenue was a useful comparable. However, he acknowledged that the more adjustments that had to be made for physical differences and the further away the sale date was, the greater the margin for error. He also said that the 20 per cent he had used for inflation was his own professional opinion that was not based upon any market indices. The 17 per cent difference in values that he had applied to the Smallbrook Road properties was in specific comparison to the subject property, which has a smaller plot and no garage. He conceded that, if adjustments for such physical differences were made on the same basis as he had allowed for the comparables, the overall difference in value might be somewhat less. This could affect the sensitivity referred to in evidence, but only to a small degree.

In response to questions regarding the compensation that had been paid on the Smallbrook Road properties, Mr. Prendergrast worked through 2 examples which showed that despite substantial diminution in value being agreed, the compensation for physical factors was very small. 17 Smallbrook Road, which was on the outside of the bend, and one of the furthest properties away from the by-pass and new roundabout, had been agreed at a diminution in value of £5,450 off a no-scheme world value of £96,000. There was a projected noise increase of 4 dB(A) pre-scheme to 2012 (51 to 55 dB(A)), The compensation paid was only £450. That was 0.46 per cent of the pre-scheme value or 8.25 per cent of the overall diminution. The noise increase was not high, because the property had been previously affected by noise from Leamington Road anyway. The reason for the higher proportion of non-compensatable reduction in value was, Mr. Prendergrast said, due mainly to the 'very presence of the new road', and the effect that had on what had previously been a rural backwater.

No. 24 Smallbrook Road which was right at the end of the close, closest to the bypass and the roundabout (from which there was also disturbance from artificial lighting) had a projected 10 dB(A) increase (from 50 to 60 dB(A)). The diminution in value had been agreed at £12,500, of which £4,500 was compensatable for physical factors. Based upon an agreed pre-scheme value of £98,000 the compensation was 4.59 per cent of that, or 36 per cent of the agreed diminution. Mr. Prendergrast accepted that the Smallbrook Road properties had tended to be settled on a percentage basis, the amount reducing the further away from the by-pass that the properties were – hence his suggestion for that approach on the Sandscroft Road properties.

Mr. Prendergrast said that the recent Lands Tribunal decision on the two properties in Bibsworth Lane did not cause him to alter his opinion on the subject property as Bibsworth Lane was very different both in terms of the type of property and the general topography of the land. He also said that even if the compensation that was determined in respect of the subject property was more than he had originally allowed for (in the preparation of budgets for the scheme), and this had a knock on effect in respect of all the other outstanding claims, this would neither prejudice his position with the Council nor have any marked effect on the budgets.

He accepted that it was difficult to value to the nearest £200, and that his assessment of the premium for the view from properties on the outside of Sandscroft Avenue was mathematical, but in his professional opinion, a figure of around £2,000 was correct. As to the rationale for his figure of 1 per cent for the worst affected properties in Sandscroft Avenue, and the percentages he had adopted for house price inflation at 12 per cent per annum, he said this was derived from talking to local agents and the District Valuer, from the comparable sales that he had referred to in his report, and his own professional knowledge.

Mr. Prendergrast insisted that in his opinion whereas there was evidence to prove the Smallbrook Road houses had been materially affected by the by-pass, there was no such evidence in respect of the subject property. In his view the effect on the view from the rear of the property was greater than the noise disturbance, but overall the effects of the by-pass were very marginal.

In closing, Mr. Blohm said that in determining the amount by which physical factors had depreciated the value of the subject property, I should disregard the claimant's evidence as it was subjective. He had been a long-term protestor against the by-pass and had made several references to the effects on view – including the fact that high-sided vehicles could be seen from the first floor accommodation, and that was not a compensatable element. The hypothetical purchaser's opinion of the noise effects of the by-pass were what needed to be taken into account and the market evidence indicated that there was little if any effect on value.

Mr. Prendergrast's evidence had been well researched and included detailed analyses and adjustments, whereas Mr. Hinton's was manifestly short on analysis and showed that little if any research had been undertaken. For instance, it became evident in cross-examination that he had not even inspected 60 Sandscroft Avenue – the property he relied upon as one of the main planks of his case. Also, as Mr. Hinton was the driving force in this claim there must be a question over his impartiality. Mr. Blohm said that it was astonishing that there appeared to be nothing in writing between him and the claimant, and Mr. Hinton had also failed to disclose the nature of his interest in his report.

Regarding the settlement evidence, Mr. Blohm said there could be no question that Smallbrook Road was a better area in terms of its overall ambience and its location, and properties there attracted a premium over those on the Sandscroft estate. The Smallbrook Road properties were, therefore, whilst well screened from the by-pass and roundabout, more sensitive to noise.

Mr. Readings said that open market evidence was sparse, and those comparables that had been produced were sales that had taken place much later. In making adjustments for the rising market there was thus a significant margin for error. Whilst £82,500 had been agreed as the value of the subject property in the no-scheme world, Mr. Prendergrast had produced no evidence to support his contention that there was an overall £500 reduction in value to reflect both physical and non-compensatable factors.

The Smallbrook Road settlements were, in his submission, appropriate and representative. No 27 Smallbrook Road was a good example, showing noise readings of 50-51-54 dB(A) – a total projected increase of 4 dB(A). It was sideways on to the by-pass and, as it was the right-hand side of the semi, had no aspect to the road. It was, at 157 metres from the centre of the carriageway, slightly closer but was well screened by the other properties in the road. Compensation paid there was paid on the basis of 2 per cent of an open market value of £89,000 - £1,780. The subject property had an anticipated increase of 7.5 dB(A), so it was illogical for Mr. Prendergrast to have assessed compensation there at 0.243 per cent, or £200. There was little difference between the types or values of property and certainly not enough to suggest a higher degree of sensitivity to noise.

Mr. Prendergrast had also been unable to explain why 0.243 per cent depreciation was appropriate for the subject property, and there was no evidence, other than his own professional opinion for the suggested 1 per cent reduction for the worst affected properties on the Sandscroft estate. There must be a serious question, Mr. Readings said, over his rationale. For instance, he asked, why were such large proportions of the agreed reduction in values on the Smallbrook Road properties said to be attributable to non-compensatable factors such as loss of view and amenity, when most of the properties were completely shielded from the road? It was only those at the far end that suffered from the effects of the artificial lighting on the new roundabout. Mr. Prendergrast's dogged determination to stick to his original figures, despite the weight of evidence in the claimant's favour, indicated the predicament he found himself in as regards his position with the Council and raised, therefore, similar questions over impartiality.

DECISION

I inspected the subject property internally and externally on 8 November, and made external inspections of all the comparables, together with the settlement properties in Smallbrook Road. The weather was cold and showery, with a brisk breeze from the north-east blowing across the by-pass in the direction of the rear of the claimant's house.

The aspect from the rear of the property over open countryside would have been, prior to the construction of the by-pass, totally uninterrupted. However, the topography of the land immediately behind the house, with the field that separates it from the by-pass rising somewhat, and the Council's mitigating works (the provision of a deep cutting), serving to minimise any visual impact to a considerable degree. As pointed out by Mr. Prendergrast, when looking out from the ground floor at 90 degrees to the rear wall of the house, all that can be seen to hint that there may be a by-pass is a post and rail fence at the top of the cutting. I agree that that is the case and that, due to the depth of the cutting, the view is similar from the first floor. However, as pointed out by the claimant and Mr. Hinton, looking both to left and right, especially from the first floor main bedroom, and looking straight out through the side window in bedroom 2, the tops of high-sided vehicles can be seen entering and leaving the cutting although the road surface is not visible.

In my judgment, the visual impact of the scheme from the subject property, even allowing for the fact that the vehicles can just be seen from certain angles, is miniscule and would not have a material effect on value. However the effect of noise is altogether another matter. The lie of the land is the reason that, as the claimant explained in evidence, the noise from vehicles, especially HGV's and motorcycles, becomes 'muffled' for a short while as they pass through the cutting, and then increases as they emerge on each side. Whilst I was unable to detect any discernible noise from the dining room when the extremely effective double glazed patio doors were closed, I could just hear the traffic in the first floor principal bedroom when its patio doors were closed. This was due to the fact that there was also a side window, and the transom light was open. Similarly, I could hear some slight traffic noise from the second bedroom which also had a side window looking towards the by-pass.

It was somewhat different when the patio doors at both ground and first floor were opened as, presumably, they would be for much of the day in summer. Noise from the by-pass was, in my view, discernible to the point of being intrusive and this became even more so from the rear garden. What would have been, pre-scheme, a quiet aspect with perhaps some distant noise from Leamington Road, has become transformed by the traffic noise, and I accept the claimants statement that his former enjoyment of the gardens has been seriously compromised. Nevertheless, I accept that the claimant's view must, to a considerable extent, be subjective, and a prospective purchaser may well look at matters somewhat differently, especially as he will have no prior knowledge of the former peace and tranquility.

This brings me to the principal issue – by how much would a prospective purchaser decrease his bid to reflect the existence and effects of the by-pass. As I have already said, I do not think the visual aspects would have any material effect on the price for the subject property, and therefore do not agree with Mr. Prendergrast's view that any depreciation is split 60/40 in favour of non-compensatable matters. This may be different for other houses on the Sandscroft estate, where the topography of the land is less favourable.

Before looking at the evidence of the experts in order to determine the amount by which the noise from the use of the by-pass has depreciated the value, I consider it appropriate to comment on Mr. Hinton's position. It is by no means unique for valuers who specialise in compensation work to act for large numbers of individuals who have been affected by the same scheme, but to fund a reference to the Lands Tribunal on behalf of one claimant with a view to that decision becoming a benchmark for all the other claims is, in my view, unusual. Mr. Hinton accepted that, if the decision went in the claimants' favour, he would earn fees from the other outstanding claims in the vicinity.

Mr. Hinton is, in my judgment, a valuer of sufficient experience not to allow himself, in the production of an expert witness report or the giving of evidence, to consciously lose sight of the requirement for impartiality, but the fact that he has a potential pecuniary interest precludes him, in reality, from being totally impartial. The RICS Practice Statement for Surveyors acting as Expert Witnesses requires a statement in an expert witness report to the effect that the surveyor has included "all facts which I regard as relevant to the opinions expressed in my report, including any matters that may affect the validity of my opinion". No such declaration was made, and there also appeared to be nothing documented between Mr. Hinton and the claimant. Neither of these omissions do him any credit. Therefore, whilst I have derived assistance from the facts his evidence has brought to my attention, I find myself unable to attach any weight to his opinions, due to his prospective financial interest in the outcome of this reference.

Turning to the evidence, I look firstly at the comparables, and whilst there can be no doubt that, in normal circumstances, evidence of open market transactions will be given more weight than scheme settlements, or for that matter, settlements on other schemes, in this case I find them of little assistance in determining the difference between the pre-scheme and post scheme values. The valuation date is 11 May 1999. 3 Sheldon Avenue sold in July 2000 at £93,500, 37 Sandscroft Avenue sold in October 2000 at £97,500 and 60 Sandscroft Avenue sold in April 2001 at £93,950. During that time there was a period of rapid and sustained house price inflation and although there was no dispute that house price rises for this type of property were running at about 12 per cent per annum during the period, by the time any necessary adjustments have been made to reflect physical differences it is, in my view, impossible to determine with any accuracy a before and after value for the subject property. No evidence of any pre-scheme sales was produced.

For example, Mr. Prendergrast carried out adjustments to 3 Sheldon Avenue and 37 Sandscroft Avenue to take account of timing differences, central heating, garages, decoration and the like, to come to a conclusion that the 'premium' that a purchaser would pay for the rear aspect over open farmland was £2,160. This resulted from his assessment that 3 Sheldon Avenue would have been worth £80,840 on a like for like basis to the subject property at May 1999, and 37 Sandscroft would have been worth £83,000. Carrying out a similar exercise for 60 Sandscroft Avenue against the agreed pre-scheme value of the subject property (which involved many more adjustments) he came to a figure which, he said, supported that premium. Mr. Prendergrast said that no.37, which was the most appropriate comparable as it was very near the subject property, and had the benefit of the views, was not affected by noise from the by-pass. He said the difference of £1,000 between the £83,000 that that would have been worth, and the post-scheme value of £82,000 for the subject property was accounted for as to £800 for the larger plot and wooden garage at 37 and £200 for the noise element at 53. Mr. Hinton said that he thought the premium would be very much higher, but produced no evidence to support that claim, and there was also no evidence, from the comparables, to support his alleged post-scheme value of £80,000.

I am unconvinced by Mr. Prendergrast's breakdowns, despite his efforts at detailed analysis, especially in regard to the value attributed to the various differences between nos 37 and 53. It is certainly not possible, in my view, to analyse the effects of noise down to the nearest £200 and in any event, from my inspection from the footpath to the side of no.37 Sandscroft Avenue, I conclude that it is equally affected by noise from the by-pass, despite the fact that there is also some additional noise from Leamington Road.

As the comparables to not provide any conclusive evidence it is necessary to move to the settlements, and those in Smallbrook Road are, in my judgment, indicative of appropriate levels of compensation. I am not persuaded by Mr. Prendergrast's suggestion that prospective purchasers of those properties would be any more sensitive to the effects of noise than those who might be contemplating buying a house on the outer periphery of the Sandscroft estate. Whilst Smallbrook Road is a more attractive development in that it is formed by a single cul-de-sac of less than 40 properties, all of similar style and, in terms of estate layout, has an overall air of spaciousness, there is insufficient difference in overall open market values to suggest a materially different type of market. Where I would expect to see a very much higher sensitivity factor is in the type of properties which were the subject of the decision in Horton and Griffin, those being houses with pre-scheme values of £435,000 and £232,500 respectively.

No. 27 Smallbrook Road was, in my judgment, an appropriate settlement to be referred to by the claimant's expert. Although it is described as 157 metres from the by-pass, that measurement, having been taken from 'the house elevation at the nearest point facing the bypass to the centreline of the new carriageway at the shortest distance' (per Mr. Prendergrast) must have been from the front left-hand corner of the house. The house stands at an angle of approximately 45 degrees to the by-pass, and on the front and front/side elevations is screened by the properties on the other side of the road and a mature bank of trees at the end of the cul-de-sac. The rear elevation, from which there are views over open fields, and where occupiers would expect to enjoy the garden, faces away from the by-pass, and I doubt whether it could even be seen except, perhaps, from the far end of the rear garden at which point the distance to the by-pass will be substantially greater than it is in the rear garden of the subject property.

The predicted increases in noise are also significantly less than at the subject property and yet compensation for the effects of noise was paid at 2 per cent. At no.17 Smallbrook Road, where predicted increases in noise levels were again only 4 d(B)A, but the property was somewhat further from the by-pass (202 metres), compensation was settled at 0.49 per cent - £450. No.16 Smallbrook Close had compensation paid at 2.5 per cent of value, on the basis of predicted increases in noise levels of 8 dB(A) – somewhat closer to those expected at the subject property, but there may also have been some allowance for the effects of artificial lighting there as well.

It is evident that the lowest settlements in Smallbrook Road, at 0.49 per cent, were at properties which, in my view, were less affected by noise than the subject property (even though I accept Mr. Prendergrast's evidence that there would be a different type of noise at Smallbrook Road). The highest settlements at 5 and 5.25 per cent were on the properties at the end of the cul-de-sac and were undoubtedly on houses that were more seriously affected – with predicted noise increases of up to 10 dB(A).

As I have said, there is no doubt in my mind that the subject property has been detrimentally affected by the noise emanating from the use of the by-pass. It was very evident at the time of my inspection, which at around 2 pm, was a quiet time of the day. I have no reason to question the claimant's evidence that during rush hours and at weekends the noise will be significantly more disturbing to the extent that enjoyment of the garden (and the balcony off the main bedroom) will be severely curtailed. Whilst accepting, as I have said, that the claimant's evidence was subjective, I am satisfied that a prospective purchaser would be sufficiently concerned to adjust his bid in a downwards direction to account for it.

Doing the best that I can on the basis of the evidence, taking into particular account the level of settlements, and allowing for the fact that any adjustment in bid would be likely to be made to the nearest £250, I conclude that a fair reduction to reflect diminution in value for the noise effects from the use of the by-pass is £1,500, or 1.81 per cent. Whilst this figure, in percentage terms, is significantly lower than those awarded in Horton and Griffin, those properties, as I have said, are in a different market that is likely to be more sensitive to the effects of noise.

I therefore determine that the Council shall pay compensation to the claimant under Part 1 of the 1973 Act in the sum of £1,500 together with statutory interest from the date of the notice of claim.

This determines the substantive issue in this reference, and it will take effect as a decision when the question of costs has been determined. At that point, and not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and order 61 rule 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions on costs, and a letter accompanying this decision sets out the procedure for submissions in writing.

DATED 26 November 2001

(Signed) P R Francis FRICS

Addendum on Costs

Submissions on costs have been received from the parties. The claimant's case is that despite the oral evidence given during the hearing that Mr Hinton intended to indemnify him in respect of any costs he may incur, it was a matter of fact that Mr Keen was primarily liable for his solicitors and counsels costs. No claim was being made in respect of Mr Hinton's fees but whatever the relationship was between him and the claimant over costs, the reference was not formally agreed to be a test case nor was there any agreement between the parties that there should be a special order about costs. The ordinary rules should therefore apply, and costs should follow the event.

The Council said that costs were at the discretion of the Tribunal. The entitlement to costs was based upon the indemnity principle, and, as Mr Hinton was indemnifying the claimant, Mr Keen would not actually be incurring any costs. The claimant had put his case for compensation at different sums, substantially higher than the amount awarded, at various stages of the proceedings, and those put forward in the claim documentation by Mr Hinton were also higher than the sum eventually sought at the hearing.

This was also a test case, in that it was resolved for the benefit not only of the claimant but also for the Council and other potential claimants in the locality. For all these reasons it was submitted that no award should be made.

Whilst I make no finding or conclusion as to whether there is or is not any liability upon the claimant to pay the costs of his solicitors and counsel, I am persuaded by the oral evidence of Mr Hinton that, despite there being no written agreement, it was the intention that the claimant would be fully indemnified as to costs whether or not this claim was successful.

The claimed costs will therefore be payable by Mr Hinton, and as the claimant will have nothing to pay, under the indemnity principle, there can be no entitlement to costs.

Furthermore, even if I had found that the claimant had not been indemnified by his expert, the fact that Mr Hinton had not disclosed his pecuniary interest and had, initially, exaggerated the claim, would have led me to exercise the Tribunal's discretion, and not award the claimant his costs in any event.

I therefore make no award as to costs.

DATED: 10 January 2002

(Signed) P R Francis FRICS

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