[2004] EWLands ACQ_70_2002 (16 June 2003)
	ACQ/70/2002
	
	LANDS TRIBUNAL ACT 1949
	
COMPULSORY PURCHASE - compensation – mineral-bearing agricultural land - land acquired to provide flood relief channel - whether statutorily assumed planning permission restricts right to extract minerals to acquiring authority only - prospects of extracting minerals in no scheme world from land taken and retained land - whether value of minerals to be assumed by uplift to agricultural value or adjusted quarry valuation - whether claimant’s retained land suffered severance or injurious affection - compensation awarded £131,478 - Land Compensation Act 1961 s 15
	
IN THE MATTER OF A NOTICE OF REFERENCE 
	
BETWEEN	COLNEWAY LIMITED	Claimant
	and
		
	ENVIRONMENT AGENCY	Acquiring
		Authority

	Re:	Bare agricultural land and
	Mineral-bearing agricultural land
	Barge and Amerden Farms
	Taplow
	Buckinghamshire

	Before: President and N J Rose FRICS

	Sitting in public at 48/49 Chancery Lane, London, WC2A 1JR
	on 5-7 and 27-28 March 2003

The following cases are referred to in this decision:
Roberts v South Gloucestershire DC [2002] EWCA Civ 1568
Bwlffa and Merthyr Steam Collieries (1891) Ltd v Pontypridd Waterworks Co. [1903] AC 426

The following further cases were referred to in argument:
Waterworth v Bolton Metropolitan Borough Council (1978) 37 P & CR 104
Trocette Property Co Ltd v Greater London Council [1974] RVR 306

Frances Patterson QC, instructed by Field Fisher Waterhouse, solicitors of London for the Claimant 
Guy Roots QC instructed by S J Berwin, solicitors of London for the Acquiring Authority.

DECISION
1.	This is a reference to determine the compensation payable by the Environment Agency (“the acquiring authority”) as successor to the National Rivers Authority (“NRA”), to Colneway Limited (“the claimant”) for the freehold interest in 34.41 acres of agricultural land at Barge and Amerden Farms, Taplow, Buckinghamshire (“the subject property”).  The land was compulsorily acquired under the National Rivers Authority (Maidenhead, Windsor and Eton Flood Alleviation Scheme) Compulsory Purchase Orders 1991 and 1992 (“the CPOs”), confirmed by the Secretary of State for the Environment on 21 March 1995.  
2.	The amount sought by the claimant totals £3,447,687 and the figure of compensation contended for by the acquiring authority amounts to £109,753.  The reason for this great disparity is that the claimant’s land, both that acquired and that retained, is gravel bearing and the claimant contended that the compensation should reflect the value of the mineral.
3.	Miss Frances Patterson QC appeared for the claimant.  She called three expert witnesses, namely Mr D K Symes, ARSM, BSc (Hons), CEng, FGS, MIMM, FIQ, FRGS; Mr D A Tucker, MSc, CEng, MICE, MIHT and Mr P J Smith, MRICS.  Mr Guy Roots QC, for the acquiring authority, called two expert witnesses, Mr M J S Banton, BSc, MRICS, AMIQ and Mr M J Kean BSc.
4.	We inspected the subject property and the surrounding area on 28 April 2003, accompanied by Mr Smith and Mr Banton.
Facts
5.	The parties produced an agreed statement of facts, in the light of which we find the following facts.  Maidenhead, Windsor and Eton and surrounding areas have suffered from flooding in the past.  These areas lie within the flood plain of the river Thames.  The acquiring authority produced a scheme for a flood relief channel which became known as the Maidenhead, Windsor and Eton Flood Alleviation Scheme (“MWEFAS”).  The principle of the scheme is that the flood channel diverts floodwaters from the Thames at Maidenhead and these waters are controlled by sluice gates and weirs to rejoin the Thames at Datchet.  The channel was constructed between 1996 and 2002 and extends to a length of 11.6 km.  Implementation of landscaping and ancillary works is continuing.  
6.	The scheme was constructed under the Water Resources Act 1991.  It included extensive environmental and wildlife design together with public access, parking facilities and public footpaths.  It also included wildlife habitat in the form of reed beds, marshland areas and other environmental facilities, features and design.  There are a number of bridges across the channel that accommodate public roads, public footpaths and bridleways and railways.
7.	A summary of relevant dates is as follows: 
First published studies into a flood alleviation scheme		1983	
NRA planning application for MWEFAS		Jan 1991	
First NRA CPO		1991	
Second NRA CPO		1992	
Start of public inquiry		Oct 1992	
Inspector’s report		Sep 1993	
Secretary of State’s “minded to grant” letter		Nov 1994	
Secretary of State’s decision		1 Mar 1995	
Planning permission 		1 Mar 1995	
CPO confirmed		21 Mar 1995	
General vesting declaration		17 Jun 1996	
Notice to treat		17 Jul 1996	
Entry onto claimant’s land (agreed valuation date)		27 Jul 1996	
Commencement of construction of channel		Oct 1996	
Completion of engineering works and channel 		Sep 2001	

8.	The land acquired by the acquiring authority from the claimant was described in the 1991 CPO as follows:
Plot 38	Approx 1,500 m2 of track with public footpath	
Plot 39	Approx 19,484 m2 of uncultivated arable land	
Plot 40	Approx 115,720 m2 of uncultivated arable land	
Plot 41	Approx 2,550 m2 of uncultivated arable land	
Plot 44	Approx 1,328 m2 of land, being the western half of the road known as Marsh Lane, Taplow.	

No claim has been made in respect of Plot 44.
9.	At the valuation date the subject property was let on an agricultural tenancy.  It was subsequently used to construct the MWEFAS channel.  214,252 tonnes of minerals were extracted as part of this construction process and were sold on by the acquiring authority at £1.33 per tonne.  The remainder of the subject property has been used for footpaths, planting areas and river banks etc.  
10.	The surface value of the subject property is agreed at £104,453.  The mineral deposit underlying the claimant’s retained land to the south of MWEFAS (“the retained land”) totals approximately 5.7m tonnes.
Issues
11.	The issues to be determined by the Tribunal are:
(1)	The open market value of the subject property
(2)	The diminution (if any) in the open market value of the claimant’s retained land by reason of severance and injurious affection caused by the acquisition.
The principal issues in dispute are:
A	Does any planning permission to be assumed under section 15 of the Land Compensation Act 1961 authorise anyone other than the acquiring authority to extract minerals from the land acquired for the purpose of assessing compensation?
B	In the absence of the scheme what were the prospects at the valuation date of obtaining planning permission for the extraction of minerals from (a) the land taken and (b) the claimant’s retained land?
C	Should the value of the land taken and the effect on the value of the retained land be assessed (1) by means of an uplift on agricultural value or (2) by means of an adjusted quarry valuation?
Issue A: the assumed planning permission and mineral extraction
12.	Section 15 of the Land Compensation Act 1961 provides:
	“(1)	In a case where –
(a)	the relevant interest is to be acquired for purposes which involve the carrying out of proposals of the acquiring authority for development of the relevant land or part thereof, and
(b)	on the date of service of the notice to treat there is not in force a planning permission for the development, it shall be assumed that planning permission would be granted in respect of the relevant land or part thereof, as the case may be, such as would permit development thereof in accordance with the proposals of the acquiring authority.
	(2)	For the purposes of paragraph (b) of the preceding subsection no account shall be taken of any planning permission so granted as not to ensure (while the permission remains in force) for the benefit of the land and of all persons for the time being interested therein.”
13.	Planning permission for the construction of the whole of MWEFAS - on the claimant’s land and on the land of the other owners along the length of the scheme - was granted by the Secretary of State on 1 March 1995.  It was subject to a number of conditions.  Condition 4 made the permission personal to NRA.  Thus, under section 15, the permission is not to be treated as a permission in force; and it is to be assumed that planning permission would be granted for the subject land such as would permit development of that land in accordance with the proposals of the acquiring authority.  It becomes necessary, therefore, to identify what were the proposals of the acquiring authority.
14.	Mr Roots suggested that the proposals of the authority are to be identified by reference to the evidence before the inspector at the inquiry into the CPO and planning application, the decision of the Secretary of State on the CPO and planning application, and evidence of what was constructed and the manner in which it was constructed.  (On the last matter Mr Roots said that it would be consistent with the decision in Bwlffa and Merthyr Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426 to take account of such evidence.)  Miss Patterson said that the proposals of the acquiring authority would be defined by the planning permission granted by the Secretary of State.  It is clear that the identification of the proposals of the acquiring authority for the purpose of the section 15(1) assumption of planning permission is a question of fact.  The terms of the compulsory purchase order may sufficiently identify the proposals, but we can see no reason why reference should not be made to any evidence that may shed light on any dispute as to whether a particular matter was or was not part of the proposals of the acquiring authority.
15.	Miss Patterson pointed out that the planning permission described the development as “the construction of a flood relief channel and the winning and working of minerals …”.  A permission in those terms would, she said, apply to the land taken; and it would grant permission for two things - the construction of the flood relief channel and the winning and working of minerals.  Since the assumed permission would apply only to the land taken and would not be a permission for a wider scheme including the relevant land, no assumption would fall to be made that the channel on the land taken was to connect up at either end with sections of the proposed channel.
16.	The planning permission that was granted contained, as we have said, a number of conditions.  To be particularly noted are condition 2 (the channel to be completed and fully operational within 5 years of commencement); 3 (the development to be completed as a whole and to be carried out in accordance with the approved documents and plans); 9 (details of the scheme of working, including construction, mineral extraction, spoil deposition, phased restoration and aftercare to be submitted and approved in respect of each area prior to the commencement of work in that area); and 33 (notwithstanding the General Permitted Development Order, no building or plant to be erected except as approved by the planning permission).
17.	Miss Patterson submitted that the acquiring authority’s proposals are to be interpreted without reference to the actual conditions on the planning permission and the planning obligations to which it was subject.  She pointed out that sections 14(4) and 16(6) both make express reference to conditions in the planning permissions to be assumed under those sections.  By contrast section 15 says nothing about conditions, and no conditions, therefore, ought to be assumed.  Alternatively, if, contrary to that submission, regard must be had to conditions, then the conditions to be assumed would have to be those as could reasonably be assumed to apply to the acquiring authority’s proposals but only on the claimant’s land.  The process would thus ensure that the owner had the benefit of the same permission as the acquiring authority.  The assumed permission was thus to construct a section of the flood relief channel across the claimant’s land and to win and work the minerals lying within it.  Both those elements were of value: the minerals, as they could be realised at a value; and the flood relief channel, because it would have a recreational function of value.
18.	Mr Roots submitted that this was clearly a scheme to construct a flood alleviation channel and not a mineral extraction operation.  An individual landowner on his own could not have implemented a section of the scheme pursuant to the actual permission, even in the absence of condition 4 which made the permission personal to NRA, because he could not have complied with conditions 3 and 9.  The assumed planning permission under section 15 was to be taken as authorising the development of the land taken in accordance with the NRA’s proposals.  Even if one were to ignore the likelihood of a Grampian condition being imposed in order to ensure implementation of the scheme as a whole in a co-ordinated manner, the assumed permission must be taken to contain the particular features and limitations.  There would be a limitation on the extraction of gravel to that necessary to form the precise channel profile.  Amerden Lane would have to have been diverted.  Marsh Lane Bridge with the water level control structure would have to have been constructed.  The gravel extracted would have to have been transported eastwards along the line of the channel, with no public highways being used until it reached junction 6 on the M4.  This arrangement was part of the acquiring authority’s proposals, and it was no part of their proposals that access could instead have been obtained to the A4 (as the claimant contended).  In addition, no processing plant could have been installed on the land, and restoration and landscaping would have to have been carried out as proposed by NRA.
19.	Mr Roots placed reliance on the recent Court of Appeal decision in Roberts v South Gloucestershire District Council [2003] RVR 43, which he submitted was on all fours with the present case.  There a strip of the claimant’s land, 204m long, had been acquired for the purpose of constructing a 2.8 km stretch of the Avon Ring Road.  The part of the road across the claimants’ land was in deep cutting and a large volume of rock was extracted which was used elsewhere on the scheme or tipped.  The claimants contended that section 15(1) required the assumption of a planning permission that would permit development of their land in accordance with the authority’s proposals, and it was to be assumed that planning permission would have been available to the hypothetical purchaser of the land for extraction of the material without any obligation to complete that part of the road.  The Court of Appeal rejected this contention.  The assumed permission was for the construction of the road and not for a series of discrete operations involved in that process (see Carnwath LJ at para 39, applying Copeland BC v Secretary of State for the Environment (1976) 31 P & CR 403); it was for the indivisible process of building the road, so that a mineral contractor commencing works of extraction in circumstances where there was no prospect of the road ever being built would be carrying out operations that were not within the permission (ibid para 38).
20.	Miss Patterson submitted that Roberts was to be distinguished.  There the assumed permission was for a short stretch of disembodied road in deep cutting on the claimants’ land.  In the present case, on the other hand, implementation of the assumed planning permission would have resulted in a body of water which could be used for recreational purposes, like the adjacent Taplow Lake.  The assumed permission was thus one that could have been implemented in the absence of any other operations to carry out MWEFAS.  
21.	In our judgment the assumed planning permission does not entitle the claimant to compensation based on the value of the subject land for mineral extraction.  There are two reasons for this.  The first is that, as in Roberts, the assumed permission was for an indivisible piece of development, the making of a length of flood relief channel across the claimant’s land.  To carry out works of mineral extraction in the absence of co-ordinated works on adjoining land would not constitute implementation of the permission, which was for the construction of a flood relief channel to take water from the River Thames, and not the making of a lake.  Secondly, if development of the claimant’s land was carried out as part of a co-ordinated project to provide a flood relief scheme, the value of the subject land for mineral extraction could not be taken into account.  Under section 6 of and Case 1 of Schedule 1 to the 1961 Act, where land is acquired for purposes involving the development of any of the land authorised to be acquired, any increase in value of the subject land that is due to the development or the prospect of development of other land for any of those purposes is to be disregarded.  Only if the other land in MWEFAS were to be developed by carrying out the scheme could the assumed planning permission on the subject land be implemented and thus the minerals in the subject land exploited.  The increase in value of the subject land attributable to the prospect of mineral extraction would therefore have to be disregarded.
Issues B and C: Prospects of planning permission and appropriate valuation method
22.	We think it would be helpful to consider the second principal issue - the prospects, at the valuation date, of planning consent being granted for mineral extraction from the subject property and the retained land - in tandem with the third issue, namely the appropriate valuation approach which should be adopted.
23.	Mr Smith has had over 20 years professional experience and, since 1994, has practised locally in Dorney as P J Smith Associates.  He specialises in rural practice, green belt and countryside matters including management, valuation, town and country planning, compensation and land tenure.  His detailed valuation has been reproduced in Appendix 1, but may be summarised briefly as follows:
Land Taken
Minerals 	£995,860
Surface Value (agreed)	£104,453
			£1,100,313
Severance/Injurious affection	£2,347,374
			£3,447,687
24.	Mr Smith agreed with Mr Banton, the acquiring authority’s valuation expert, that the methodology generally adopted when valuing quarries may be described as follows:
“Quarries are usually valued by applying a royalty, a payment per tonne of mineral sold, to an expected level of annual sales.  This annual income is capitalised over the life of the quarry.  The quarry life will depend on the total quantity of mineral reserves.  
If a quarry is not operating, it will be necessary to adjust the capitalised royalty incomes to take account of the deferment period until extraction is expected to commence.  This can sensibly be undertaken if a quarry has planning permission and could commence production and sales when required.
Therefore to value a quarry the following factors must be quantified: 
i)	The level of royalty
ii)	The quantity of reserves
iii)	The level of annual sales 
iv)	The commencement date (if not already working).”
25.	Mr Smith’s valuation calculations were prepared on the assumption that planning consent was available for the immediate working of the minerals in the land taken.  He did not prepare an alternative calculation on the basis that this area did not have planning permission.  His valuation of the retained land, however, did reflect the fact there would be a delay before planning permission would have been obtained, and also the risk that such consent would not be forthcoming.
26.	Mr Smith relied on Mr Symes for a considerable amount of information in preparing his valuations.  In particular, Mr Symes provided details of the volume of minerals in each area; the likely dates of future extraction; annual output; royalty levels and the chances of planning consent being granted.  Mr Smith adopted these details directly in his valuation calculations.  
27.	Mr Symes is a geologist.  Since graduating he has been engaged in the location, planning and development of sources of building materials and landfill sites associated with the construction industry.  He worked initially for 10 years within the industry and he now has his own consulting practice which has been operating for 20 years.  He pointed out that the claimant’s land holding in the area had been purchased in 1935 as a mineral reserve to be held for working at a future date.  When that date might be would depend upon the changing circumstances relating to the environmental constraints and the need for the mineral.  Although there had been a history of past refusals of planning permission for mineral extraction on the claimant's land, by the valuation date the planning prospects were noticeably improving as the alternative resources within Buckinghamshire were becoming exhausted.  In Mr Symes’s opinion, in the absence of MWEFAS, the prospects for part of Barge Farm to be identified for mineral working in the next review of the minerals local plan were very favourable.  He thought that the central area of the farm, which contained some 2 million tonnes, had an 80% chance of being so identified, in which case it was reasonable to assume that a properly prepared mineral planning application would be successful and that production would commence in 2008.
28.	What Mr Symes termed extension area 1 lies to the north west of the central area and contains 700,000 tonnes.  He felt that this would not come forward for development until 2018, when the central area would be close to completion, 10 years after work on it had started.  During that 10 year period there would have been another review of the minerals plan.  Mr Symes considered that with the continuing difficulty of finding acceptable sites, the chances of success for an extension to the central area were 80%, making a cumulative success prospect of 64% (i.e. 80% of 80%).
29.	Mr Symes said that such arguments did not apply as strongly to extension area 2, to the east of the central area and containing 1,500,000 tonnes.  He thought that that area would probably come forward in 2022, but that the chances of planning success were 50%, making a cumulative success prospect of 32%.
30.	Extension area 3 lies to the south east of the central area and contains 1,500,000 tonnes.  Mr Symes considered that this would not be worked until around 2030 and that the planning chances were 50%, making a cumulative 16%.
31.	Mr Banton is an associate of Gerald Eve, chartered surveyors, currently working in that firm’s minerals department in London.  He is chairman of the London, south east and east minerals and waste management local faculty group of the RICS.  He was previously employed by RMC Aggregates (UK) Ltd, where he undertook estate management work for mineral companies within the RMC Group.
32.	Mr Banton approached the valuation exercise in two ways.  His first valuation, which he described as his preferred approach, reflected his view that at the valuation date a prospective purchaser might have speculated that there was a chance, however remote, that at a future date planning permission would be obtained for the subject land as an extension area to workings in the retained land.  He considered the chance of obtaining such planning permission to be so risky that it could not be accurately quantified, but he thought that a prospective purchaser would most probably base its purchase price on a 5% uplift on the agricultural value of the land.  Such a calculation would produce a figure of £5,223 for the minerals in the subject land, which he rounded up to £5,300.
33.	Mr Banton’s second method was to use the normal valuation methodology for a typical quarry or mineral reserve with planning permission.  He then discounted the resultant figure by two-thirds to reflect the risk that permission for mineral extraction would not be forthcoming.  His valuation on this basis was also £5,300 (Appendix 2).  Both valuations related only to the subject land, in view of the Mr Banton’s opinion that the value of the retained land was not affected by the acquisition.  
34.	The claimant suggested that the effect of the construction of MWEFAS was effectively to destroy the chances of obtaining planning consent to extract minerals from the retained land.  Mr Tucker was the claimant’s highways expert.  He is the principal of David Tucker Associates, transportation planning consultants of Stratford-upon-Avon.  In Mr Tucker’s opinion, no alternative means of access to the retained land could be satisfactorily accommodated after MWEFAS had been constructed.  He said that access to the A4 Bath Road from the retained land could now only be obtained either directly north to the A4 by crossing MWEFAS or to the south through Dorney Reach via Marsh Lane/Court Lane and Lake End Road.  He gave detailed consideration to four possible access options, three routeing traffic northwards and one southwards.  We summarise each in turn.  
35.	The first two options would both involve the construction of a new bridge over MWEFAS, leading to a road over the claimant’s land, with either a new access to the A4 or access to Marsh Lane opposite the houses in the northern part of that road, which currently forms the eastern boundary of the claimant’s ownership.  The acquiring authority had undertaken to provide a bridge at its own cost, in the event that planning permission was granted for mineral extraction from the retained land.  However, Mr Tucker considered that a new bridge over the channel was unlikely to be permitted, since it would have serious visual, ecological and other environmental implications in the area and the properties fronting Marsh Lane in particular.  
36.	The third option would involve access on to Marsh Lane south of MWEFAS, with vehicles coming to and from the A4 on a new road.  This option itself consisted of two alternatives.  The first would involve a new private road bypassing Marsh Lane.  Although this would be a relatively low cost option (Mr Tucker thought £330,670), and would minimise the impact of quarry traffic on properties fronting Marsh Lane, Mr Tucker considered that it had a number of disadvantages.  It would require the quarry vehicles to access and egress the local highway at three separate locations: the quarry access on to Marsh Lane south of MWEFAS; the access to the haul road north of MWEFAS and the A4 access.  Given the close proximity of the two accesses on Marsh Lane, the resulting level of HGV activity and turning manoeuvres over a relatively short distance would have a significant impact on local traffic and general amenity.  Moreover, the first 130 metres of the new haul route would run within the 100 metre buffer zone referred to in the Buckinghamshire minerals local plan, and would therefore require either a tree screen or an earth bund, which would have a major visual impact on the rural scene.  There would also be noise and dust impacts on the properties in Marsh Lane to the south end of the haul route.  
37.	Alternatively, Marsh Lane itself could be re-aligned through the site between the existing MWEFAS crossing and the A4 to the north.  This diversion would become a public highway open to all traffic, including quarry traffic.  The existing carriageway fronting the properties on Marsh Lane would then be relieved of extraneous through traffic and would be reduced in importance to a minor access to those properties.  This option would be much more expensive; Mr Tucker’s estimate was £865,450.  As with the first alternative, the associated impact of HGV movements on those properties located in the vicinity of the Marsh Lane diversion was likely to be material.  Whilst the road would be an adopted highway, it would carry HGVs associated with the quarry within the 100 metre buffer zone.  The visual impact of this option would be similar to that of the first alternative, but it would require denser landscaping as the road would be permanent.  The proposals would also introduce an “industrial” user element to Marsh Lane due to the high HGV usage.  Noise impact would be lower than for the first alternative due to the bound surface of Marsh Lane, but bunding and landscaping would nevertheless still be required.
38.	The fourth access option that Mr Tucker considered was one to the south of MWEFAS.  He said that if quarry traffic were to be routed to the south along Marsh Lane and along Court Lane and Lake End Road to access the A4 Bath Road, widening of Marsh Lane to a minimum of 6 metres road width would be required between the village of Dorney Reach and Court Lane.  The cost of this option was estimated at a £167,950.  In Mr Tucker’s opinion, whilst widening of Marsh Lane could be provided to allow adequate two-way working, this would result in a major visual impact by destroying the rural appearance of the lane and would not address the impact of the quarry traffic on the local communities, particularly Dorney Reach, Dorney and Lake End.  He felt that this was unlikely to be an acceptable solution to the local planning authority, in terms of the impact on the local environment from both the construction of the works and the subsequent traffic impact of the quarry operations.
39.	Evidence on the acquiring authority’s likely response to a future application for a bridge over MWEFAS was given by Mr Kean.  He has a degree in civil engineering and is the acquiring authority’s regional flood defence regulation engineer for the Thames Region Area.  Among other matters he described the history of the acquiring authority’s offer to provide a bridge and considered the acquiring authority’s likely response to future applications for the consents necessary to build the bridge.  He explained that, as a matter of public authority law, the acquiring authority could not provide a formal response until a properly detailed application was actually received.  That said, he could see no basis on which the acquiring authority would wish to object to the provision of a suitably designed and installed bridge at this position, either through use of its consenting powers or through its response as consultee to any planning application for the bridge.  He could also see no reason why the acquiring authority would raise significant practical difficulties which would prevent the claimant from obtaining planning permission for the bridge, if the claimant succeeded in obtaining planning permission for gravel extraction, or would prevent satisfactory operation of the haul route once in position. 
40.	In Mr Banton’s opinion as a valuer, it was impossible to be certain if or when planning permission for mineral extraction of the retained land would be granted.  The acquiring authority had offered to provide a suitable access and bridge.  Consequently, he did not consider that MWEFAS had altered the mineral planning possibilities on the retained land to such an extent that it would have a material detrimental effect on the value of that land.  He felt that any temporary loss of amenity when the bridge was provided might well be outweighed by the permanent amenity advantage of the permanent after use.  In Mr Banton’s view a mineral operator would assume that, if the local planning authority were persuaded that the case for extracting minerals was sufficiently strong to justify the grant of planning permission, then the access problems resulting from the construction of MWEFAS could also be satisfactorily overcome in one way or another.
41.	In preparing his valuation Mr Smith has applied directly a substantial amount of information which has been supplied by Mr Symes.  Thus, for example, where Mr Symes considered that there was a 64 per cent chance that planning consent to work extension area 1 would be granted in 2018, Mr Smith’s calculation started by assuming that planning consent was immediately available; it then applied a deferment factor until 2019 and multiplied the resultant value by 0.64.  Mr Banton did not consider that mineral operators were prepared to purchase reserves on that basis.  In his experience, if they were uncertain whether or when planning consent would be granted to extract mineral from a site, such operators would prefer to take a lease of or acquire an option to purchase the land, thus eliminating much of the risk.  Mr Banton said that in his personal experience, whenever mineral bearing land was purchased without a mineral planning allocation and without planning consent, the price paid was equivalent only to agricultural value or a little more.  
42.	Mr Smith accepted in cross-examination that straight sales of mineral bearing land were rare and that mineral companies preferred to acquire options to purchase land without planning permission.  He also agreed that minerals were often reserved from sales of agricultural land, with a view to them being leased to an operator at a future date.  
43.	Having given careful consideration to the evidence of the two valuation experts, we are satisfied that the approach of Mr Banton is to be preferred.  Our reasons are as follows.  Firstly, Mr Banton based his approach on his extensive experience of working for mineral companies.  Mr Smith, on the other hand, is not a specialist minerals valuer and appeared to us to base his calculations on a purely theoretical approach.  Moreover, we were concerned at the method he used to defer the mineral value of the retained land until the commencement of mineral working.  He explained this part of his calculation as follows:
“The delay in the sale of minerals must be taken into account when assessing the value as at the date of valuation (1996).  The reasonable assumption is to assess the value of the money (expressed as ‛one pound’ (£1)) in terms of the opportunity of other investments.  A ‛no risk’ investment would be to invest [in] a bank interest-earning account at (say) 2% under the UK base rate.  The UK base rate history is shown in the attached table and shows the rates on a monthly basis (whenever there is a change).  The average UK base rate from July 1996 to July 2001 is 6%.  The reasonable interest to assume for money invested in the future (from July 1996 onwards) is 4% per annum (base rate less 2%).  To invest in the minerals at Barge Farm, the purchaser is losing this opportunity interest.”
44.	In our judgment, it cannot be right to defer the possible future mineral value of the claimant’s land on the basis that it is a “no risk” investment.  The claimant purchased the land in 1935 as a mineral land bank and, despite several attempts, it has so far failed to obtain planning consent to work the minerals that lie beneath the surface.  There is certainly a possibility that planning consent will be granted at some time in the future.  There is, however, no guarantee that such consent will be forthcoming.  At one stage, Mr Smith himself described the purchase of mineral bearing land without planning consent as “a speculation” and we agree with that description.  Against that background, to defer the mineral value on the assumption that there is no risk is wholly unrealistic.  
45.	Mr Banton said that in 1996 his firm had valued hundreds of quarries and mineral resources with mineral reserves using a range of yields from 8% to 15%.  From 1997 onwards he had personally valued hundreds of quarries and mineral reserves, including land in Buckinghamshire and Berkshire, using the same range of yields.  We have no hesitation in accepting that evidence.  As we have said, however, Mr Banton’s preferred method of valuation was to apply a 5% uplift to agricultural value.  We accept that approach and find that the value attributable to the minerals in the subject land is £5,300.
46.	We have not overlooked the fact that Mr Smith referred to one outright sale of freehold mineral bearing land with the prospect of future consent for mineral extraction, where the price paid was substantially in excess of agricultural value.  The transaction in question was the sale by auction of a site of 105 acres just to the east of Heathrow airport.  The auction date was 5 July 1998 and the price paid was £3,250,000.  The land contained three million tonnes of gravel deposits, albeit without planning consent for their extraction, and was purchased by a waste management and minerals company.  Mr Smith said that the price paid, equivalent to £30,100 per acre, represented an “overbid” of some £26,500 on the agricultural value, for land in the green belt with no planning permission for mineral extraction or other non-agricultural use.  This equated to an overbid of 736% to reflect the minerals in the land.
47.	Mr Smith produced a copy of an article which appeared in a professional journal published a few weeks before the auction.  It read as follows:
“Jones Lang Wootton are offering in their July catalogue what must be the most valuable lot ever to come up for auction.  The 105-acre site, located just one mile from Heathrow airport, fronts four major roads including the A4 Bath Road.
Offered on behalf of a private investment trust, the site is designated green belt.  Most of the land is therefore undeveloped, but existing tenants could produce an annual income of almost £100,000 following current rent reviews.  There are also some 3 million tonnes of sand and gravel deposits within the site, which could be worth up to £6 million.
A recent report by a firm of consulting engineers suggests that, provided some road improvements are made, the site could hold 2,300 dwellings and 500,000 sq ft of high-tech space.  
‛In 10 years’ time, it could be another Stockley Park’ says JLW Associate John Smithers.  He adds that no guide price is being set although, with planning consent, the site could be worth, ‛well in excess of £100 million’.”
48.	In our view, Mr Smith’s analysis of this transaction is over-simplified.  Firstly, as he accepted in cross-examination, approximately £1 million of the price paid may well have reflected the existing use value of the tenanted buildings.  Secondly, as Mr Banton pointed out, the price may well be explained by the perceived prospect of obtaining planning permission for residential and/or commercial development, either instead of or after the extraction of the minerals and infilling the void created with inert waste.  We consider that the circumstances of this sale are such that the price paid is of no assistance in our task.
49.	We now turn to the claim for severance and injurious affection allegedly suffered by the retained land.  In our judgment, in the absence of MWEFAS, a mineral operator would have paid a similar price for the minerals in the retained land as for those in the subject property.  In the light of our finding as to the value of the minerals in the subject property, that price would have been £154 per acre (£5,300 divided by 34.41).  The claimant suggests that the effect of MWEFAS, with the retained land being effectively severed from the remainder, has been to reduce the prospects of working the retained land to nil, whereas the acquiring authority contends that it has made no difference at all.  There is no doubt, in our view, that it is still possible that, at some future date, the necessary consents will be granted to enable the minerals to be extracted from the land.  The volume of those deposits is significant.  The possibility that the need to extract them will one day be deemed sufficient to outweigh the environmental disadvantages of doing so is one that cannot in our opinion be excluded.  Nevertheless, we consider that the prospects of obtaining such consents have been significantly reduced by the presence of MWEFAS.
50.	A part of the ancillary objectives of MWEFAS was to enhance and improve the existing landscape by introducing a new wide river with islands and reed beds to the area.  Consequently, the improvement in the landscape which has resulted from implementation of the scheme will add force to the environmental objections which have resulted in previous applications for mineral extraction being turned down.
51.	The obvious means of gaining access to the A4 to enable the retained land to be worked would involve the construction of a bridge over MWEFAS.  The acquiring authority accepts that, and has agreed to bear the cost if and when the bridge is erected.  The desirability of the introduction of new bridges in the area was one of the important factors considered by the planning inspector in his report in September 1993, following the public inquiry into the CPOs.  Referring to the impact of MWEFAS on areas 3 and 4 of the proposal (the claimant’s land lies within area 3) he said:
“I find there are 3 main objections.  First, there is the visual impact of control structures and bridges.  I consider that the Amerden Lane bridge and Marsh Lane control structure and bridge would be intrusive elements in the landscape because of their size.  As such there is a planning objection to these aspects of the scheme which will have to be weighed against the need for the scheme and the consequent need for these structures…”
52.	Mr Kean confirmed that if a bridge were constructed to link the retained land with the claimant’s remaining land to the north, it would be some three times the length and height of the Amerden Lane and Marsh Lane bridges.  The positive recommendation from the MWEFAS inquiry inspector was made in the context of the need for the flood relief scheme as a whole, which he considered to be 
“serious and compelling on the basis of the long history of flooding in the area and the nature of the area.”
53.	Such a context is very different from the one which would be in the mind of a planning authority or inspector, considering a proposal to construct an additional bridge as part of a minerals application in the set and matured landscape that would exist after MWEFAS had taken full effect.
54.	The construction of a bridge as part of a programme of mineral working would, of course, have the benefit that the construction costs would be borne by the acquiring authority and not the minerals operator.  If, however, it were necessary to consider an alternative means of access, the costs of providing it would be a further factor - in addition to the planning difficulties to which Mr Tucker referred and which we accept - tending to render the retained land less attractive to a minerals operator.  
55.	As we have said, we consider that the value attributable to the minerals in the retained land in the no-scheme world would have been £154 per acre.  In our judgment, the deterioration in the planning prospects and the access position which have resulted from the scheme reduced that value to £75 per acre, a difference of £79 per acre.  The area of the retained land is 275 acres, giving a total reduction of £21,725.  
56.	We therefore determine that the amount of compensation payable to the claimant is £131,478, as follows:
Subject land - surface value		£104,453	
Subject land - minerals		£5,300	
Severance/injurious affection		 £21,725
	£131,478	

57.	We have also considered the value of the minerals in the subject land on the assumption that, contrary to the conclusion that we have reached, that land is to be valued with the benefit of planning consent for mineral extraction.  On that basis, our valuation would be £850,000 (see Appendix 3).
58.	A letter on costs accompanies this decision, which will take effect when, but not until, the question of costs is decided.
						Dated 16 June 2003

						George Bartlett QC, President
						N J Rose FRICS
ADDENDUM ON COSTS
59.	We have received written submissions from the parties on costs.
60.	The award of costs in this case is governed by the provisions of section 4 of the Land Compensation Act 1961, and the general principles established by authority, notably the recent decision of the Court of Appeal in Purfleet Farms Ltd v Secretary of State for Transport, Local Government and the Regions [2002] RVR 368.  The acquiring authority made a sealed offer on 3 February 2003 of a sum in excess of that awarded.  Different considerations apply to the costs incurred before and after that date. 
61.	For the period after the making of the sealed offer the relevant provision is this:
“4.–	(1) Where either –
	(a)	the acquiring authority have made an unconditional offer in writing of any sum as compensation to any claimant and the sum awarded by the Lands Tribunal to that claimant does not exceed the sum offered; or
	(b)	…
the Lands Tribunal shall, unless for special reasons it thinks proper not to do so, order the claimant to bear his own costs and to pay the costs of the acquiring authority so far as they were incurred after the offer was made ….”
The claimant does not suggest that there are any special reasons for departing from the rule laid down in this provision.  There is thus agreement that the claimant should bear its own costs and pay those of the authority after the date of the sealed offer. 
62.	There is dispute, however, about the costs incurred in the period before the sealed offer.  The acquiring authority seeks a further order that the claimant be responsible for its own costs and those of the acquiring authority up until the date of the sealed offer.  It says that notice to treat was deemed to have been served on the claimant on 17 July 1996.  The claimant should have submitted a claim in writing to the acquiring authority promptly following the deemed notice to treat, detailing its claim under separate heads and showing how the amounts claimed were arrived at.  Although the claimant eventually submitted a written claim on 4 December 1998, it did not give the particulars of its claim at that time.  The amounts claimed were not quantified until 18 July 2002, subsequent to the reference to the Tribunal which was made on 30 May 2002.
63.	The claimant says that it had difficulty in quantifying the amount of its claim, because its agent was unable to obtain any satisfactory or timely responses from the acquiring authority’s agents on the principles to be applied in calculating the claim.  As soon as the claimant was asked to provide a breakdown of its claim by the acquiring authority’s then solicitor, however, on 18 July 2002, the claimant provided the breakdown requested.  Moreover, the claimant shortly thereafter provided the acquiring authority with a copy of the detailed calculation of the claim contained in Mr Smith’s report.  The acquiring authority was not in any way prejudiced, nor put to any additional cost in this respect, and the claimant acted in good faith towards the acquiring authority throughout the matter.  The claimant also points out that its claim that the retained land had been injuriously affected succeeded in principle, although not in terms of quantum and, contrary to the acquiring authority’s suggestion, it submits that its response to the acquiring authority’s request for an extension of the time limit for lodging expert reports beyond 18 July 2002 was reasonable.
64.	The relevant provisions for the period before the authority’s sealed offer are contained in subsections (1), (2) and (3) of section 4.  So far as relevant, these provide:
“(1)  Where …
(b)	the Lands Tribunal is satisfied that a claimant has failed to deliver to the acquiring authority, in time to enable them to make a proper offer, a notice in writing of the amount claimed by him, containing the particulars mentioned in subsection (2) of this section;
the Lands Tribunal shall, unless for special reasons it thinks proper not to do so, order the claimant to bear his own costs and to pay the costs of the acquiring authority so far as they were incurred …after the time when in the opinion of the Lands Tribunal the notice should have been delivered.  
(2)	The notice mentioned in subsection (1) of this section must state the exact nature of the interest in respect of which compensation is claimed, and give details of the compensation claimed, distinguishing the amounts under separate heads and showing how the amount claimed under each head is calculated.
(3)	Where a claimant has delivered a notice as required by paragraph (b) of subsection (1) of this section and has made an unconditional offer in writing to accept any sum as compensation, then, if the sum awarded to him by the Lands Tribunal is equal to or exceeds that sum, the Lands Tribunal shall, unless for special reasons it thinks proper not to do so, order the acquiring authority to bear their own costs and pay the costs of the claimant so far as they were incurred after his offer was made.”
65.	Thus there are three sets of circumstances in each of which it is mandatory for the Lands Tribunal to make a particular order for costs unless for special reasons it thinks it proper not to do so.  They are:
(a)	Where the acquiring authority have made an unconditional offer which is not exceeded by the amount of the award: here the claimant bears his own costs and pays the authority’s costs after the date of the offer (subsection (1)(a)).
(b)	Where the claimant has failed to deliver a particularised claim to the acquiring authority, in time to enable them to make a proper offer: here the claimant bears his own costs and pays the authority’s costs after the time when the claim should have been delivered (subsection (1)(b)). 
(c)	Where the claimant has made a particularised claim and has also made an unconditional offer to accept a sum as compensation and the award is equal to or exceeds that sum: here the acquiring authority bear their own costs and pay the claimant’s costs after the date of the offer (subsection (3)).
66.	The section makes no provision for costs in the following circumstances:
(d)	Where the acquiring authority have made an unconditional offer which is exceeded by the award, but the claimant has made a claim but no offer.
(e)	Where the claimant has made a claim and has also made an offer which is for more than the sum awarded, but the acquiring authority have made no offer.
(f)	Where the claimant has made a claim but has not made an offer, and the acquiring authority also has not made an offer.  
(g)	The period up to the time when the claim should have been delivered. 
In these latter four sets of circumstances costs are in the discretion of the Tribunal in the exercise of its general power to award costs under section 3(5) of the Lands Tribunal Act 1949.
67.	The provisions of section 4 of the 1961 Act are essentially the same as those that were originally contained in section 5 of the Acquisition of Land (Assessment of Compensation) Act 1919.  Before then, under sections 34 and 51 of the Land Clauses Consolidation Act 1845, the costs of an arbitration or assessment by a jury were to be borne by the promoters unless the award was no greater than such sum as the promoters had offered, in which case each party bore its own costs.  The 1919 Act was the outcome of a report by Sir Leslie Scott KC and it embodied the principle stated by him (as Scott LJ) in Horn v Sunderland Corporation [1941] 2 KB 26 at 49:
“The statutory compensation cannot, and must not, exceed the owner’s total loss, for, if it does, it will put an unfair burden on the public authority or other promoters who on public grounds have been given the power of compulsory acquisition, and it will transgress the principle of equivalence which is at the root of statutory compensation, the principle that the owner shall be paid neither less nor more than his loss.”
68.	The Act marked the end of the era of compulsory purchase compensation in which the most important influence on the development of the law and valuation practice had been the railways.  A landowner whose land was acquired compulsorily so that it could earn profits for a railway company tended to be the subject of generous treatment.  It became a rule of practice to add 10% to the assessed value of the land.  A claimant could opt to have his compensation assessed by a jury rather than by an arbitrator, and juries were notoriously generous.  The costs regime that we have referred to reflected this general approach.  The Scott report and the 1919 Act started the new era in which the emphasis was on compulsory acquisition for public purposes and the overriding rights of the community: see Law Commission Consultation Paper No 165 “Towards a Compulsory Purchase Code: (1) Compensation” (July 2002) paras 2.3 to 2.5.
69.	The principle of equivalence required that the landowner should be paid neither more nor less than his loss; and the reason why he ought not to be paid more than his loss was that this would, as Scott LJ put it, “place an unfair burden on the public authority or other promoters who on public grounds have been given the power of compulsory acquisition.”  Thus the 1919 Act abolished the 10% addition (rule (1) in section 2), and it also established a new costs regime embodying the prescriptive provisions that survive into the present law.  The Official Arbitrators, who were established by the Act to determine disputed compensation claims in place of juries (and magistrates and arbitrators), were given the power to award costs, but their discretion was circumscribed by the terms of section 5.
70.	On the face of it, apart from the consequence of a claimant failing to deliver a particularised claim, section 4 makes directly comparable provision for claimant and acquiring authority alike in terms of the effect of offers.  Either party is able to protect itself by making an offer.  If the compensation awarded does not exceed the acquiring authority’s offer, the claimant must bear its own costs and pay the costs of the acquiring authority.  If the compensation awarded is equal to or more than the claimant’s offer, the acquiring authority must bear its own costs and pay the costs of the claimant.  Given these particular provisions that enable a party to protect itself in costs by making an offer, it is not immediately apparent why, under the scheme of the provisions, a party that has not made an offer should receive an award of costs in its favour.  It became the practice of the Lands Tribunal, however, where the acquiring authority had made a sealed offer, to award the claimant his costs up to the date of the offer even though he had not himself made an offer, and to award costs after the date of the offer either to the claimant or to the acquiring authority, depending on whether the sum determined as compensation was more or less than the offer.  A successful claimant could, however, be deprived of some or all of his costs if there was a special reason for doing so.
71.	The rationale for this approach is expressed in the judgment of Lord President Hope in Emslie & Simpson Ltd v Aberdeen District Council [1995] RVR 159 at 164:
 “The expenses of determining the amount of disputed compensation may be seen to be part of the reasonable and necessary expense which is attributable to the taking of the lands compulsorily by the acquiring authority.  The principle which applies to litigation as applied by Lord President Robertson in Shepherd v Elliott and quoted by Maclaren on Expenses at p 21 is that the cost of litigation should fall on him who caused it.  The cost of determining the amount of the disputed compensation would seem, according to this principle, to fall on the acquiring authority without whose resort to the use of compulsory powers there would have been no need for the owner or occupier to be compensated.  That seems to me to be the proper starting point for an examination of the question of expenses in these cases.” 
72.	The appropriateness of the Lands Tribunal adopting this approach, which, as we say, is not obviously to be derived from the apparent scheme of section 4, is established by two decisions of the Court of Appeal.  In English Property Corporation v Kingston upon Thames RBC [1999] RVR 316 a decision of the Lands Tribunal on costs was upheld in terms that Potter LJ in Purfleet Farms (at [2002] RVR 368, 373 para 28) described as a tacit endorsement of the observations of Lord President Hope (and those of Lord Morison to the same effect) in Emslie & Simpson.  It is, we think, equally clear from the judgments in Purfleet Farms (see Potter LJ at paras 21 to 35 and Chadwick LJ at 42 to 43) that the general rule adopted by the Tribunal and the reasons for doing so as set out in Emslie & Simpson were considered by them to be correct.
73.	Applying this approach in the different circumstances set out above, a claimant would, in general, we think, get all his costs, in (c), (d), (e), (f) and (g).  Only in (a) and (b) would he have to pay the authority’s costs.  In all cases, however, the Tribunal would be able to depart from the general rule if there were special reasons for doing so.  In the present case, (a) applies; and so the claimant pays the authority’s costs after the date of the sealed offer (3 February 2003).  We can see no special reasons why it should not do so.  For the period before that, applying the general rule, the claimant ought to have its costs unless either there are special reasons why it should not have all or part of them or section 4(1)(b) (failure to submit a timely claim) applies and there is no special reason for depriving the authority of its costs after the date by which a claim should have been submitted.  On the claimant’s contentions the circumstances for the period up to 3 February 2003 are (g) and (f); and on the acquiring authority’s contentions it is (b) that applies.
74.	Notice to treat was deemed to have been served on 17 July 1996.  Although the claimant submitted a claim in writing on 4 December 1998, the amounts claimed were not quantified until 18 July 2002.  We can see no reason why the claimant should not have submitted a particularised claim within a few months of the deemed notice to treat.  We reject the suggestion that it needed to agree with the authority the principles to be applied in calculating the claim.  Its advisers were capable of forming their own view on this.  A claim should have been delivered, in our view, within 3 months, ie by 17 October 1996.  Although a claim was delivered on 4 December 1998, it did not contain the details specified in section 4(2).  It was only on 18 July 2002 that a claim complying with that provision was made.  The authority, having received this detailed claim, ought to have been in a position to make an offer, in our view, within 3 months after that, ie by 18 October 2002.   
75.	There are thus four periods to be considered:
(i)  From 17 July 1996 (when notice to treat was deemed to have been served) to 17 October 1996 (the date by which it should have delivered a detailed claim).  The circumstances are those in (g).
(ii)  From 18 October 1996 to the date (three months after the detailed claim that was in due course made) by which the acquiring authority could reasonably have made an offer (18 October 2002).  The circumstances are those in (b).
(iii) From 19 October 2002 to the date of the sealed offer (3 February 2003).  The circumstances are those in (f).
(iv)  After 3 February 2003.  The circumstances are those in (a).  
76.	The claimant is entitled to its costs for period (i) and the acquiring authority are entitled to their costs for period (iv).  For period (ii) the acquiring authority are entitled to their costs under section 4(1)(b) unless there are special reasons against this.  For period (iii) under the general rule the claimant should have its costs unless there are special reasons why it should not.  It remains to be considered, therefore, whether in respect of each of those periods there were such special reasons.
77.	As far as period (ii) is concerned, there are, we think, undoubtedly circumstances in which an acquiring authority do not need all the details referred to in subsection (2) in order to make an offer.  If they know the interest in respect of which the claim is made and if they know that there is no claim for severance, injurious affection or disturbance, their valuer may well be in as good a position as the claimant’s valuer to value the land and thus enable the authority to make an offer.  Failure by the authority in these circumstances to make an offer could, in our view, amount to a special reason to deprive the authority of the costs to which they would otherwise be entitled under section 4(1)(b).  It is to be noted that the giving of notice of the details of the claim has the effect of bringing section 31(1) of the 1961 Act into operation.  Under this provision the acquiring authority are able to withdraw the notice to treat at any time within six weeks of the delivery of such notice.  We do not, however, see this provision (or section 31(2), which enables an authority to withdraw the notice to treat after the determination of compensation by the Lands Tribunal where the claimant failed to provide details of his claim) as suggesting that giving the details referred to in section 4(2) is necessarily a prerequisite of any action that the authority might reasonably be expected to take to reach agreement on the amount of compensation.   
78.	In the present case, however, it was not established that the claimant would be seeking compensation for severance and injurious affection until 18 July 2002.  Those aspects of the claim required detailed investigation and consideration, which would not have been necessary if the claim had been restricted to the value of the land taken (including the minerals within it).  In those circumstances, the acquiring authority were not, in our judgment, in a position to consider making a proper offer until the detailed claim was received.  We can see, therefore, no special reasons for depriving the acquiring authority of their costs incurred between 18 October 1996 and 18 October 2002.
79.	As for period (iii) the particular matter that falls to be considered, in our view, is the great disparity between the amount claimed, £3,560,000, and the amount of our award, £131,478.  The approach to be adopted in considering whether this great disparity should be reflected in the award of costs is set out in the judgments of Potter and Chadwick LJJ in Purfleet Farms.  At [2002] RVR 368, 375 Potter LJ said this:
“36.  I accept counsel for the claimants’ submission that, if as a result of applying the principles of ordinary litigation to the hearing of compensation references, the Lands Tribunal adopts a practice of ‘ready departure’ from the principle that the claimant is entitled to his costs in the absence of a special reason to the contrary, that would involve a change of approach which has previously and properly been adopted in compensation reference cases.  However, I equally consider that, in exercising the wide discretion under s 3(5) of the 1949 Act and r 52(1) of the 1996 Rules, and in considering the question of whether or not special reason exists to depart from the usual order, it may usefully ‘have regard’ to the matters set out in para 19.2 of the Lands Tribunal Practice Directions including whether or not the claimant has exaggerated his claim.  In considering that last question, however, exaggeration alone is not enough in the event of a large disparity between the sum claimed and the sum awarded.  The matters to which the tribunal should have regard are (a) the reasons for that disparity and (b) their effect upon the conduct of the claim.  As to (a), if the reasons are defensible, in the sense that there was a legitimate, albeit unsuccessful, argument put forward in support of the figure concerned, there can be no good reason to regard the claim as exaggerated in the pejorative sense necessary to justify a sanction in costs.  As to (b), if, in any event, the effect of the proceedings in terms of the time spent and the costs incurred in disposing of the issue or argument concerned is relatively insignificant, then again an adverse order is unlikely to be appropriate.
37.  Turning to the question of expert evidence, if the amount of the ‘exaggerated’ claim is based on the valuation, opinion and evidence of the claimant’s expert witness, it will rarely be appropriate in my view to make an adverse costs order against the successful claimant.  Valuation is an inexact science…”
80.	At 376 at para 42 Chadwick LJ referred to section 4(1)(a) of the 1961 and its requirement that, where it applied, the Tribunal must, in the absence of special reasons, leave the claimant to bear his own costs of pursuing the reference after the offer has been made.  He then went on :
“43.  It follows that the fact that the claimant has not been awarded as much as he was seeking by way of compensation – or that the award is nearer (even much nearer) to the amount that the acquiring authority had offered than the amount sought – cannot, of itself, be a reason for depriving the claimant of his costs of the reference.  But that does not lead to the conclusion that the claimant’s conduct in exaggerating his claim can be of no relevance.  The tribunal may be satisfied, in the particular case before it, that the fact that the claimant has exaggerated his claim has led to costs which were not reasonable for the claimant to incur in pursuit of the compensation to which he was entitled; or that it has been the pursuit of issues which it was not reasonable for the claimant to pursue that has led to the exaggeration of the claim.  Where the tribunal makes an award of compensation which is well below the amount claimed, it is appropriate for it to consider, in the context of an award of costs, both whether the fact that the claim was exaggerated has led the claimant to incur costs which (given a more realistic evaluation of his claim) he would not have incurred and whether the explanation for the difference between the award and the amount claimed is that issues were pursued on which the claimant had no real chance of success.”
81.	Applying the approach set out in these judgments, we see no reason to regard the arguments advanced in support of the claim figure as other than legitimate.  While we have rejected the expert evidence on which the very substantial claim was based, we have not done so on the basis that no competent expert could have reached the conclusions that were reached in that evidence.  The claim was one, therefore, that it was not unreasonable for the claimant to pursue, and we see no special reason for depriving the claimant of its costs for period (iii).
82.	The result of these conclusions is as follows.  The acquiring authority must pay the claimant’s costs for the period up to 17 October 1996 and for the period from 19 October 2002 to 3 February 2003.  The claimant must pay the acquiring authority’s costs for the periods from 18 October 1996 to 18 October 2002 and after 3 February 2003.  Such costs if not agreed will be subject to detailed assessment by the Registrar on the standard basis.  
						Dated 14 August 2003

						George Bartlett QC, President
						N J Rose FRICS

Appendix 1

Land at Barge and Amerden Farms, Taplow, Bucks.
Valuation by P J Smith MRICS

Land Taken - Mineral Value	
	Area	12,000 m2	
	Depth	4.5 m	
	Quantity	528,000 tonnes	
	Output	264,000 tonnes p.a.	
	Value	£2 per tonne	
	Period of Operation	2 years	
	YP for 2 yrs @ 4%	1.8861	

Calculation

£2 x 264,000 x 1.8861 =	

				£995,860	
		
Severance/injurious affection	
Central Area		
	Quantity	2,000,000 tonnes	
	Annual Output	200,000 tonnes per annum	
	Start Year	2008	
	Finish Year	2018	

Deferment of mineral extraction 12 years (ie delay until planning permission is obtained to extract minerals).
	
	Period of Operation	10 years	
	UP for 10 yrs @ 4%	8.1109	
	Value per tonne	£2 tonne as at 1996	
	Prospect of Planning		
	Permission	80%	

Calculation

£2 x 200,000 x 0.6245970 x 8.1109 x 0.80		£1,621,134	

Extension Area 1	
	Quantity	700,000 tonnes	
	Annual Output	175,000 tonnes per annum	
	Start Year	2019	
	Finish Year	2023	

Deferment of mineral extraction 23 years (ie delay until planning permission is obtained to extract minerals).
	
	PV of £1 for 23 yrs @ 4%	0.4057263	
	Period of Operation	4 years	
	YP for 4 yrs @ 4%	3.6299	
	Value per tonne	£2 tonne as at 1996	
	Prospect of Planning		
	Permission	64%	

Calculation

£2 x 175,000 x 0.4057263 x 3.6299 x 0.64	

			£329,895	
		
Extension Area 2		
	Quantity	1,500,000 tonnes	
	Annual Output	188,000 tonnes per annum	
	Start Year	2023	
	Finish Year	2031	

Deferment of mineral extraction 26 years (ie delay until planning permission is obtained to extract minerals)
	
	PV of £1 for 26 yrs @ 4%	0.3606892	
	Period of Operation	8 years	
	YP for 8 yrs @ 4%	6.7327	
	Value per tonne	£2 tonne as at 1996	
	Prospect of Planning		
	Permission	32%	

Calculation

£2 x 188,000 x 0.3606892x 6.7327 x 0.32	

£292,186	

Extension Area 3	
	Quantity	1,500,000 tonnes	
	Annual Output	214,000 tonnes per annum	
	Start Year	2031	
	Finish Year	2038	

Deferment of mineral extraction 35 years (ie delay until planning permission is obtained to extract minerals)
	
	PV of £1 for 35 yrs @ 4%	0.2534155	
	Period of Operation	7 years	
	YP for 7 yrs @ 4%	6.0021	
	Value per tonne	£2 tonne as at 1996	
	Prospect of Planning		
	Permission	16%	

Calculation

£2 x 214,000 x 0.2534155 x 6.0021 x 0.16	

			£104,159	

Total of claims for severance	
	Central Area		£1,621,134	
	Extension 1		£329,895	
	Extension 2		£292,186	
	Extension 3		£104,159	

Total severance/injurious affection claim  	£2,347,374	

TOTALS OF CLAIM		

LAND TAKEN	
Minerals		£995,860	
	Surface Value		£104,453	
			£1,100,313	
SEVERANCE/INJURIOUS AFFECTION	£2,347,374	

TOTAL CLAIM	
		£3,447,687	

Appendix 2

Land at Barge and Amerden Farms, Taplow, Bucks
Alternative Quarry Valuation of Land Acquired
by M J S Banton, BSc, MRICS, AMIQ

Royalty	£2/tonne			

Annual Sales	
150,000 tonnes			

Annual Income 	=	
Royalty x Annual Sales			
	=	£2 x 150,000t = £300,000			
				
Reserves	=		550,000 tonnes			
				
Life 	=		Reserves  	=	    550,000 t   
Annual Sales	150,000t/year	=	3.67 years		

Years Purchase	
3.67 years @ 10%	
=	2.9516		
Deferred	   42 years @ 10%	=	0.0183		
				
Chance of obtaining planning permission	=	33%		
				
Valuation	=	2.9516 x 0.0183 x 33% x £300,000		=	£5,347	

		say	
£5,300	

Appendix 3

Land at Barge and Amerden Farms, Taplow, Bucks
Lands Tribunal’s Alternative Mineral Valuation of Land Acquired
Assuming Mineral Planning Consent

Quantity	528,000 tonnes
Output	150,000 tonnes p.a.
Value	£2 per tonne
Period of operation	3.5 years
Y.P for 3.5 years @ 10%	2.8284
Annual income:	£2 x 150,000 = £300,000
Value:	£300,000 x 2.8284 = £848,520
		say	£850,000