[2000] EWLands ACQ_90_1999 (25 February 2000)
ACQ/90/1999
	
	LANDS TRIBUNAL ACT 1949
	
COMPENSATION – Purchase Notice under s137 of the Town and Country Planning Act 1990  Sched. 3 – re-development assumptions - value of freehold - Compensation awarded  £7,500.

IN THE MATTER of A NOTICE OF REFERENCE

BETWEEN	
	
	ANTHONY WHITING (1)	Claimants
	GARETH WYN JONES (2)	

	and
		
	WYCHAVON DISTRICT COUNCIL	Respondent

	Re: Land at Former Railway Station, Fladbury, Worcestershire.

	Tribunal Member: P.R.Francis FRICS

	Sitting at: Birmingham Rent Assessment Panel,
	 Somerset House, 37 Temple Street, Birmingham.
	on
24 January 2000

The following cases are referred to in this decision:
Sorrell v Maidstone Rural District Council (1961) 13 P&CR 57 LT
London Residuary Body v Secretary of State for the Environment [1989] 3 PLR 105
White v Richards [1993] 68 P&CR 105

Thomas Hill of counsel, instructed by Broadbridge Grimes, solicitors of London, for the claimants.
David Park of counsel, instructed by Timothy Belcher, solicitor to Wychavon District Council, for the respondent.

© CROWN COPYRIGHT 2000

DECISION

1.	This is a reference, heard under the Simplified Procedure (rule 28, Lands Tribunal Rules 1996) to determine the compensation payable by Wychavon District Council (“the Council”) to Old England Properties Limited (of which Messrs Whiting and Jones are the directors) (“the claimants”), for land at Fladbury Station, Fladbury, Worcs (“the subject property”) in connection with a Purchase Notice (“the Notice”) served under s137 of the Town and Country Planning Act 1990 (“the 1990 Act”). 
2.	Mr. Thomas Hill of counsel appeared for the claimants and called Gareth Wyn Jones BSc FRICS ACI Arb IRRV of Jones Granville, Chartered Surveyors of London (and a director of the claimant company), to give valuation and background evidence.    Mr. David Park of counsel appeared for the respondent, and called Michael J. Inscoe FRICS FAAV of Inscoes, Chartered Surveyors of Wolverhampton, to give valuation evidence.
3.	The parties had prepared a brief statement of agreed facts from which, together with the written evidence, that given orally at the hearing and my site inspection, I find the following facts:
3.1	The subject property has a site area of 0.46 acres (0.186ha) and forms part of the former Fladbury Railway Station and its adjacent goods yard, both of which closed in 1966.   It is approached over a steep access drive from Station Road.   The site is elongated and contains, along the southern boundary, a vehicular access to the adjacent allotments.  
3.2	The land was subject to a Demarcation Agreement between British Railways Board and Railtrack Limited (under the Railtrack Transfer Scheme) dated 14 February 1996, with reserved rights of access to Railtrack over the land to a field gate on the western boundary.  There is also a storage building, centrally located, with rights reserved. 
3.3	The claimants, through their company, acquired the site at public auction in 1997, and following the refusal of a planning application for the erection of two dwellings, a Purchase Notice under s.137 of the Town and Country Planning Act 1990 was served on the Council in October 1998, and accepted by it in January 1999.
3.4	A claim was submitted to the Council in March 1999 in the sum of £34,700.   This was rejected.
3.5	For the purposes of Sched.3 of the 1990 Act, the parties have agreed that as at 1 July 1948 there were single storey buildings on the land believed to comprise ticket office, waiting room, store and toilets.   The area they covered had been grossed up to an agreed 1,286 sq.ft. (119.47 sq.m.).
3.6	The date of valuation, as the Council had not yet taken possession, is the date of the Lands Tribunal hearing – 24 January 2000.
3.7 	The Notice of Reference was dated 23 June 1999.

Issue
4.	The sole issue for me to determine is the value of the subject property as at the hearing date.    
Claimants Case.
5.	 Mr. Hill said that due to the fact that the value of the property was to be determined as at January 2000, the claimants had increased their claim to £40,000 to take account of movement in the market since the claim was submitted in March 1999.   The claimants’ revised valuation and breakdown was handed in.     
6.	In setting out the background, Mr. Hill said the subject property occupied a prominent site adjacent to the railway bridge which carried the main road into Fladbury, a prosperous and sought after village, from the A.4538 Evesham to Pershore Road.   It had formerly been the village’s railway station, and used to contain the ticket office, waiting room, toilets and stores, which had remained until the station was closed in 1966.    He said that those buildings, in planning terms, would have been considered to be a mixed commercial user, for example, mixed offices, storage and ancillary toilets.    In establishing the basis of valuation in this instance Mr. Hill said that s.15(3) of the Land Compensation Act 1961, which cross-refers to Scheds. 3 and 10 of the 1990 Act prescribes the valuation assumptions which do not derive from the Development Plan.   Thus there is a statutory assumption (for the purposes of assessing value) that permission will be granted for a replacement of what was on the land at 1 July 1948.    Mr. Hill said it is therefore a fictional exercise, as laid down by statute, and I do not, therefore, have to consider such factors as quality of buildings, landscaping or other requirements that might prevail today.
7.	Mr. Jones is a director of the claimant company, and sole principal of his Chartered Surveying practice.   He said he undertakes valuation work, acquisitions and disposals throughout the U.K.    He and his business partner had considered the subject property to be brown land that had potential for the erection of two residential units, and thus their company acquired it speculatively in 1997.  However, as permission was refused, a Purchase Notice was served on the Council, and accepted, and the claim for compensation was being assessed on the basis of the commercial development value in accordance with the provisions of the 1961 Act.
8.	In Mr. Jones’ opinion, once account was taken of configuration of the site, it had a net developable area of about 0.2 acres.     The nature of the entrance, the bank at the rear of the site that supported the access track to the adjacent allotments (which was in their ownership, but which could not be developed), the retained Railtrack shed, and the need to leave a route through for the Railtrack vehicles were the factors that restricted the area upon which buildings could be erected.   It was his view that the reserved right of access for the Railtrack vehicles, according to the plan accompanying the demarcation agreement was of insufficient width for vehicles of the size used by Railtrack (which are often over 3 m. wide), and thus he had added £2,500 to his valuation of the site to reflect the perceived negotiating position.  He said that a track of sufficient width could be provided along the railway boundary leading to the gate at the western end, whilst still leaving room for the development.    As to the Railtrack shed, Mr. Jones said that there was provision in the demarcation agreement for it to be moved elsewhere on the site (from its current central and inconvenient position), subject to agreement.   He also thought it might be possible to negotiate its removal from the site, and relocation on Railtrack’s adjacent land.
9.	The development, Mr. Jones said, would most appropriately be something like a retail farm shop, some other quasi-agricultural use such as the sale and repair of farm machinery, a small garage/repair workshop or a retail warehouse outlet.   In his opinion, due to the unavailability of comparable semi-rural sites, there would be market demand from owner occupiers who would be prepared to pay up to £40,000 for the opportunity to build premises to suit their requirements.   The site had good access and was visible from the road, although in cross-examination he conceded that turning in was difficult from the bridge side (especially for large vehicles) and the road into the village was not particularly busy.  As to the narrow entrance to the site, he said that any potential occupier would be unlikely to need large heavy goods vehicles, such as articulated lorries, which would not be able to turn within the confines of the site.   Also in cross-examination he accepted that one of the major areas of dispute between the claimant and the Council was the interpretation of the relevant part of the 1990 Act, in that the Council contended the development would have to be a direct replacement of the station buildings, with a user “not materially different from” station purposes.   
10.	In preparing his valuation, Mr. Jones said he had been assisted by a letter from Healey & Baker, International Property Consultants, and from the comparables he produced.   He estimated the completed development (of 1,286 sq.ft.) would have a rental value of £5.30 per square foot and would be likely to let on a standard full repairing and insuring lease for a minimum term of five years.   At a yield of 8.25% this gave a capital value, for investment purposes, of £82,615 or £64.23 per sq.ft.
11.	Building costs had been estimated (on the advice of a quantity surveyor) on the basis of 415 sq.ft. retail space at £31 per sq.ft. and the remainder at £26 per sq.ft., (£35,511) to which a 3% contingency (£1,065), 10% fees (£3,551), finance costs (£1,864) and developers profit (£3,500) were added, giving a total development cost of  £45,491.  This was a difference of £37,124 to which should be added the £2,500 Railtrack negotiating value, giving a total site value of £39,624 – say £40,000.   The developers profit could probably, he said, be excluded if the development were by an owner-occupier.   Mr. Jones thought the building contract would go to a local company and that V.A.T. would be re-claimable due to the end user being likely to be registered.   He accepted that this small project would not achieve, in building cost savings, the economies of scale that would be obtainable for larger developments such as industrial parks where contracts would be put out to tender.
12.	Under cross-examination, Mr. Jones said that he had allowed for service installations in the overall construction costs, although he had not undertaken any investigations as to the availability thereof, particularly in respect of three-phase power, and he accepted that drainage costs may be high due to site levels being lower than the road.    He said that the figure included in Mr. Inscoe’s report relating to the costs of landscaping were not appropriate as no such works would be required and even if they were, did not need to be taken into account for the purposes of the Sched.3 valuation.    However, he accepted that some car parking would be needed and agreed that works would need to be done to the fencing on the railway boundary to keep children off the line.    Mr. Jones also admitted that no ground investigations had been undertaken before they acquired the site, and they had not commissioned a contamination report.
13.	Mr. Jones’ first comparable, and in his opinion the most appropriate, was Unit 23 at Bond Industrial Estate, Wickamford, Near Evesham.   This was a small edge-of- village estate of 24  “starter” type units with a narrow access road onto the main A.44 Evesham to Oxford Road.   Wickamford was less attractive than Fladbury, the estate was not prominent but the type of user was similar to that envisaged at the subject property.   The units were crammed together, with no external storage space and limited parking.   Unit 23 was a basic industrial unit with 344 sq.ft. ground floor space, and 418 sq.ft. offices at first floor.   It had been let in November 1999 for six months certain, terminable thereafter on 6 months notice, at £5,200 p.a. (£6.80 per sq.ft.).    In cross-examination, Mr. Jones accepted that there was parking on the site, but this was a communal area away from the unit.  He did not agree that the direct access to the A.44 was a benefit, as it was too narrow for heavy goods vehicles to pass, and, being between two houses, the entrance was not readily visible.
14.	Secondly, he referred to Haddonsacre Estate at Offenham which was a large village, two miles from Evesham.   The site was located on the edge of the village, fronting a country lane and away from other properties.   It comprises two large former commercial workshops that have been converted to office units, the majority of which are now let to a number of occupiers at rents ranging from £6 to £9 per sq.ft.   Available units are being marketed at £10 to £11 per sq.ft.   He said that this development is more remote than the subject property, is difficult to find and is in a less prosperous area, but as they were offices his estimate of rental value for Fladbury was somewhat less.     He accepted, in cross-examination, that the Haddonsacre development is over four times the size of the subject, that it was a different use than that proposed at Fladbury, and whilst agreeing that the environment had been made attractive by an extensive landscaping scheme, the quality of the offices was poor, being re-constituted sheds.    
15.	Mr. Jones’ final comparable was Vale Park Industrial Estate at Evesham.    This is a new business Park on the edge of the town, having excellent main road frontage, and comprises industrial/B.8 units (with only very limited retail opportunities).   The buildings, varying from 1,615 sq.ft to 2,960 sq.ft. in the Greengarth phase, were being constructed to a very basic ‘shell and core’ finish and were for light industrial (B1), and warehouse (B.8) use.   The units were for sale at figures which, at a 10 per cent yield represented £5.00 per sq.ft., and at 9% yield became £4.50 per sq.ft.   In cross-examination, Mr. Jones agreed that, on a 10 per cent yield, the sales gave a capital value of £50 per sq.ft., against £64 per sq.ft. for the subject property, but said the circumstances were different in that Vale Park was a large industrial estate, and Fladbury was a ‘one-off’.
16.	Whilst acknowledging that none of his comparables bore any direct resemblance to what he was postulating for the subject property, he said the rental values and yields gave a broad overview as to what the market would pay for what was a unique opportunity.    
17.	In respect of the demarcation agreement, and his assumptions regarding the Railtrack access requirement, and their shed, Mr. Jones admitted that there was no correspondence, although there was an ongoing dispute (over which he did not elucidate).  He said he had seen the type of vehicles Railtrack used, and he thought they were wider than the width of the track as depicted on the plan, therefore they (Railtrack) would need to negotiate.   Mr. Jones said that he had been told that GTRM (the railway maintenance sub-contractors) no longer required the shed, and that if they did not need it, Railtrack certainly did not, but admitted that he could produce no evidence to support those contentions.
18.	Mr. Jones said he also had no evidence to support his contention that an occupier would be able to erect an advertising hoarding adjacent to the bridge, but had not attributed any value thereto.
19.	In respect of the advice his company had received from Healey & Baker in its letter to Mr. Whiting of 3 June 1999, Mr. Jones accepted that as at the date of the hearing, interest rates had risen to 5.75% from the 5% level quoted therein but the effect on yields, he said, was not directly correlated.   It could not be assumed therefore that if the yield used in his valuation was 8.25%, it should now be 9 per cent, even though the recommendation in the Healey & Baker letter was that 9 per cent was an appropriate yield based upon a rental figure of £5 per sq.ft. at June 1999.   However, he did accept that despite Healey & Baker’s view that a ten-year lease would be achievable, it was more likely that a maximum five year initial term would be the best available in the market.
20.	I asked Mr. Jones a question regarding access for the pair of semi-detached cottages (Willow Cottage and Wallington) lying immediately to the west of the entrance road, and the fact that the photographs produced in evidence showed there to be cars parked on the road, in front of the properties.   Mr. Jones said that there were no vehicular rights of access to those properties within the title to the subject property, and the cars should not have been parked there.   He said that under the terms of the British Transport Commission Act 1949 prescriptive rights could not be obtained.
Respondent’s Case.
21.	Mr. Inscoe is sole principal of Inscoe’s Chartered Surveyors in Wolverhampton and is experienced in the valuation of a broad range of commercial property particularly in ‘the M.5 corridor’ between Dudley, West Midlands and Gloucester.
22.	His evidence, based on the assumptions that the subject property could be re-developed (under sched.3 of the 1990 Act) on the basis of ‘store, quasi-retail and toilets’, that the demarcation agreement could be varied by negotiation, and that the access to the allotments would remain in the same position, would have a negative value.   Firstly, it was his opinion that the completed development would have a rental value of £4.50 per sq.ft., to which a yield of 8.5 per cent should be applied after allowing for a three month void period for fitting out, or as a rent free inducement.   This gave a capital value of £66,750 which equated to £51.90 per sq.ft.   
23.	Dealing then with building costs (he had also based his calculations on a building for mixed commercial use), he said that he had taken £35 per sq.ft.   This was based upon records of similar developments held in his office (negotiated contracts as opposed to tenders) and  which, if the costs of services, landscaping, provision of parking, fees, contingencies and developers profit were added brought the total cost to £50.18 per sq.ft. (net of VAT).     As a cross check, he had taken the BCIS building cost analysis for residential bungalows (where the basic construction would be similar), which for the appropriate period amounted to circa £49.95 per sq.ft.    After deducting sums for plastering out (8%), standard of fitting out, fitted kitchen, bathroom, driveway and other sums which were not applicable, this brought the figure back to £35 per sq.ft.
24.	 Mr. Inscoe said he was currently supervising a scheme in Wolverhampton that was costing £65 per sq.ft., and a new doctor’s consulting room for an NHS Trust where the cost was £74.    In his view the costs of building shell and core units at Vale Park Evesham would be in the region of £40 per sq.ft., but that would be a contract awarded under competitive tender and where there would be economies of scale.  A negotiated price would, he said, be higher.   The costs of the Haddonsacre scheme, he thought, would be in the region of £65 per sq.ft.
25.	In his assessment of the building costs, Mr. Inscoe said he had allowed £4,500 for landscaping and car parking, and did not accept the suggestion by the claimant’s expert that such expenditure would not be necessary.   He had also allowed £1,500 for installation of services which had also not been taken into account (as a separate item) by the claimant.   If an allowance for developers profit (at £5,254) were included, the total cost of development would amount to £64,696 therefore leaving a balance of only £2,224.    Mr. Inscoe said that this figure did not include VAT, and in his opinion the type of operator who would be undertaking this task would not be registered and would therefore be unable to reclaim any of the VAT.   At 17.5 per cent this would add over £10,000 to the cost of development, thus leaving a negative value in the region of  £8,000.
26.	In respect of the yield he had adopted, he agreed with the claimant’s expert that there was not necessarily a direct correlation between yields and interest rates, partly because as base rates rose, investors could become attracted by other forms of investment, such as gilts.   He said his yield was based upon his estimate of the true rental value of £4.50, but if the Healey & Baker rent of £5 per sq.ft. were being paid, he would agree with their yield of 9 per cent to take account of the additional risk.   On being questioned, he confirmed the in his view the appropriate yield remained at 8.5 per cent, on the basis of a rental value of £4.50 per sq.ft., despite the movement in base rates, his valuation having only been completed at the beginning of January.   
27.	In response to a question from me, Mr. Inscoe said that he thought, based upon the re-development assumed in this exercise, the site would most likely be purchased by an investor who would develop the land and let the buildings to a local occupier – in which case developers profit would have to be taken into account.   The appropriate use was for such quasi-agricultural purposes as sales/service of mowing machines, hedge-trimmers and the like.   He did not disagree that a farm shop or other similar retail outlet would be a possibility, but made the point that the market for such would be relatively limited, and a disadvantage was the fact that the site is split-level, low lying and has no visible impact from the road.
28.	As to his comparables, Mr. Inscoe firstly referred to Unit 9, Lyttleton Road, Keytec 7 Industrial Estate, Pershore.    This was a small light industrial/warehouse building with office and workshop accommodation on two floors and extending to a gross internal area of 2,500 sq.ft.   One of a group of twelve similar units, six on each side of a central concreted access off the main feeder road to older part of the estate, it has parking immediately in front of the unit for four cars.   It had been recently let for a term of three years certain at £3 per sq.ft.   In his opinion, the subject property, if re-developed in accordance with his assumptions, would attract a premium over Keytec 7. 
29.	The second comparable (and the only retail unit to be produced by either expert) was 86 High Street, Evesham.   Described as a ‘retail warehouse’ in the agent’s particulars the property has a shared entrance hall of 369 sq.ft. and a divided retail area of 1,010 sq.ft. – giving a total area of 1,379 sq.ft.   He said it had recently been let, on an all-inclusive basis, outside the provisions of the  Landlord and Tenant Act 1954, for a term of twelve months at 3.77 per sq.ft.    This equated to £5.14 per sq.ft., based upon the net useable area.    He said that the permitted use was A.1 retail with ancillary storage.   
30.	Mr. Inscoe’s final comparable related to a bare former railway station site at Defford (off the A.4104 about two miles south-west of Pershore, and extending to 5,600 sq.m. (60,279 sq.ft.).   It is located adjacent to the railway-bridge, over which the road passes, and is approached over a narrow track running parallel to the road.    He said that Railtrack had been seeking offers in the region of £1 per sq. m. plus VAT, (£0.92 per sq.ft.) for open storage for several years but it was still available.   In cross-examination, he agreed that any such letting would be subject to planning permission being obtained and the licensee would be responsible for £250 towards Railtrack’s costs.    This comparable, he said, indicated a value for the subject property on the same basis i.e. if development were not viable, in the region of £800 pa., (on a useable area of 0.2 acre).
31.	In cross-examination, defending his assessment of landscaping and car parking costs, Mr. Inscoe said that any form of commercial development would need to provide a proper access and adequate on site parking, even if a formal landscaping programme, like the one at Haddonsacre, was not required.    In his view, planning permission would need to be obtained, in the real world, (rather than the ‘fictional exercise under Sched.3) and a landscaping scheme would undoubtedly be a condition, so a purchaser would take this into account in assessing the value.   His figure of £4,500 was based upon the actual cost of a similar scheme with which he was involved in Wolverhampton – in that case change of use from residential to offices, where car parking requirements had to be provided.   
32.	In summary, Mr. Inscoe said that the only circumstances in which the subject property could have a positive value, was if it were acquired by a potential owner occupier who was registered for VAT.   In such a scenario the property would have a value of no more than £2,500, and that is the figure he considers should be the compensation.
33.	In closing submissions, Mr. Park said in respect of the question of rights of access for the adjacent cottages, there were authorities to the effect that prescriptive rights had been recognised over railway land (although he did not guide me to them).    As to the claimants’ reference to the British Transport Commission Act 1949, the Council said (in response to the claimants’ closing submissions) that the Act was not listed in Halsbury’s Statutes, and suspected therefore that it was no longer in force.    
34.	He said that he was concerned that Mr. Jones had admitted he was personally and professionally interested in the outcome of the proceedings, and thought this was a potential conflict of interest.   This was especially so as he had appeared to rely, in his evidence, on oral information from third parties in respect of the comparables and the build costs, and may be tempted to misconstrue what he has heard, even if not deliberately seeking to do so.
35.	As to the planning position, Mr. Park submitted that it is inherent in the claim that the assumption is the former station buildings can be replaced by a structure that can be used for office, retail or industrial purposes (or a combination of such), and that Mr. Jones had perceived there would be no planning restrictions which would impact upon the build costs.    He referred to Sorrell v Maidstone Rural District Council (1961) 13 P&CR 57 LT, where it was held that there is no compulsion to create a slavish copy of the dimension, appearance and materials of what had been on the site previously, but there is, however, a restriction as to siting.  That case also dealt at length with the subject of user, and the Member (R.C.G. Fennell FRICS) had said at p.65:
“ With respect, I do not agree with Mr. Bridge [of counsel, for the acquiring authority] that I have to consider the purpose for which the buildings were originally designed.   I must look to the permitted use of the buildings on the appointed day and their cubic capacities, subject to tolerated enlargements”.
36.	The permitted use of the subject property on the appointed day was ‘a railway station’.  It was not offices, industrial or retail but a composite use on its own, sui generis.   Whilst the Town and Country Planning (Use Classes Order) 1987, as amended, permits a change of use within the same use class without planning permission (such change deemed not to be development), the Courts have held that the Use Classes Order does not include all uses, and many will fall outside its ambit.    Mr. Park said the case of London Residuary Body v Secretary of State for the Environment [1989] 3 PLR 105, is an appropriate authority as in that case the Court of Appeal held that County Hall in London was not an office use, but was a Local Government use sui generis.   Thus, in that case, use for offices, if permitted, would constitute development.  
37.	Mr. Park said it follows that planning permission for the use required to support the claimants valuation would be required, and that there is a high degree of probability that in the event of permission being granted, conditions would be imposed of the sort that Mr. Inscoe had taken account of in his costings. 
38.	As to the build costs, Mr. Park said that Mr. Jones had produced no evidence in support of the figures he had used, had ignored the potential for contamination of the site bearing in mind its former use, and had not taken into account other site costs and possible difficulties in respect of the provision and connection of services.   He invited me to find that Mr. Inscoe’s analysis was more likely to be accurate.
39.	The claimant’s contention that Railtrack’s reserved right of way, under the demarcation agreement, was of insufficient width to allow access for their vehicles was, Mr. Park submitted inappropriate and there was no evidence from Railtrack on the subject.   The authority on this matter was White v Richards [1993] 68 P&CR 105 where it was held that one should consider the conveyance and ‘the surrounding circumstances’ to determine the width of a right of way.   It was not right for Mr. Jones to conclude, from his measurement of the brown colouring on the very small-scale plan attached to the demarcation agreement that the right of way was only 2m wide.   Having regard to the nature of the business of the original parties to the demarcation agreement, the granted right to use the route by vehicles, the nature of the vehicles normally employed by Railtrack, the small scale plan, the absence of any limitation on the right of way or reference to its width and the fact that the gate at the western end of the site is 4 metres wide it is, Mr. Park said, inappropriate for the claimant to conclude that he is entitled to any negotiating benefit from that right of way.  [My site inspection revealed the field gate to have a 10 ft. (3.04 metre) opening].
40.	In terms of yield and rental values, Mr. Park submitted that Mr. Inscoe’s valuation sits more easily with the market position, whereas Mr. Jones’s valuation, showing an 8.25 per cent yield was not even in line with the advice he had received from Healey & Baker (9 per cent).   He said Mr. Jones had not allowed anything like enough in his projected infrastructure costs.   In his submission, he invited the Tribunal to find in favour of the Council at a figure of between £2,500 and £3,500.
41.	In his closing submissions for the claimants, Mr. Hill said that the valuation is complicated in this case by the applicability of the assumption contained within Section 15(3) of the Land Compensation Act 1961, and its reference to Scheds. 3 & 10 to the Town and Country Planning Act 1990.      The effects of this were to cause a “statutory fiction” requiring that the land be valued so as to assume the existence of a planning permission which has not, in fact, been granted, allowing the rebuilding of 1,286 sq.ft. of former floor space.    Mr. Hill said that the section in Sorrell referred to by counsel for the Council indicates there should be a flexible and reasonable approach to the application of the assumption – this being particularly appropriate where, as in this case, a comprehensive record of the former buildings is not available.
42.	Mr. Hill said that the use to which the buildings may be put should reflect their previous use, which had been assumed to be retail (the sale of tickets), storage, office and ancillary uses.    Indeed, he said, Mr. Inscoe had had no difficulty with this approach and his report gave no inkling of any fundamental disagreement with the claimant over use assumptions.   As to counsel for the Council’s assertion that the use was sui generis, he said that was not supported by evidence from the local planning authority as to the way in which it would view the use of the site; neither has any legal authority or planning precedent been produced to support that assertion.
43.	The dispute between the parties in respect of this aspect is, Mr. Hill said, of little relevance because the Council’s expert was content to assume that consent for the change of use would be forthcoming and had based his valuation on that assumption.   The only consequence, for valuation purposes, was in respect of the costs of complying with planning conditions e.g., landscaping.   Mr. Hill said that both the experts generally agreed as to the type of user for which the property was suited, and to whom it would appeal.  Being a potential owner-occupier, the suggestion that there should be a void, or rent-free period was not applicable, and developers profit was also not relevant.   
44.	As to the access for the cottages, he referred to Section 57 of the British Transport Commission Act 1949 which stated:
“ As from the passing of this Act no right of way as against the Commission shall be acquired by prescription or user over any road footpath thoroughfare or place now or hereafter the property of the Commission and forming an access or approach to any station goods yard wharf garage or depot or any dock or harbour premises of the Commission”.
and therefore no rights could be secured for those owners.
45.	In respect of build costs, Mr. Hill said that Mr. Inscoe’s figures were shrouded in obscurity and appeared to be out of date.   The cross-check against bungalow costs was, he said, unconvincing and inappropriate.    The claimants’ figures were up to date, and had been provided by a quantity surveyor.     Mr. Inscoe’s costs for car parking and landscaping were irrelevant to the valuation exercise, or even if they are to be included, were overstated.
46.	Finally, in respect of the Railtrack access track, Mr. Hill said it was expressly identified on the plan, at a width of 2.0m and was thus too narrow for the company’s vehicles to pass over it without oversailing the claimants’ land.   Thus the claimants have something valuable to offer Railtrack.   

Decision.
47.	The key factor for my determination, before I can deal with the valuation issue, is the assumptions to be made as to what could be built, and the use to which it could be put, in the ‘fictional’ world under Sched.3 to the Town and Country Planning Act 1990.    The Council’s argument that the use is sui generis is compelling, and reference to London Residuary Body serves to draw a good parallel to the instant case.   However, as Mr. Hill has said, the Council has adduced no evidence to suggest that planning permission for the use upon which both experts had based their valuations would not be forthcoming.   The Council relies upon its expert’s report and evidence, and that assumes planning permission for quasi-retail, office, storage and ancillary uses (such as toilets) would be granted.   Indeed, in inviting me to find for the Council at a figure of £2,500 to £3,500, Mr. Park is basing that figure on the Council’s expert’s valuation which, as I have said, uses, to all intents and purposes, the same assumptions as those adopted by the claimants’ expert.    I conclude, therefore, that whether or not the use is sui generis the assumptions relied upon by the experts are appropriate. 
48.	I do think that there would be a market for a small farm shop or a quasi-agricultural user such as farm or horticultural machinery sales and repairs as suggested by both experts.   A more intensive retail operation along the lines of a retail warehouse, promoted by Mr. Jones as another of his potential uses, would not only be inappropriate for the area, but the constraints of the site, and its village location would also make it unattractive for that purpose.   The prospect of being able to erect a sign on the roadside, directing people to the property, is in my view, reasonable.  
49.	I do not accept Mr. Jones’ submission that there is any potential value attributable to negotiating a wider access for Railtrack.   The decision is clear in White and in any event, the gate into the Railtrack land on the western boundary is ten feet (three metres) wide.  There is no reference in the demarcation document to the width of the track, and it is in my view unrealistic to assume from the coloured line on a small scale plan that that is the actual width.  I conclude that the width of the gate is the only restriction on the size of vehicles Railtrack can use.    Even if I had decided there was some negotiating value, that would be balanced out, or negated, by the claimant’s need to request permission to move (or remove) the shed, and also to negotiate the moving of the track across to the railway boundary, to facilitate building and provision of parking.
50.	As for the shed, this is currently located in a most inconvenient part of the site (in terms of siting for any development) and, as I have said, it would need to be moved.   Mr. Jones was unable to produce any evidence to substantiate his comments that the building was no longer required, but I suspect that negotiations for its removal would probably be successful. 
51.	My inspection of the subject property, on 9 February, confirmed the Council’s submissions that access when entering from the from the railway bridge direction is difficult, indeed dangerous.   There is a risk that a vehicle waiting to turn right into the station access may be hit from behind by a vehicle coming over the hump of the bridge.   Access from the village direction is very much easier, but I accept that once the site is reached, there is insufficient room for large heavy goods vehicles to turn around.   Also, with the bank supporting the entrance to the track to the allotments on one side, and the bank supporting the road to the railway-bridge on the other, there is insufficient space for anything other than two cars to pass in opposite directions.
52.	As to the cottages that physically front the access road, the first (Wallington) has a driveway and a garage.   The second, Willow Cottage, has only a pedestrian gate although I have no doubt that the purchaser (it had an estate agents ‘sold’ sign on it) will be wanting to create vehicular access thereto.   This is not physically difficult as there is, passing immediately in front of the boundary hedge, the access to the allotments over which there are full rights reserved.    As to whether or not a vehicular right of way for the first cottage actually exists, or could be acquired – and according to counsel for the claimants it does not - is fortunately not a matter upon which I am required to decide, but I am tempted to prefer the Council’s suggestion that the British Transport Commission Act 1949, to which the claimants refer, is no longer applicable.    In any event, the fact is that Willow Cottage will need a vehicular access, and if it cannot be claimed by prescription, then perhaps that is where there may be some negotiating value, rather than with Railtrack.   However, the question of access to the cottages has, in my judgment, no material impact on value.     
53.	There was much discussion at the hearing regarding allowances for the cost of landscaping, and suggestions that ground-works may be more difficult than on a conventional site, due to its former use.   Mr. Jones had not allowed anything for landscaping, and said in evidence that he did not think much would need to be done.   In any event, he said that in this fictional valuation exercise, even if planning policies required landscaping those costs should be ignored.    Mr. Inscoe had allowed £4,500 for landscaping/car parking.   I prefer Mr. Inscoe’s evidence having seen the site for myself, and also his comments regarding ‘the real world’ where he said, whether or not landscaping and the provision of car parking requirements are to be taken into account for this exercise (as against conditions which would undoubtedly be applied to a planning permission), a prospective occupier would allow costings for this, and such would affect his valuation.   
54.	This is only marginally a fictional exercise.  In accepting that planning permission would be granted for the uses stated, then it is only right to assume that planning conditions would be imposed, and a purchaser would build in allowance for such costs in his valuation.    Also if, for instance, a farm shop was to be built, not only would customer and staff car parking have to be provided, but fencing would need improvement for safety reasons (per Mr. Inscoe).   Furthermore I am certain that to achieve effective siting of the unit (whatever its user) some fairly extensive digging out of the bank leading up to the track serving the allotments would be needed.  Strengthening would then be required to prevent the track from subsiding.  There is also the need for clearance of some small trees and overgrown areas.    Thus I conclude that not insubstantial sums would be required for site-works, and in my judgment even the £4,500 allowed by Mr. Inscoe would be barely sufficient.    
55.	I inspected the comparables on 9 February 2000.   There is no doubt in my mind that none of the properties to which I was referred by the experts were strictly comparable to the subject property.   The former Fladbury railway station is a bare site (apart from the Railtrack shed) whereas four of the comparables were existing light industrial or warehouse units, only one was retail (and that was in a high street position in a busy town) and the remaining site at Defford was not in a built up location.   I accept that the existing buildings give a broad indication of rental values and yields, but they were all in very different locations. 
56.	Firstly, the Defford site.   This is located well away from the village in a rural position with a narrow access off a fast stretch of road (which is dualled over the adjacent railway-bridge).   It includes a fenced compound which contains a few old tyres and nothing else.   The rest of the site is barren apart from a burnt out car and some lorry loads of rubbish that have been tipped.   It is evident that Railtrack have had no success in attracting an occupier, even at less than £1 per sq.ft. and this is not surprising due to its remote and insecure location.    A further detracting factor is that any prospective occupier will have to apply for and obtain planning permission.   In my view this site is in no way comparable to the subject property which, by contrast, is located within a popular and attractive village, only three miles from Evesham.
57.	Mr. Jones’ references to Vale Park at Evesham, the Bond Industrial Estate at Wickamford and Haddonsacre at Offenham are of some assistance in establishing a general feel for rental values and yields, but as I have said, none of them are strictly comparable.   Vale Park is a large, modern business and industrial park with excellent access and visibility from the main A.46 Evesham ring road.   There are office, light industrial and warehouse uses and this is a true commercial business park environment.    Bond Industrial Estate is a small edge-of-village estate with 24 starter type light industrial units.   Access is, as was pointed out by Mr. Inscoe, extremely narrow and visibility from the main A.44 Evesham-Oxford road is poor.   The development is poorly signed, and it would appear from the number of units currently available for sale or to let that occupier turnover is high.   Mr. Jones mentioned that unit 23 had been let in November 1999 for six months certain, but as at the date of my inspection it was empty and a ‘for sale’ sign was erected thereon.   Neither of these two comparable sites would be likely, in my opinion, to attract the same type of occupier to one who would consider the subject property.
58.	Haddonsacre is indeed, as Mr. Jones said, extremely difficult to find.    However, its position in relation to the village bears similarities to the subject property, although it has a frontage to a quiet country lane with little passing traffic.   The use of the former commercial workshop buildings is now offices and the developer has taken care to create an attractively landscaped environment.  The rental figures mentioned appear to bear out the type of user and the somewhat remote location.
59.	Mr. Inscoe’s comparable at Keytec 7 at Pershore is again a light industrial/warehouse unit on a large and conveniently located business park.  Again, I consider the likely occupier to be different from one who would be interested in the subject property.    Finally, 86 High Street Evesham is in such a vastly different position and trading environment to the subject property that I do not consider it to be particularly helpful.
60.	Taking into account the tone of rental levels and yields referred to and applying them to the subject property, and what might be built thereon, I prefer Mr. Inscoe’s figures and apply those in my valuation (at Appendix 1).    I also prefer Mr. Inscoe’s estimate of building costs, the cross checks he has applied, and the fact that his figures give a capital value closer to those achieved with his comparables.   The lack of economies of scale, and the fact that it would be likely to be a negotiated contract also support a higher figure than that applied by the claimants. 
61.	As I have said, in addition to the building costs for the actual structure, there will be site-works costs of at least £4,500 and I also accept Mr. Inscoe’s allowance of £1,500 for the connection of services.  My valuation assumes that the purchaser would be a VAT registered owner-occupier purchaser, rather than a speculative developer or investor.    Mr. Inscoe’s figure relating to the cost of finance appears to have been incorrectly calculated, although I accept his 7.5 per cent as being more appropriate than the claimants’ 7 per cent.    
62.	My valuation amounts to £7,500, and I determine that the Council shall pay compensation to the claimants in that sum.   In respect of my valuation, as with those provided by the parties, I acknowledge that the use of residual valuations is generally to be avoided as the sole method of determining a value.   This is due to the opportunities that arise for substantial variations to the figure caused by minor adjustments to multipliers, e.g., YP.   However, the evidence is such that I am constrained to using that approach.
63.	I have found nothing to suggest that Mr. Jones’ evidence was affected by any actual or perceived conflict of interest.
64.	This decision determines the substantive issue before me.  In view of the provisions of Rule 28(11) of the Lands Tribunal Rules 1996, I make no award as to costs.   Rights of appeal under section 3(4) of the Lands Tribunal Act 1949 and Order 61 rule 1(1) of the Civil Procedure rules will come into effect from the date of this decision.

			DATED 25 February 2000

			Signed (P.R.Francis FRICS)               

APPENDIX 1

VALUATION

								£			£
Rental Value 1,286 sq.ft. @ £4.50 = £5,787         say		5,800			
Y.P. in perpetuity @ 8.5%					      11.76 
											68,208

Less development costs
Building costs 1,286 sq.ft.@ £35				45,010
Services							  1,500
Landscaping/car-parking/groundworks			  4,500
Contingency @ 3%						  1,530
Finance 0.75year @ 7.5% p.a. 				  2,957
Professional fees (on £52,540) @ 10%			  5,254 
											60,751
Residual value										  7,457

										     Say £7,500