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You are here: BAILII >> Databases >> England and Wales Lands Tribunal >> Prosser & Anor v Inland Revenue [2000] EWLands DET_1_2000 (26 June 2000) URL: http://www.bailii.org/ew/cases/EWLands/2000/DET_1_2000.html Cite as: [2000] EWLands DET_1_2000

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[2000] EWLands DET_1_2000 (26 June 2000)

DET/1/2000

LANDS TRIBUNAL ACT 1949

INHERITANCE TAX - s.222(4) of Inheritance Tax Act 1984 - appeal without a hearing under rule 27 Lands Tribunal Rules 1996 - valuation of house in large garden - prospect of development of part of garden with additional dwellinghouse - held 50 per cent chance of planning permission - freehold value determined at £85,000.

IN THE MATTER of an APPEAL against a NOTICE OF DETERMINATION

BETWEEN MR R B and MRS J A PROSSER Appellants

(AS EXECUTORS FOR MRS EDITH ELIZA JEMPSON, DECEASED)

and

COMMISSIONERS OF INLAND REVENUE Respondents

Re: Clietus Cottage, Mount Hermon Road

Palestine, Grateley, Andover, Hants

Before : N J Rose FRICS

Proceedings determined without a hearing

under the provisions of Rule 27 of the Lands Tribunal Rules 1996

The following case is referred to in the decision:

Duke of Buccleuch v CIR (1967) 1 AC 506


 


DECISION OF THE LANDS TRIBUNAL

1. This is an appeal by Mr R B and Mrs J A Prosser ("the appellants") under s.222(4) of the Inheritance Tax Act 1984 against the decision of the Commissioners of Inland Revenue ("the respondents"). It relates to a deemed disposal for the purposes of inheritance tax on the death on 23 February 1995 ("the valuation date") of Mrs Edith Eliza Jempson ("Mrs Jempson"). The Commissioners determined that the open market value of Mrs Jempson's freehold interest in Clietus Cottage, Mount Hermon Road, Palestine, Grateley, Andover, Hants ("the appeal property") for the purposes of that tax on that transfer was £115,000. The parties have agreed that rule 27 of the Lands Tribunal Rules 1996 shall apply and the Tribunal has so ordered. Written representations and counter-representations have been received from the parties and further documentation has been provided at my request. In their submissions the respondents supported their original determination and the appellants contended that the true market value was £65,000. I inspected the exterior of the appeal property on 22 June 2000 accompanied by representatives of both parties. I inspected the surrounding area on the same day.

Facts

2. From the evidence I find the following facts. The appeal property is situated in the settlement of Palestine, which lies approximately 6 miles south-west of Andover. Palestine was largely developed between the wars and is served by narrow roads in a rectilinear pattern. The settlement has been the subject of much infill development and replacement of original dwellings with new houses. It is situated close to the main line railway station of Grateley, which has direct links to London Waterloo.
3. The appeal property is on a corner site, with frontages to the south side of Streetway Road and the east side of Mount Hermon Road. It contains Clietus Cottage, one of the earliest dwellings constructed in the locality. This comprises a detached, two-storey cottage built in 1904 and fronting Mount Hermon Road. It has brick elevations under a recently re-covered pitched, tiled roof and a more recent timber lean-to store to the rear under a pitched, felted roof.
4. The cottage was originally situated on a plot of approximately 1.25 acres. However, following the grant of planning permission in 1986 for Ashby Down (a detached house fronting Streetway Road and to the east of Clietus Cottage) and in 1988 for two further houses (at the southern end of the site and fronting Mount Hermon Road) the plot was reduced to its current size of approximately 0.41 acre. The cottage has a gross external area of approximately 83 square metres. The ground floor accommodation comprises hall, living room, kitchen/dining room, bathroom/WC, rear porch and outside store. There are two bedrooms on the first floor. There is no garage, but at the valuation date the grounds comprised gardens to the front (west), rear and sides of the cottage. It has no garage, but is served by electric night storage heaters.

Issues

5. In my opinion, the issues that arise in this reference are as follows:

(1) The value of the existing cottage and the northern part of its garden.

(2) The value of the remainder of the garden; in particular, whether any hope value attached to it and, if so, how much?

Case for the respondents

6. A written submission and counter-submission on behalf of the respondents were made by Mrs Anne L Pissaridou of the Capital Taxes Office, together with a written proof of evidence and counter-submission by Mr A J V Feltham, BSc, ARICS. Mr Feltham is a senior valuer in the Southampton office within the Wessex group of the Valuation Office Agency, which covers the counties of Hampshire and Wiltshire. He has had some 10 years experience, all with the Valuation Office. Since joining the Southampton Office in 1995 he has specialised in valuations for inheritance tax, capital gains tax and schedule E purposes and he has also provided advice to other government departments in respect of all types of property.
7. In arriving at his valuation Mr Feltham had regard to the principles of prudent lotting referred to by Lord Reid in Duke of Buccleuch v CIR (1967) 1 AC 506. He concluded that the appeal property would have been best marketed in two lots. These comprised, firstly, the northern part consisting of Clietus Cottage itself and a reduced garden area, totalling in all approximately 0.24 acres and, secondly, a potential building plot of approximately 0.17 acres. Both lots have frontages to Mount Hermon Road. The latter adjoins and lies immediately north of the two houses referred to previously, for which planning permission was granted in 1988 and each of which stands on a plot of 0.17 acres.
8. Mr Feltham considered that the value of Clietus Cottage and its reduced garden was in the region of £72,500. This valuation was based on the prices achieved in 1994 for two other cottages, one in Kimpton (approximately 4.5 miles north of Palestine) and the other in Little London (approximately 3 miles north-east of Andover). It assumed that the remainder of the appeal property had been sold separately and reflected, as far as the market would, any depreciation in value likely to result from the construction of a new dwelling upon it. It also reflected the need for partial updating of the cottage, its enlargement potential and the rural views that it enjoyed to the west.
9. He approached the valuation of the potential building plot by considering, firstly, its value assuming planning consent were granted for the erection upon it of one detached house. On this basis, he considered that the plot would have been worth £55,000. In arriving at this figure, he had had regard in particular to six sales of plots in Palestine and neighbouring villages. He then considered the allowance, if any, which should be made to reflect the fact that no planning permission existed at the relevant date. He expressed the view that a negotiation between vendor and purchaser would have resulted in some allowance for risk but,

" with all indications in favour of consent being granted, this deduction, whilst fair to both parties, would be modest."

Against this background, he concluded that it was appropriate to deduct 20% for risk, producing a "potential plot" value of £44,000. This figure, he thought, gave

"all possible benefit of the doubt to the parties."

10. In support of his opinion as to the prospects of obtaining planning permission, Mr Feltham referred to the provisions of the Local Plan of Test Valley Borough Council (North); a letter from the local planning authority dated 12 April 1996 suggesting that an application for an additional dwelling

"might well have received the benefit of favourable consideration"

at the valuation date and the fact that such planning permission was in fact granted in February 1998. The two elements of Mr Feltham's valuation totalled £116,500, which he rounded down to £115,000.

Case for the appellant

11. The appellants' valuation of the appeal property was £65,000. This figure had originally been put forward by their then solicitors, Messrs Talbot Walker of Andover. It was supported by a written valuation in that amount dated 9 March 1995 and prepared by May and Son, auctioneers and estate agents of Andover. That report did not refer to any comparable transactions, nor did it explain how the figure of £65,000 had been calculated. It did, however, include the following observation:

"There is a space of 74' fronting Mount Hermon Road from the corner of the house to the building plot we sold in 1989. I think that there is a potential for another 60' plot."

It is not clear from the report whether this potential was reflected in the valuation of £65,000.

12. It would appear that the appellants did not see May and Son's report until April 1996, when they were handed a copy by Mr Feltham in the course of a meeting. In July 1998 the appellants obtained a second valuation from Mr D G H Smith BSc (Est Man) ARICS of Messrs Dreweatt Neate, surveyors and valuers of Andover. Mr Smith's valuation was £85,000. This was not intended to be an expert witness's report. Consequently, as with the May and Son report, it did not refer to any comparable transactions or break down the valuation figure between the cottage and the garden. Mr Smith did, however, deal with the planning position in a little detail. He said:

"In view of the planning policy prevailing in February 1995 it is likely that a planning officer would have considered there to be further development potential within the curtilage of Clietus Cottage... In our opinion development of that property could have involved demolition of Clietus Cottage and replacement with a new dwelling, extensions, alterations and improvements to the existing accommodation or possibly another building plot although constraints would appear to have been the number of trees on site, vehicular access and the adverse effect another new dwelling would have on all adjoining properties. (Photographs 3, 4 and 5 clearly demonstrate the mature trees within the curtilage of the property ...).

We are aware that there are further proposals for development within the Palestine area but for the purposes of this valuation we have assumed they would have no adverse effect on the value of the property."

13. Under "General Remarks" Mr Smith said:

"Our valuation of the property ... reflects the condition of the property as it is understood to have been in 1995 and also the development potential of the whole of the property as shown edged red on the plan."

14. Although the appellants produced a copy of Mr Smith's report as part of their written submission, they did not entirely agree with it. In particular, they pointed out that in 1991 a company called Bellway Homes had submitted proposals for a substantial development at Palestine, including 2,000 homes. Although these proposals had not been approved, they had been deferred for 10 years and, they said, this would have had an adverse effect on the value and amenities of the appeal property.
15. The appellants also considered that there was no justification for ascribing any hope value to the appeal property at the valuation date. They described the prospect of building another property within the garden at that date as "chimerical". In support of this view, they referred to four decisions of Test Valley Borough Council, all refusing consent for the erection of dwellinghouses in Palestine. These decisions may be summarised briefly as follows:

Address	Proposed Development	Date of refusal
Adj. Roseander, Mount Hermon Road Adj. Lyndale, Mount Hermon Road Sunnydale, Mount Carmel Road Adj. Cavilla, Mount Hermon Road	Dwelling & Garage Two Bungalows Three Bedroom House Three Detached Dwellings	8 April 1981 9 March 1990 29 April 1994 18 April 1997

16. The appellants did not consider that the letter to the District Valuer from the local planning authority dated 12 April 1996, about the prospects of planning permission being granted, was relevant. In their opinion, a prospective purchaser of the appeal property would not have been able to obtain such information. As for the planning permission that was granted in respect of the appeal property in 1998, they made the following comments. They had never had an intention to apply for such permission and only did so after being pressed to do so by Mr Feltham. The position was not clear cut, since consent was only granted after four meetings of the relevant committees. The planning department was aware of the involvement of the Inland Revenue and

"did not want to provoke the Capital Taxes Office".

The presentation of the application to the Planning and Transportation Committee was inadequate, including an inaccurate site plan; only one poorly reproduced photograph of the site and a limited site inspection by the arboricultural officer at the suggestion of the planning officer. Finally, the appellants suggested that the grant of planning permission for part of the appeal property had created the precedent of the smallest building plot in Palestine.

Decision

17. I deal firstly with the value of Clietus Cottage and its reduced garden. Mr Feltham's valuation was £72,500 and was supported by comparable evidence. Although the appellants suggested a lower value, they did not produce any details of other sales to support their proposed figure. Moreover, their comments on Mr Feltham's initial submissions did not refer to the cottage but were limited to the development potential and value of the suggested additional building plot. Although the May and Son valuation suggested that the value of the cottage was less than £72,500, it was not supported by any comparable evidence. In the circumstances I accept Mr Feltham's figure of £72,500.
18. I now turn to the value of the garden area, forming the southern section of the appeal property, assuming it had the benefit of planning permission for one house. Mr Feltham's area of 0.17 acre for this land assumed a frontage to Mount Hermon Road of 60 feet - identical to the two plots immediately to the south. The appellants suggested that the frontage would be only 50 feet. In the light of my site inspection I am satisfied that there was potential for the larger plot suggested by Mr Feltham, without causing detriment to Clietus Cottage, its garden and driveway. Mr Feltham considered that this site would have been worth £55,000 at the valuation date, based on various transactions effected between March 1989 and July 1995. The appellants pointed out that one of the two plots immediately to the south of the appeal property, which had originally formed part of its curtilage and for which planning permission had been granted in 1998, was re-sold in July 1993 for £43,500. It has subsequently been developed with a detached house called "Lothlorien." Although Mr Feltham's schedule of comparables included the original sale of this plot in 1989, he had not been aware of the details of the re-sale, since the Valuation Office Agency apparently did not hold a Stamps L(A) form for the transaction. He was, however, content for this sale to be considered as a comparable. In his opinion, values had increased by approximately 15% between 1993 and the valuation date. This transaction therefore suggested, he said, a value of around £52,000 at the latter date. He added:

"I am not aware of the circumstances of the sale but I note that the vendor must have made a substantial loss in comparison with the purchase price and, in view of the facts not being widely known, I wonder whether there was a degree of 'forced sale' about it."

19. The reference to a substantial loss arose from the fact that the plot had previously been sold for the equivalent of £90,750 in March 1989. The reference to the facts not being widely known relates, I assume, to the fact that details of the sale did not appear in the Valuation Office records. I do not consider that either of these considerations necessarily indicates that there was a forced sale in July 1993. Mr Feltham thought that the value of the "Lothlorien" plot was identical to that of the potential plot at the appeal property, assuming it had planning permission. The original purchaser who had paid £90,750 would therefore have suffered a substantial loss, whether he sold at Mr Feltham's open market value of £55,000 or at £43,500. That loss resulted inevitably from the fact that, as Mr Feltham pointed out, the original purchase had taken place "at the top of the market". The fact that the subsequent sale resulted in a substantial loss, therefore, does not of itself indicate that it was a forced sale. Similarly, the fact that Mr Feltham was not aware of the 1993 sale does not, of itself, indicate that it was a forced sale either. If Mr Feltham had wished to establish whether the price of £43,500 had been realised other than on an open market basis, it would have been open to him to investigate it further, once the appellants had drawn the transaction to his attention. He did not do so. In the absence of any further information on the matter, I consider that the sale of the adjoining property 19 months before the valuation date provides the best available guide to the value of the potential plot, with the benefit of planning permission. Mr Feltham suggested that values increased by 15% between the two dates and this opinion was not contested by the appellants. If the 1993 sale price is increased by 15%, it produces a value of £50,025, say £50,000, not £52,000 as suggested by Mr Feltham. In the light of this evidence, I conclude that the value of the potential plot with planning consent would have been £50,000.
20. I should refer at this stage to the appellants' suggestion that the deferral for 10 years of the large scale development project in Palestine proposed by Bellway Homes would have had an adverse effect on the value of the appeal property. The Bellway Homes proposals were put forward for consideration by Hampshire County Council in its formulation of the County Structure Plan. The Inspector's report on the examination in public of that Plan was published in January 1993. It contained the following recommendations on the various proposed new housing sites that had been put forward:

"(i) no new settlements are required to meet our recommended housing requirement;

(ii) new settlements should not be ruled out for the future as a matter of policy;

(iii) they should be fully and objectively evaluated against other options by the County Council in its Review. That Review must look over a longer time-span than 10 years."

21. The sale of the site of Lothlorien took place seven months after publication of the Inspector's report. If, therefore, the possibility of future large-scale development in Palestine had adversely affected values in the area, this would have been reflected in the sale price of £43,500. Moreover Mr Smith of Drewett Neate, a chartered surveyor in practice locally, specifically assumed that the proposals for future development would not adversely affect value. In my opinion, no further adjustment is necessary on account of this factor.
22. In order to assess the prospects at the valuation date of planning permission being granted, it is necessary to outline the relevant planning history. Palestine is within the parish of Grateley. As such it falls within the administrative boundaries of Test Valley Borough Council (North). The settlement is dealt with separately from Grateley in the Borough Local Plan. The prevailing Local Plan was published in draft in November 1990 and placed on deposit in June 1992. Objections to the Plan were considered at a public local inquiry in 1993 and the Inspector's report was published in March 1995. Modifications to the Plan were published in November 1995 and the Plan, as amended, was adopted by the Borough Council on 8 April 1996.
23. The Local Plan for Palestine indicates, with bold lines, the frontages along Streetway Road and Mount Hermon Road (including the stretch past the appeal property) which were designated as "infill frontages". These designations were unaltered during the consultation process. The appropriate planning policy, dealing with development along frontages designated for infill, is policy C2. It states:

"In the countryside, within the frontage infill policy areas shown on the inset maps, development and redevelopment for housing will be permitted provided that it will be frontage development only and have a curtilage similar in size to those in the immediate vicinity."

24. On 10 April 1996 Mr Feltham wrote to the planning department of Test Valley Borough Council, seeking advice about the appeal property as at the valuation date. He said:

"I would be pleased if you could inform (sic) whether in your opinion planning permission would have been forthcoming at that time for the construction of a single dwelling on the land shaded blue on the plan."

25. Mr B H Williams replied on behalf of the Director of Planning on 12 April 1996, as follows:

"The Development Plan in force on 23 February 1995 for the area was the Andover Area Local Plan, although the Test Valley Borough Local Plan was even then at an advanced stage and would have been the relevant policy document to consider. That document then, as now, indicates the plot as being within a built-up frontage which is suitable for 'infilling' provided that the plot size was commensurate with those around it and that there was no detriment to the immediate surroundings.

Depending on the orientation of the existing dwelling and the windows serving it, I would suggest that a dwelling on the plot indicated might well have received the benefit of favourable consideration."

26. At the suggestion of Mr Feltham, the appellants submitted a planning application for outline planning permission for one detached dwelling on the southern part of the appeal property. This application was registered by the local planning authority on 1 October 1997. It was considered by the Northern Area Planning Sub-Committee on 20 November 1997 and at a site viewing on 5 December 1997, when the planning department's reasons for recommending that approval should be granted were considered. A further presentation was made by the planning officer at the Northern Area (Rural) Planning Sub-Committee meeting on 29 January 1998. This meeting proved inconclusive and so the application was presented to the Planning and Transportation Committee on 18 February 1998, which decided to approve it.
27. In my opinion, a properly advised purchaser of the appeal property at the valuation date would have based his conclusions as to the prospects of planning permission being granted for a further dwelling on Policy C2. This indicated that such consent would be forthcoming

"provided it will be frontage development only and have a curtilage similar in size to those in the immediate vicinity."

28. There would in my view have been no difficulty in siting a new dwelling with a frontage to Mount Vernon Road. In that respect, one requirement of policy C2 would have been satisfied. The further requirement of that policy, however, that the curtilage of the house would be "similar in size to those in the immediate vicinity" would have been less straight forward. Exhibit DV3 of Mr Feltham's report, which is a plan designed to illustrate the locality of the appeal property, is of significance to this test. It shows 19 other plots fronting Streetway Road and Mount Hermon Road. With the exception of the two houses immediately to the south of the appeal property - Lothlorien and Five Ways Cottage - which formerly formed part of the grounds of Clietus Cottage and were approved in 1988 - the curtilages of the remaining 17 plots are all substantially larger than the potential plot at the appeal property, even assuming it had Mr Feltham's suggested frontage of 60 feet. Moreover, the site area of Ashby Down, the house which abuts the eastern boundary of the appeal property, is 0.5 acres, or approximately three times the size of the proposed new plot. On the other hand the new plot would be similar in size to the curtilage of Lothlorien which adjoins it to the south. The only other house sharing a common boundary with the proposed plot was the remainder of the appeal property itself, but I do not consider it would have been appropriate to base a planning decision on the reduced area of the appeal property as it would have been following the grant of planning permission. In my opinion, the matter fell to be considered by reference to the curtilages in the immediate vicinity as they existed at the time the planning application was being considered. In my judgment, the conclusion to be drawn from the size of the curtilages in the immediate vicinity of the appeal property is that there was at the valuation date a fifty per cent chance of approval being granted for a new house on the proposed building plot. Contrary to the appellants' suggestion, it would have been open to the hypothetical purchaser to make informal inquiries of the local planning authority at the valuation date, as Mr Feltham did in April 1996. It is not certain that the hypothetical purchaser would have received a reply in the same form as Mr Williams' letter dated 12 April 1996. Whatever information had been forthcoming from a planning officer, however, would only have been an informal expression of opinion, subject to the final decision of the planning authority after a formal application had been submitted.
29. In my opinion, Mr Williams' suggestion that a planning application "might well" have received favourable consideration is not inconsistent with my own conclusion that the chances were fifty-fifty. Nor is my conclusion inconsistent with the fact that, three years after the valuation date, and following four meetings to consider the matter, such planning consent was in fact granted. (Incidentally, none of the evidence before me suggests that the decision of the Planning and Transportation Committee was influenced by the involvement of the Capital Taxes Office).
30. My conclusion is also not inconsistent with the four planning refusals on other sites in Palestine which were referred to by the appellants. The development proposed on the site adjoining Roseander was refused in 1981, among other reasons, because it was shown on the Mid-Hampshire Structure Plan as being "in a settlement where further development is not considered appropriate." I would add that the application site in that case lies just outside the area which was designated for infill by Policy C2 in the Local Plan which was relevant at the valuation date. The two proposed bungalows on a site adjoining Lyndale were refused in 1990, among other reasons, because the development "would give rise to unsatisfactory plot sizes and to a cramped, congested and urban looking environment." Although the plot sizes would have been significantly larger in area than that suggested at the appeal property, they would have been much smaller than the plots immediately adjoining them to the north and south. The circumstances leading to the refusal of consent in 1994 for a house at Sunnydale were quite different from those applying at the appeal property. It is clear from the Planning Inspector's decision in that case that, unlike the appeal property, Sunnydale was situated outside those parts of Palestine where the Local Plan would permit infilling. The application to construct three detached dwellings on a site between Cavilla and Meadow Bank was refused in 1997 because insufficient information had been provided. The decision notice, however, stated that it was "the opinion of the local planning authority that having regard to the scale and character of the immediate surroundings, a maximum of two dwellings should be considered for this site." The appellants pointed out that the density proposed for this development was very comparable to that which is suggested at the appeal property. In the light of my inspection of the area, however, I am satisfied that the average density of the existing development immediately surrounding the appeal property was higher than that surrounding the site between Cavilla and Meadow Bank.
31. I now consider the market value of the potential plot, to reflect my finding that there was a fifty per cent chance of planning permission being obtained. It is normal practice in such valuations to assess the value of the property on the basis of its existing use, and to add an element of "hope value" to reflect the prospect of planning consent. In this case neither party has referred to the existing use value of the potential plot as an additional garden enjoyed with the existing cottage and I infer, therefore, that any such value was minimal.
32. In my judgment, purchasers in general would have been reluctant to pay, by way of hope value, a price which fully reflected the chances of obtaining planning permission. If a prospective purchaser were seeking a site on which to construct a house for his own occupation, he would probably prefer to await the outcome of a planning application and, if appropriate, pay the full development value, rather than pay half of that value and run the risk of losing his entire investment. Similarly, a speculator would in my view not be interested in a purchase unless the potential profit resulting from a successful planning application were significantly greater than the potential loss if permission were not forthcoming.
33. Although he did not discuss this issue in these terms, I think that Mr Feltham adopted a similar approach. He deducted 20% from the full development value although, in his view, "all indications" were in favour of consent being granted. Moreover, he pointed out that there was very little evidence of property being offered for sale with potential for development. The reason for this, he said, was that:

"it is in the interest of vendors generally to pursue planning consents prior to sale to maximise the sale price."

If purchasers were prepared to pay for such land a price which fully reflected the prospect of obtaining planning consent, one would expect that many owners would prefer to accept such a price, rather than run the risk of losing much or all of the hope value as a result of an adverse planning decision.

34. I have not overlooked the fact that Mr Feltham referred to one instance where a potential building plot was offered for sale without planning consent having been obtained. He commented on the circumstances as follows:

"The first planning application by the vendor, made in the spring of 1997, was withdrawn prior to a decision being made and the following is taken from the selling agent's letter regarding the situation:

'The planning application was for the construction of a single dwelling on an area of garden belonging to (the property). This application was vigorously opposed by Test Valley Borough Council and the application was withdrawn prior to a decision being made on the assumption that it would have been refused.'

The vendor was thus trying to avoid an adverse planning history to the site prior to sale. The plot formed part of the garden to a Grade II Listed building and there were a number of mature trees on the site. In the sale, offers were invited for the plot without consent and the highest received was £95,000. Other offers, conditional on planning consent being obtained, were received and the highest of these was, I understand, £125,000. In the light of some considerable risk therefore, a bid of 76% of the full value was received for the plot in the absence of planning consent - but with the hope, in the purchaser's view, of achieving it."

35. I do not obtain any assistance from this information. The site was not identified, nor was any supporting documentation provided to verify the details given. In any event, it is clear that Mr Feltham placed no reliance on them. His deduction for risk of 20% for the appeal property site "with all indications in favour of consent being granted", was only slightly smaller than that which was apparently accepted for a site where was a "considerable risk" that permission would be refused.
36. Doing the best I can, I conclude that a speculator purchaser would have paid 25% of the full development value of the potential building plot, to reflect the 50% chance of obtaining planning permission. I therefore determine that the open market value of the appeal property on 23 February 1995 was £85,000 and the appeal is allowed to that extent. My determination is calculated as follows:

Clietus Cottage and reduced garden £72,500

Potential building plot - 25% of £50,000 £12,500

£85,000

37. What I have said so far concludes my determination of the substantive issues in this case. It will take effect as a decision when the question of costs is decided and at that point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and Order 61 rule 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions as to the costs of this appeal and a letter accompanying this decision sets out the procedure for submissions in writing.

Dated: 26 June 2000

(Signed) N J Rose

ADDENDUM ON COSTS

38. I have received written submissions on costs.
39. The Appellants ask for their costs totalling £9,656.94. The Respondents suggest that there be no order for costs. They point out that they were right in principle to attribute a value to the potential building plot, even though their expert's figure was held to be excessive. Alternatively, they request that any costs ordered to be paid should be taxed.
40. The appeal has been successful and I am not persuaded that there is any good reason why costs should not follow the event. It appears to me, however, that the sum claimed by the Appellants relates to certain other matters in addition to the appeal to this Tribunal. It is only the latter costs which fall within my jurisdiction.
41. I order the Respondents to pay the Appellants' costs of this appeal, such costs, if not agreed, to be the subject of a detailed assessment on the standard basis by the Registrar of the Lands Tribunal in accordance with rules 44.4 and 44.5 of the Civil Procedure Rules. The procedure laid down in rule 52 of the Lands Tribunal Rules 1996 shall apply to such detailed assessment.

Dated:

(Signed) N J Rose