[2002] EWLands ACQ_206_2000 (22 November 2002)
	ACQ/206/2000

	LANDS TRIBUNAL ACT 1949
	
	COMPENSATION – land acquired under reclamation scheme for development and conservation – whether ransom value payable for access – whether slag tip of value for mineral extraction – whether planning permission would have been granted – whether a market for material – hope value lost before valuation date – held 50% ransom payment to be assumed – no planning permission and no market for tip – no hope value at valuation date – loss of earlier hope value not due to scheme – compensation £282,000

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN	THOMAS’S EXECUTORS	Claimants
	(The Executors of Edward Thomas (deceased))

	and
		
	MERTHYR TYDFIL COUNTY	Acquiring
	BOROUGH COUNCIL	Authority

	Re: Approximately 8.691 Hectares of a former 
	Tip Rough Grazing, Part Ancient Monument
	together with part Bank and Bed of River Taff,
	Land adjacent to Swansea Road, Merthyr Tydfil

	Before: The President

	Sitting at 48/49 Chancery Lane, London WC2A 1JR
	on 17, 18, 19, 20 and 21 June 2002

The following cases are referred to in this decision:

Pentrehobyn Trustees v National Assembly for Wales (LT ref ACQ/116/2000, 14 Nov 2002)
Director of Buildings and Land v Shun Fung Ironworks Ltd [1995] 2AC 111
Re Lucas and Chesterfield Gas and Water Board [1909] 1KB 16
Melwood Units Pty v Commissioner of Main Roads [1978] AC 436
Jelson v Blaby District Council [1977] 1 WLR 1020
Pointe Gourde Quarrying and Transport Co v Sub-Intendent of Crown Lands [1947] AC 565
Ryefields Securities Ltd v Staffordshire County Council (1972) 24 P & CR 411
Williamson v Cambridgeshire County Council (1977) 34 P & CR 117
Penny v Penny (1868) LR 5 Eq 277
West Midland Baptist (Trust) Association (Incorporated) v Birmingham Corpn [1970] AC 874

The following additional case was cited in argument:

BSH Holdings Ltd v West Ashford Rural District Council (1972) 24 P & CR 392

Mr Joseph Harper QC instructed by Charles Crookes & Jones, solicitors of Cardiff, for the claimants.
Miss Mary Cook instructed by Barbara James, Corporate Chief Officer, Legal and Regulatory Services, Merthyr Tydfil County Borough Council, for the acquiring authority.

DECISION
1.	This reference concerns a claim for compensation for the compulsory acquisition of 8.7 ha (about 22 acres) of land at Merthyr Tydfil.  The land was acquired under the Mid Glamorgan County Council (Pontycafnau Reclamation Scheme) Compulsory Purchase Order 1994.  The land vested in the acquiring authority on 29 March 1996 pursuant to a general vesting declaration.  It is agreed that that date is the valuation date.  The subject land is part of a wider area of 16 ha forming part of or associated with the former Cyfarthfa Ironworks that were in operation from the 18th century until their closure in the early 20th century.  The purpose of the reclamation scheme was to reclaim derelict land for development and to preserve features of an area considered to be of historic importance.  
2.	Following the hearing, I viewed the subject land and its surroundings on 27 June 2002 and I received counsel’s closing submissions in writing on 11 and 15 July 2002.  I delayed the production of this decision pending my decision in Pentrehobyn Trustees v National Assembly for Wales (LT ref ACQ/116/2000, 14 November 2002) which concerned important issues on the proper approach to assessing the prospects of planning permission in the no-scheme world and the effect of a negative section 17 certificate.
The subject land and its surroundings
3.	The subject land is an irregularly shaped area of land, much longer than it is wide, extending northwards from Swansea Road for a distance of rather over half a mile.  To the east is the River Taff, which runs north-south along the northern half of the subject land, and to the west is the A470 dual carriageway, also running north-south, constructed since the valuation date.  For valuation purposes the subject land has been divided into five blocks, as follows.  Block 1 abuts Swansea Road, extending north from it.  It is 3.13 acres in area.  It lies at the top of the 100 ft high walls of the furnaces of the old ironworks.  Below it, between the furnaces and the river is a cleared area of flat land known as the lower plateau.  The furnaces are a scheduled ancient monument, and because of their presence within Block 1 they reduce the width of the land available for development to a narrow strip.  The land has a generally rough surface and is covered with scrub vegetation.  To the west of Block 1, also on the higher land, and with a frontage to Swansea Road is the site of the former Thorn Lighting factory, which was demolished in 1994.  It has now been cleared.  It does not form part of the subject land and has never been owned by the claimants.  
4.	Block 2, extending northwards from Block 1, is 5.38 acres in area and consists of an upper plateau, much of which is made ground.  On its east it slopes steeply down to the lower plateau.  It includes a 50 foot deep ravine.  Running east-west across it is an 11kV electricity line mounted on poles.  A public right of way, now forming part of a long-distance footpath, the Taff Trail, crosses the land from the south-east to the north-west.  The land is covered with scrub vegetation and some larger trees.
5.	Block 3, the northern-most extension of the subject land, is 11.95 acres in area and consists mainly of a fused slag tip known as “the Finger Tip”.  It is bounded on the east by the River Taf Fawr, which is joined, towards the southern end, by the River Taf Fechan.  the tipping evidently pushed the river to the east along part of the length of the tip, and the river has since undercut part of the tip.  At its highest point the tip rises to about 65 feet above the river.  A leat, which formerly took water to the ironworks from the Taf Fechan to the north of the Finger Tip, lies on the western side of the tip, although the tipping has filled it in to the north of the Finger Tip and along the south-west side.  The tip itself supports vegetation but substantial parts of its sides and top are bare.  Its lower slopes, up to about 10 feet above the level of the river, are covered in emergent woodland, as is the south-western side where the tip falls to meet the leat.  The land in this area  is in the form of grassy hillocks formed by the tipping.  It is crossed north-east/south-west by a 33kV overhead electricity line on steel pylons and north-west/south-east by a 132kV line also on steel pylons.
6.	Block 4 consists of half the width of the river on the eastern side of Block 3.  It is 0.82 acres.  Abutting the southern end of Block 4 is a bridge across the river, the Pontycafnau bridge, another scheduled ancient monument.  Finally, Block 5 is a narrow strip of land downstream of Block 4, consisting of half the width of the river, the river bank and an area of uncultivated land.  Most of the land forms part of an area scheduled as ancient monument.  It is 0.25 acres in area.  
7.	To the west of the subject land work began in early 1995 on the Pentrebach – Cefn Coed section of the A470 trunk road.  Work was in progress at the time of valuation.  The road provides a north-south bypass for Merthyr Tydfil town centre.  It links in to the A465 Heads of the Valleys road to the north, and the already improved A470 to the south.  Land adjoining the south of the subject land was included in the Western Relief Road Compulsory Purchase Order 1995, which was made in 1995 and was confirmed in October 1996.  The scheme was designed to provide access into the town centre from a roundabout on the A470, with a roundabout a short distance from the A470 giving access to the Thorn site and to land known as the Waterglade site to the south. 
The issues
8.	I set out as Appendices 1 and 2 the alternative valuations of the claimants’ valuer, Keith Murray FRICS.  At Appendix 3 is the valuation on behalf of the acquiring authority by Martyn John Williams FRICS, District Valuer, Wales.  From this it will be seen that there is agreement on the values of Blocks 1, 4 and 5: £1,565 for Block 1, and £535 for Blocks 4 and 5 together.  On Block 2, the upper plateau, there is agreement on the land value (£910,750), the remediation costs that would have to be incurred to enable that value to be realised (£265,000) and on deferment for 1 year at 15% to produce a net value of £559,865.  There is disagreement between the valuers as to whether a ransom payment for access would have to be paid to the owner of the Thorn site.  Mr Murray says that no such payment would have to be made.  Mr Williams deducts 50% (£279,833) for each payment.
9.	On Block 3, the Finger Tip, there is disagreement as to whether the land had value for the purposes of mineral extraction.  Mr Murray said that it had, and he took a value of £1,700,00, which was derived from the valuation of Professor Denis Buchanan.  From this he deducted £135,000 for the cost of a haul road.  The difference between his two valuations arose from the fact that in one he made a deduction of £2,240 for royalty payments to the Welsh Development Agency and in the other he did not.  
10.	Mr Williams valued Block 3 at nil because a section 17 certificate issued by Merthyr Tydfil Borough Council stated that no planning permission would be granted and because the advice of Integral Geotechnique (Wales) Ltd, the council’s geotechnical engineering consultants, was that the minerals had no commercial value.  No issue was taken with the cost of the haul road if it were to be provided.
11.	The issues to be considered, therefore, are these:
(a)	Block 2 access.  Whether the claimant would have had to make a ransom payment for access to the owner of the Thorn land, and, if so, the amount of such payment.
(b)	Whether planning permission would have been granted for the removal of the slag from Block 3, the Finger Tip.  This requires a consideration of the section 17 certificate and the weight to be attached to it; planning policies; and other planning considerations.
(c)	Whether, if planning permission has been granted, the slag forming the Finger Tip would have had commercial value, and, if so, what that value would have been.  This requires a consideration of the nature of the tip’s contents, the estimates of volume and density, the cost of extraction, whether there would have been a market for the mineral and the price that it would have fetched.
12.	Addressing these issues Mr Joseph Harper QC for the claimants called Clifford Thurlow BA, Dip TP, MRTPI, town planning consultant; Professor Dennis Buchanan MSc, PhD, FIMM, Chartered Engineer, Emeritus Professor of Mining Geology and Senior Research Fellow at the Royal School of Mines, Imperial College; and Mr Murray.  For the acquiring authority Miss Mary Cook called Michael Anthony Boaden BA, MRTPI, the council’s Planning Manager; Mark Riley MSc, a Senior Engineering Geologist with Intergral Geotechnique (Wales ) Ltd; and Mr Williams.
13.	Issue (a) raises a relatively short point, and I will deal with it first before turning to the more extensive matters that arise under issues (b) and (c).
Block 2 access
14.	In his report, prepared in December 2001, Mr Murray had pointed out that, in order to realise its maximum development value, land had to have unrestricted access.  If it did not, the full value could only be realised by passing a share of that value to the person who was able to facilitate the access.  Having considered alternative accesses, he concluded that the only possible access to the upper plateau was through the Thorn site.  While in a normal ransom situation the owner of the land controlling the access might seek a payment of 50% of the development value, in the case of the Thorn land the owner would see that a merger of his land and the upper plateau would produce a more viable developable landholding.  He would therefore look for a lower ransom payment, which Mr Murray put at 25%.
15.	In his rebuttal report of May 2002 Mr Murray said that he had agreed with Mr Williams that if the only possible access was across the Thorn land, a 50% reduction was appropriate; but that if the claimants could demonstrate that an alternative viable access was available across their own land, a 25% reduction was appropriate; while, if the claimants could demonstrate that they had a right of access across the Thorn land at no cost to them, no reduction was appropriate.  
16.	In evidence Mr Murray said that he justified his valuation, in which there was no reduction for ransom value, because at the Western Relief Road inquiry an agreement had been reached between the claimants and Merthyr Tydfil MBC, who by then owned the Thorn land, that access to the upper plateau would be provided without charge.  He relied on a statement to this effect contained in a witness statement lodged with the Tribunal by Councillor Baynham.  The evidence contained in that statement was not, however agreed by the authority and Cllr Baynham was not made available for cross-examination.  In any event, the public inquiry took place in June 1996, so that even if an agreement was in fact reached as stated in Cllr Baynham’s witness statement, it was not in existence at the valuation date.  Nor was any evidence advanced to suggest that, at the valuation date, such an agreement was in contemplation and would have been assumed by the parties in a sale of the subject land.  In these circumstances, the right conclusion, in my view, is that at the valuation date the vendor and purchaser of the subject land would have taken the view that a ransom payment for access across the Thorn land would have to be made.
17.	Mr Murray said that two considerations might reduce the ransom payment below 50%.  The first was that the local planning authority might be interested in ensuring that the upper plateau was made available for development and would thus require development of the Thorn land to be laid out so as to provide access. I have little doubt that the planning authority would not approve a layout for development of the Thorn land that would preclude access to the upper plateau.  There is no evidence to suggest, however, that it would have required, by condition, that an access road be provided up to the boundary and, by agreement, that such access road should be dedicated as highway.  In the absence of such requirements, the owner of the Thorn land would have remained in a position to demand a ransom payment.  The inescapable likelihood, in my view, is that such a payment would have to have been made.
18.	On the amount of such ransom payment Mr Murray reiterated the point made in his report that the owner of the Thorn land might see advantage in a merger of that land and the upper plateau to achieve a more profitable development.  There is nothing, however, to suggest that in reality there would be advantage to the owner of the Thorn land from such a merger.  I attach no significance to the layout produced for the Highstar development, which showed the development going marginally onto the subject land.  There is nothing to lead me to conclude that an equally profitable development could not be achieved without such encroachment.
19.	Accordingly, I can see no reason for assuming a ransom payment of other than 50%.  I accept Mr Williams’s evidence that this is the reduction that must be assumed.
Issues (b) and (c): the claimants’ case
20.	Mr Harper submitted that the correct approach to the valuation of the claimant’s land, and in particular the Finger Tip, depended on identifying the scheme and disregarding its effect on value.  He referred to the general principle, as stated by Lord Nicholls in Director of Buildings and Land v Shun Fung Ironworks Ltd [1995] 2AC 111 at 135H-136B, that a loss in value attributable to the scheme is not to enure to the detriment of the claimant.  He relied on Fletcher Moulton LJ’s statement of the no-scheme rule in Re Lucas and Chesterfield Gas and Water Board [1909] 1KB 16 at 29-30 and Melwood Units Pty v Commissioner of Main Roads [1978] AC 436.  Mr Harper said that the formulations of principle were directly in accordance with sections 5 and 9 of the 1961 Act.  Section 9 was clearly applicable and, although there was no need to test its applicability by reference to decided authority, it was very much supported by Jelson v Blaby District Council [1977] 1 WLR 1020.
21.	Mr Harper said that the scheme appeared to date back at least to early 1992, with the publication of a planning brief in February and its adoption as Supplementary Planning Guidance in April; and the application for an Article 4 direction in May.  These events, he said, marked a shift from previous attitude to the claimants’ land, for example the 1976 application and 1977 permission for reclamation of the tip.  The planning brief/SPG were thus the scheme itself and must be ignored for the purpose of assessing compensation.  The claimants’ case was that, whilst the scheme precluded removal of the tip, in a no-scheme world removal would not have been precluded but would have been encouraged; and mineral from the tip would have been at the very least a serious competitor for fill and/or for base material for one or other of the road schemes in the vicinity of the subject land during the early to mid 1990s.  He said that it did not matter if the market had slipped away or was slipping away by the valuation date. A fall in the market must be disregarded.  All sorts of examples might be given, but an obvious one was the compulsory acquisition of houses in a falling market.  To take the matter one stage further, it would be quite wrong for the acquiring authority to delay entry in order to get the property for a rock bottom price.
22.	These submissions run together issues (b) (planning) and (c) (the contents of the tip), and they raise a number of matters that need to be separately dealt with.  I deal first with planning.  In order understand the context in which Mr Harper’s submissions on this arise, it is necessary to establish the factual background and to note the evidence given by Mr Thurlow and Mr Boaden.
The planning background
23.	Application for a certificate of appropriate alternative development under section 17 of the Land Compensation Act 1961 was made on behalf of Mr and Mrs E Thomas in a letter dated 28 August 1992.  The application sought in relation to the whole of the subject land a certificate for the following uses:
1.	Removal of the Finger Tip;
2.	Commercial;
3.	Business;
4.	Light industrial;
5.	Retail and retail warehousing;
6.	Leisure;
7.	Housing.
24.	It is to be noted that in the letter of 28 August 1992 the agents had stated that “it is our intention to remove part of the waste known as the finger tip.  We anticipate that the bulk of the removal will be utilised in site fill and as limited embankment fill for the proposed A470 extension.”
25.	The certificate stated that planning permission would have been granted on the land identified on the plan accompanying the certificate (which excluded the Finger Tip) for the following uses:
“Business and light industrial (Use Class B1)
Leisure
Retail uses ancillary and complimentary to heritage and tourism (NOT Use Class A1 generally)
Informal recreation
Food and drink.”
26.	The certificate said that permission would have been subject to certain conditions.  The conditions related to the approval of detailed plans; a comprehensive layout; the need to avoid any adverse effect on the ancient monument (Cyfarthfa Furnaces), the listed Pontycafnau Bridge and their settings; access; and a comprehensive landscaping scheme taking account of the A470 Stage 5, the River Taff and the Cyfarthfa Furnaces Heritage Area.  On the certificate form the words “Planning permission would not have been granted for any development of the land in question other than the development (if any) which is proposed to be carried out by the Authority by whom the interest is proposed to be acquired” were deleted.
27.	Planning permissions relating to all or parts of the subject land include the following.  On 6 July 1977 permission was granted to Merthyr Tydfil Borough Council on a site of 15.6 ha that included the Finger Tip for “The elimination of the existing unacceptable industrial dereliction to create the maximum area of ‘level’ land suitable for industrial after development and the elimination of the existing steep gradients to the side slopes along the River Taff”.  On 30 April 1993 Mid Glamorgan County Council were granted planning permission on land referred to as “Cyfarthfa Ironworks and Pontycafnau Reclamation Scheme site, land off Swansea Road, Merthyr Tydfil.”  The description of the development permitted was: “Upper plateau to east of A470 – Use Classes B1, C1 and commercial user ancillary to Industrial Visitor Attraction.  Land to west of proposed A470 – Recreation.  Remainder of site – Industrial Heritage Visitor Attraction within Riverside Park.”
28.	It is also to be noted that on 23 January 1996 application had been made by Highstar Developments (Merthyr) Ltd for a mixed retail and leisure development with associated infrastructure works and car parking on the former Thorn Lighting factory and Waterglade (Oldway Industrial Estate) site.  The application had not been determined at the valuation date.
29.	There are three designated ancient monuments partly included within or adjoining the subject land.  The first is the Tai Mawr Leat, designated on 7 April 1995.  Secondly, parts of the remains of the Cyfarthfa Ironworks were variously designated on 20 April 1982, 6 January 1992, 4 January 1993 and 2 August 1993.  The third ancient monument is the Pontycafnau Bridge, which was designated on 16 August 1985.  It is also a Grade II listed building.  The statutory development plan at the valuation date comprised the approved Mid Glamorgan Structure Plan 1989 and the Merthyr Tydfil Town Map 1960.  On the Town Map the upper plateau was allocated for industrial development and the Finger Tip was shown as white land.  In the structure plan, policy M11 provided that applications for planning consent for the extraction of material from spoil tips were to be considered in relation to a number of criteria including the effect on landscape and conservation interests.  There were a number of policies providing for the reclamation of derelict land and setting out priorities for this.  Policy D3 provided that within each priority category priority would be given for sites containing features of architectural, historic or industrial archaeological importance.
30.	At the date of valuation the Mid Glamorgan Replacement Structure Plan 1991-2006 was at the deposit stage, having been issued for consultation in December 1994.  It was subsequently adopted with minor re-wording by Merthyr Tydfil Borough Council following the reorganisation of local government in 1996.  In the minerals policies MIN 1 laid down the criteria of acceptability of mineral extraction and MIN 8 provided that permission for the extraction of material from mineral working deposits would only be permitted where they were acceptable under MIN 1 and would (where relevant) maintain tip safety and be unlikely to generate unacceptable levels of environmental pollution.  The derelict land policies combined new requirements to produce supplementary planning guidance (D2) and to protect and enhance features of conservation interest, either built or natural (D5).  An environment policy, EV10, provided: 
“Development on or within major sites or features of the built and historic environment will be considered as follows:
…2.  Development which fails to preserve, maintain or enhance where possible the existing character of other single or groups of buildings, conservation area or other features recognised as being of local architectural or historic interest in local plans (such as other identified buildings and historic parks, gardens and landscapes) will not normally be permitted.”
31.	The Merthyr Tydfil Borough Local Plan was at its draft stage at the date of valuation.  A deposit version was issued in April 1996.  Policy SV1 of the plan provided that the council would endeavour to make positive decisions concerning the effective use of land within existing urban areas, including the re-use and re-cycling of land by means of reclamation and redevelopment.  Policy SV3 contained a similar provision in relation to the protection of wildlife, species and habitats and historic built and archaeological sites.  Policy MR3 sought the restoration of the majority of the remaining derelict land by the end of the plan period.  The plan designated a Cyfarthfa Heritage Area extending over a wide area of Merthyr Tydfil.  Among the features it was stated to include were Cyfarthfa Ironworks, the Pontycafnau Bridge and the Finger Tip.  Policy HT16 provided that development proposals within this area would cater primarily for heritage, recreational and tourism activities.  
32.	A document entitled “Cyfarthfa Ironworks and Pontycafnau Land Reclamation Scheme – Supplementary Guidance” was prepared by Mid Glamorgan County Council in 1991/92.  It noted the potential for parts of the area for visitor attraction, a linear riverside park and development opportunities.  It was this document that provided the planning foundation for the compulsory purchase order, and it is the submission of the claimants that it was in effect the scheme underlying the acquisition.  It made the following specific proposals, among others:
“6.4 	The ‘finger tip’ shall be retained, enhanced and interpreted.
6.5	The remains of the Ironworks, including the blast furnaces, any exposed foundations and Pontycafnau Bridge, together with other features of the historical landscape, shall be developed as a visitor attraction, with an associated linear riverside park.
6.6	Provision shall be made to maximise the amount of land for development on the upper plateau.  If the whole of the upper plateau is included, provision shall be made for commercial/light industrial/leisure uses.   Alternatively, provision shall be made to extend the industrial use.”
33.	At the same time as the production of the planning brief the Welsh Tourist Board produced a study of “Tourism in Merthyr Tydfil.”  In relation to the Finger Tip, it said that, as it –
“.. is an integrated part of the industrial landscapes, and is important to understanding the historical use of the Pontycafnau site, its reclamation with a view to extracting its mineral content would be very regrettable.”
34.	The Guidance noted that the surface of the Finger Tip displayed a plant community typical of highly calcareous and low nutrient bearing soil.  It said:
“The most important wildlife conservation areas are the ‘finger tip’ and its banks, semi-natural woodland associated with the disused feeder, the ravine and the small pastures to the north west of the site.  These are well-established vegetated areas, supporting considerable plant and invertebrate communities of interest.  With the exception of the ravine these should be retained, and protected within the development of the site.”
35.	Mr Thomas was an objector to the CPO at an inquiry into his and other objections in May and June 1995.  Mr Thomas objected only to the inclusion of the Finger Tip in the order.  His case was that the tip represented an aggregate resource of value; that the extraction of the material would be in accordance with planning policy; that there was concern about its stability, giving rise to public safety concerns; and that the tip was of no heritage importance.  In his conclusions the inspector dealt with these matters, and also with the ecological value of the tip, a matter relied on by Mid Glamorgan County Council in support of their case for confirmation of the order.
36.	On the historical value of the Finger Tip the inspector recorded Mr Thomas’s claim that the material was tipped late in the history of Cyfarthfa, during the steel-making period of about 1894-1902, and was therefore relatively unimportant to the iron-making history of the site.  The inspector rejected this contention.  He said:
“11.6	… However, far from diminishing its interest, I regard its physical existence and visual evidence of blast-furnace iron slag and steel slag as being of more importance as a rarity in this region.  This is particularly so because it has been little touched since the furnaces ceased operations.
11.7	… I take the view that it is a relatively small, but fairly intact, furnace slag heap that would be ideal for interpretation purposes as it could demonstrate both early and later phases of operation, even though it is not contemporary with the great iron-making phase.  I consider that it forms an important and interesting part of the history and later development of the whole Cyfarthfa Ironworks site and its removal would have a negative impact upon the purpose of the Order to reclaim and landscape the site for industrial heritage interpretation.

11.8	… There is a clear opportunity on this site to not only preserve the scheduled ancient monuments and the bridge, but to interpret their history from the 18th to the 20th century, the complete process from iron-making to waste tipping, in a heritage park landscaped setting.”
37.	On ecological value, the inspector said:
“11.9	… Whilst the list of plants and wildlife present on the tip is not particularly rare for the wider region, it is of interest in this particular industrial location as an example of a pioneer landscape on an island of calcareous material.  From my inspection, the visual evidence of a special habitat seemed rather thin on the ground, but I have no doubt that it contains plants not normally found in the vicinity.”
38.	On the safety of the tip, the inspector recorded the case for the objectors that the tip was unsafe for the public both because the friable surface was liable to make people slip down the side and also because erosion of the eastern face by the river could cause blocks to shear and drop into the river.  Expert evidence was called both on Mr Thomas’s behalf and for the council.  The inspector said that, unlike quarry or colliery waste, the tip had a consistency similar to concrete.  It appeared to be very stable and it eroded very slowly on the top surface.  The collapses of the overhanging edge of the tip appeared to have taken place more than 25 years previously, and the cracked section of the tip had been monitored for some 21 years.  He concluded from this that the tip was relatively stable, so that the unpredictable collapses to which Mr Thomas’s expert had referred would be very rare occurrences, possibly in river flood circumstances when children would not be swimming.  The proposed scheme would improve surveillance of the site, so that it would make the tip safer for future public use. 
39.	On the question of the removal of the tip, the inspector said:
“11.8	Despite the objector’s claims to the contrary … it does not appear to me that the extract of the material from this old tip would be in accordance with development plan policies ….  One of the main objections of the MGCC derelict land policy has been to concentrate initially on schemes to remove dangerous dereliction, but policies D1 and D2 of the Structure Plan state that derelict land will receive treatment appropriate to the nature of the site and the proposed after-use of the land in accordance with a planning brief and supplementary planning guidance for the site.  Supplementary Planning Guidance for Cyfarthfa Ironworks … has been prepared in accordance with the Structure Plan policy, and it follows the advice in policies D5 and D6 with regard to the enhancement of industrial archaeological features and the conservation of existing natural habitats.

11.19	According to MGCC’s own annual inspections, the Finger Tip is not a derelict site where safety issues require its removal, but it is seen as an important part of the industrial heritage and ecological interest of the whole CPO site, which accords with my own assessment of the condition and potential value of this tip.  Whilst published research papers and recent government guidance in MPG’s … advise the recycling of waste materials in the construction industry generally, this is specifically with regard to waste as it is produced, rather than old tips such as this.  There is some evidence that blast-furnace slag in particular can be re-used in road construction …, but this is not conclusive with regard to mineral contents of the Finger Tip, which appears to be a mixture of blast-furnace and steel slag, which is not acceptable for construction projects ….”
40.	Finally the inspector concluded that removal of the material would be difficult to achieve without causing harm to the quality of the river water.
Planning evidence
41.	Mr Thurlow, the claimants’ planning evidence witness, said that he had 30 years experience in the practice of town planning.  He had specialised throughout his career in mineral and development-related planning.  His evidence was directed towards criticism of the section 17 certificate.  His view was that, in the no-scheme world, planning permission could have been expected for the extraction of the minerals forming the Finger Tip.
42.	Mr Thurlow said that the Finger Tip had never been made the subject of any national or local protective designation.  There had been an intention on the part of CADW to include it, along with other parts of the Cyfarthfa Ironworks site, in a non-statutory register of historic parks and gardens that CADW were preparing in the early 1990s.  Its inclusion was not, however, proceeded with.  The absence of any national or local designation meant, Mr Thurlow said, that only limited weight should have been given to conservation considerations.  Mr Thurlow considered that the supplementary guidance or planning brief should be left out of account – and was wrongly taken into account by the council in deciding the section 17 application – because it was itself the scheme.  Alternatively, it should be given limited weight only.  It had been approved for consultation purposes by the county planning committee on 7 February 1992, had been the subject of a public exhibition on 2/3 March 1992, and was adopted by the county council on 15 April 1992.  This was a remarkably quick process, and there were no reports saying what the responses were to the consultation or how they had been taken into account, although Mr Thurlow accepted that the adoption of the guidance had been in accordance with PPG 12.
43.	Mr Thurlow said that policies in the approved structure plan indicated a general presumption in favour of derelict land reclamation, subject to a proper consideration of relevant nature conservation and heritage matters.  The deposit version of the local plan also indicated a general presumption in favour of derelict land reclamation, but publication of this was after the valuation date.  National planning policy favoured the re-use of mineral waste.  Para 71 of MPG1 (January 1988) stated:
	“The use of mineral waste or other materials should be encouraged wherever practicable to reduce the demand on green field sites for mineral extraction.  In many cases this will offer the additional benefit of land reclamation by helping to remove unsightly waste tips, whilst at the same time preserving other mineral resources for the future.  Aggregates are the principal materials for which waste and other materials (e.g. pulverised fuel ash and blast furnace slag) can be used as a supplement or substitute.”
44.	Similarly, MPG6 (1989) stated:
“16. 	The use of secondary materials such as ….blast furnace slag… is to the nation’s advantage and should be encouraged….
17.	Increased utilisation of wastes could reduce the demand for primary aggregates… The most ready use for alternative materials is as a bulk fill.  DOE Circular 20/87 (Welsh Office Circular 36/87) sets out Government policy on the use of alternative material for road fill and asks planning authorities to identify alternative potential sources of suitable fill for trunk road scheme.”
45.	Mr Boaden, the acquiring authority’s planning witness, said that he had been employed by the council and its predecessors since 1970.  He set out the planning history of the subject land and the development plan provisions that he considered to be relevant.  He placed particular reliance on the Supplementary Planning Guidance contained in the planning brief.  The development of the Cyfarthfa Ironworks as a visitor attraction had been the basis of numerous reports and studies, as the planning brief had noted.  At the same time as the planning brief, the Wales Tourist Board had produced the major study “Tourism in Merthyr Tydfil”, which devoted a whole section to the Pontycafnau reclamation scheme and Cyfarthfa Furnaces and made particular reference to the Finger Tip, saying that it was an integral part of the industrial landscape, so that its loss for mineral extraction would be very regrettable.
46.	Mr Boaden summarised the principal elements of the planning background as being the section 17 certificate, against which there had been no appeal; the planning brief with ita proposal that the Finger Tip should be retained, enhanced and interpreted; the development control history of the Thomas land, with only two applications having been made in the period 1947 to 1996 and one permission granted – in 1955 for working coke tips on land next to the Thorn factory; and the planning permission for the reclamation scheme.
47.	Mr Boaden did not accept that MPG6 imposed an initial duty on the authority to see whether non-natural materials could be used.  When preparing a minerals plan the planning authority would assess all sources, including land reclamation sites.  In cross-examination he said that until the SPG there had not been, in any formal sense, express opposition to the removal of the Finger Tip.  He agreed that there had never been any attempt to give the Finger Tip protection through some formal designation recognising its historical importance, despite the fact that the SPG said that it had been tipped “over a long period of time.”  He agreed that the SPG gave no consideration to the question whether the historic environment of the leat, which was not scheduled as an ancient monument until 1995, might be improved by removal of the tip and restoration of the land.
The scheme
48.	Mr Harper’s submission was that the scheme was the Supplementary Planning Guidance.  Miss Cook said that the scheme should not be equated with the SPG.  The best description of the scheme was that in paragraph 1.2 of the CPO inspector’s report, where he said:
“MGCC seeks to acquire the Order land to carry out a derelict land reclamation scheme and to make it available for use or development.  The remains of the ironworks, the recently refurbished iron bridge, and associated areas would be developed as an industrial heritage visitor attraction; the Finger Tip would be retained and interpreted; a visitor centre and car parking for the ironworks and historic site would be provided; a route for the Taff Trail cyclepath would be part of the scheme; land at the upper level would be made available for industrial development and leisure uses ancillary to the proposed industrial heritage visitor attraction; and an extensive landscaping and screening scheme would be undertaken.”
49.	In essence, therefore, said Miss Cook, the scheme was a derelict land scheme, the purpose of which was to make land available for use or development.  As far as the Finger Tip was concerned, the land was to be retained, enhanced and made available for interpretation purposes in association with the Cyfarthfa Ironworks.  In that sense the scheme accorded with the planning guidance and the proposals in the SPG but that did not mean that the SPG was the scheme.  Moreover, in accordance with the rule in Pointe Gourde Quarrying and Transport Co v Sub-Intendent of Crown Lands [1947] AC 565 the owner would only be entitled to receive compensation based on the market value of the Finger Tip as it stood before the scheme was authorised for public purposes.  In assessing any element of value the question was what if any planning permissions might reasonably have been expected to be granted.  In considering that question, said Miss Cook, there was no reason why the SPG should not be taken into account.  
50.	I accept that judicial decision has established that a claimant is entitled to rely on any planning permission that he can show would have been granted in the no-scheme world if that would give the subject land a higher value than one derived from an application of the statutory planning assumptions (sections 14 to 17 of the 1961 Act) and the rules in section 5: see Pentrehobyn.  The basis for this is both the Pointe Gourde rule and section 9: see Jelson v Blaby.  The claimant can also rely on any hope value existing in the no-scheme world.  I accept that the scheme was the scheme of land reclamation and development described in the SPG.  The questions, which I address below, are what planning policies would have applied in the absence of the scheme and whether planning permission would have been granted for the extraction of minerals from the Finger Tip.
The section 17 certificate
51.	Under section 17(4) the authority were required to issue a certificate “stating either of the following to be the opinion of the local planning authority regarding the grant of planning permission in respect of the land in question, if it were not proposed to be acquired by any authority possessing compulsory purchase powers, that is to say – 
(a)	that planning permission would have been granted for development of one or more classes specified in the certificate (whether specified in the application or not) and for any development for which the land is to be acquired, but would not have been granted for any other development; or 
(b)	that planning permission would have been granted for any development for which the land is to be acquired, but would not have been granted for any other development.”
52.	The certificate stated that planning permission would have been granted on the land identified on the plan accompanying the certificate for the uses that it listed, subject to certain conditions.  The plan excluded the Finger Tip land.  On the certificate form the words “Planning permission would not have been granted for any development of the land in question other than the development (if any) which is proposed to be carried out by the Authority by whom the interest is proposed to be acquired” were deleted. 
53.	Miss Cook said that section 14(3) of the 1961 Act, which provides that nothing in sections 15 and 16 is to be construed as requiring it to be assumed that planning permission would necessarily be refused for development which is not development for which planning permission is to be assumed under those sections, did not prevent the claimant, as a matter of law, going beyond the positive certificate since a section 17 certificate does not exclude all other planning assumptions or probabilities.  She referred to Ryefields Securities Ltd v Staffordshire County Council (1972) 24 P & CR 411 on this point.  However, she said, in contending that planning permission would have been granted for the removal of the Finger Tip, the claimants were attempting to go behind the certificate.  Even though no opinion was explicitly expressed in the certificate about the prospect of planning permission being granted for mineral extraction, it must, Miss Cook said, have been implicit from the nature of the application and the certificate actually granted that the council were expressing an opinion that permission would not be granted for removal of the tip.  She referred to Williamson v Cambridgeshire County Council (1977) 34 P & CR 117, in which the President (Sir Douglas Frank QC) said that section 14(3) was not intended to require the Lands Tribunal to determine whether planning permission could reasonably have been expected to have been granted for a particular development when an application for a section 17 certificate could have been made to establish this.  She said that there was no reason for the position to be any different where, as here, a section 17 application is made for a specific development, the certificate is not granted for that development and no appeal is made under section 18.  The Tribunal ought, therefore, to be extremely cautious about any attempt to go behind a positive section 17 certificate against which no appeal has been made.  Unless there has been a significant change in circumstances, Miss Cook said, there would be nothing to justify the Tribunal taking a view different from that expressed explicitly or implicitly in the certificate.  To adopt any other approach would undermine the certificate procedure and the statutory assumptions that must be made in consequence of the certificate.
54.	I cannot accept Miss Cook’s submissions on the effect to be given to the section 17 certificate in the present case.  The Act, in my judgment, operates in this way.  To the extent that a certificate is positive, section 15(5) requires it to be assumed that planning permission would be granted for the development specified in the certificate.  To the extent that the certificate is negative, section 14(3A) requires the Tribunal, in determining whether planning permission could reasonably have been expected to be granted, to have regard to the opinion expressed in the certificate that planning permission would not have been granted.  In Pentrehobyn I expressed the view that, although in their original form sections 14 to 17 were designed to give a firm planning basis for valuation consisting of planning permissions actually in force, assumptions as to planning permission under sections 15 and 16, and any hope of planning permission existing in the real world (para 74), judicial decision and the amendment of the Act had enabled a claimant to rely on any planning permission that would have been granted if the scheme had never been conceived.  In considering a contention that planning permission would or might have been granted, the Tribunal is not bound by any view expressed in a negative certificate.  Section 14(3A) conspicuously does not require this.  It requires instead that regard is to be had to the contrary opinion.  I said (para 86) that the correct approach for the Tribunal to adopt is to have regard to the opinion expressed, attaching weight to it that takes account of the position of the authority as planning authority, the process which has resulted in the certificate being issued, the reasons for the opinion, and the totality of the evidence that the Tribunal has before it.  It must then reach its own view in the light of these considerations.
55.	In the present case the Merthyr Tydfil Borough Council failed to express the negative opinion that it was required to express under section 17(4)(a).  In that respect the certificate was an incomplete certificate, with no contrary opinion expressed, and section 14(3A) accordingly has no operation.  It appears, however, that the resolution of the council under which the certificate was issued was that recommended in the officer’s report, and the report expressed the view, agreeing with the reasons expressed in a report of the county planning officer, that mineral extraction from the Finger Tip would not have constituted appropriate alternative development.  It is, I think, to be inferred that the council accepted that view, and that is part of the relevant material before me.  It is right that I should take it into account, along with other matters, in considering whether planning permission would or might have been granted in the no-scheme world.  
56.	Miss Cook relied further on the fact that, although the section 17 application had been made by Mr and Mrs Thomas’s professional advisers and legal advice had also been sought, no appeal against the certificate was made.  A reasonable inference, she said, was that Mr and Mrs Thomas did not consider that they had good prospects on appeal of securing a certificate covering the removal of the Finger Tip.  This interpretation is not accepted by the claimants, however, and in my view there is more substantial material than this on which I can reach a conclusion on the prospects of planning permission.
Planning permission in the no-scheme world
57.	The scheme, in my view, came into existence with the publication of the Supplementary Guidance in early 1992.  The no-scheme world thus spanned the period between that time and the valuation date some four years later.  Although during that period new development plans (the Mid-Glamorgan Replacement Structure Plan 1991-2006 and the Merthyr Tydfil Borough Local Plan) were being progressed, it does not seem to me that the policies and other material planning considerations affecting the prospects of planning permission for extraction from the tip varied significantly over the period.  It was not suggested by either party that the prospects of obtaining planning permission were better at any particular point during these four years.  One of the problems of that often arises in constructing the no-scheme world, that of a materially changing planning background, thus does not arise in the present case.
58.	There is no doubt, in my view, that the proposals in the SPG were founded on the expectation that the land would be brought as necessary into public ownership.  The document made proposals for a comprehensive scheme that was only achievable through acquisition by a public body.  As far as the Finger Tip was concerned, the proposal was that it should be “retained, enhanced and interpreted.”  Enhancement and interpretation almost certainly required acquisition.  In the absence of the scheme, however, the Finger Tip would have remained, and I am in no doubt that its physical appearance and historical associations would have been regarded as warranting its retention.  I note particularly the conclusions of the inspector at the CPO inquiry on the historical and topographical importance of the tip, safety and the derelict land policies.  The fact that it was unprotected by any special designation did not mean that its retention was not regarded as a significant planning objective.  There was nothing in the minerals policies, in my view, to raise a presumption in favour of its exploitation.  On the other hand MPG1 and MPG6 would, I believe, have lent support to any planning application: but by 1992 it is clear that the views of the local planning authorities so strongly favoured retention of the tip that the benefit in taking advantage of this mineral resource would have been seen as insufficient to outweigh that conservation objective.  The probability is, in my judgment, that any refusal of planning permission would have been upheld on appeal.  
59.	My conclusion, therefore, is that at no time during the period of the no-scheme world would planning permission have been forthcoming for the extraction of minerals from the tip.  I think, however, that the market would not have discounted entirely the possibility of planning permission being obtained, so that, if there had been a market for the minerals, the hope that permission might be granted would have been sufficient to give some amount of hope value to the land.  I turn, therefore, to consider the contents of the tip and the market for them.
What the tip contains
60.	There is agreement between the parties on the history of the tip.  During the period of Cyfarthfa’s peak production as an ironworks, between 1790 and 1860, when pig iron was produced, no slag was tipped on the site of the Finger Tip.  The 1876 Ordnance Survey map shows no tipping there.  Steel production started at Cyfarthfa in 1884 based on the Bessemer process, and the new facility partly replaced the original ironworks.  Six blast furnaces constructed in 1815 remain at the site.  The steelworks was closed in 1910.  Production resumed during the First World War, but all production at the site ceased in 1919.  The 1900 OS map shows a slag tip on the Finger Tip land, and the 1919 OS map shows the final limits of the tip.  It is agreed that the slag at Pontycafnau was produced from an integrated operation in which pig iron produced by the blast furnaces was fed into a steelworks.  During the steel production stage, while steel slag would normally be reprocessed, some may have been added to the tip together with blast furnace slag.  
61.	Blast furnace slag is produced from the waste product from a blast furnace producing pig iron that is then fed into a steelworks.  The slag at Pontycafnau cooled in air to form a rock-like material with a relatively low iron content.  Steel slag is produced from the conversion of pig iron into steel.  It has quite distinct properties from blast furnace slag, and may contain residual metallic iron.  When cooled in air, steel slag gives a product that resembles an igneous rock.  It is usually denser than blast furnace slag and may also be mechanically stronger and more resistant to abrasion.  A steel slag will have a relatively high iron content and it is therefore usually reprocessed to recover the iron by feeding it back into a blast furnace.
62.	The presence of what is considered to be steel slag in the tip probably reflects an inability to reprocess the material after the closure of the steelworks in 1910.  Apart from the steel slag present on the surface of the tip, it is possible, therefore, that no significant volume of steel slag lies buried within the blast furnace slag.  In consequence of this, Professor Buchanan attributed only 5% of the total tonnage of the tip to what he classified as steel slag and pig iron.
Access
63.	The parties respective highway engineers agreed that between the completion of the A470 Stage 5 and the commencement of the Merthyr Western Relief Road a 3m wide track on the western side of the Thorn land would in engineering terms have been suitable as a temporary haul route, subject to certain works being undertaken.  Mr Boaden thought that such an access would not have been viewed kindly on a planning application.  Once the new roundabout giving access to the Thorn land had been constructed as part of the Western Relief Road, it is unlikely, in my view, that any access other than that would have been permitted.  The notional purchaser of the Finger Tip would thus have realised that he would only be likely to be able to transport material away from the tip before the Thorn land was developed, and that he would have to pay a ransom value in order to do so.  If, on the other hand, it had been proposed that the material should be used in the construction of the A470, it seems to me likely that some acceptable access would have been devised.
Volume and density estimates
64.	Professor Buchanan and Mr Riley agreed to use the cross sections of the tip in Dr A E Cobb’s report of May 1995 for the purpose of estimating the volume of the tip.  On this basis Mr Riley calculated a volume of 200,000 m3 compared to the 180,000m2 that he had used in his original report of March 2002.  Professor Buchanan had not himself carried out a calculation of the volume, but he relied on the figure of 224,000m3 determined by Dr Cobb.  There is agreement that all the slag could be totally removed from the site.  Professor Buchanan and Mr Riley agreed that, owing to the heterogeneity of the slag, it would have a range of densities.  Dr Cobb in his report gave a range of 1.6 to 2.8 tonnes per m3.  Mr Riley accepted Dr Cobb’s overall estimate of 2.2 tonnes per m3, and Professor Buchanan also used this figure, although his valuation incorporated a sensitivity in the range of 2.0 to 2.4.
65.	On the basis of these figures, Professor Buchanan assumed that 492,800 tonnes would be available for excavation, and Mr Riley’s figure was 440,000.  The difference between them is thus relatively small.  Mr Harper submitted that I should take the figure of 492,800m3, which came from Dr Cobb’s careful evaluation in 1995, rather than Mr Riley’s figure.  He suggested that Mr Riley’s original volume of 180,000m3 was simply a negotiating stance, from which he had been prepared to move to an intermediate position.  Mr Riley said in cross-examination that the difference between the volume figures probably derived form the reproduction of Dr Cobb’s cross-sections.  There were errors in reproducing the original cross-sections that had led to his earlier figure.  In the light of this evidence, in my judgment the figure of 492,800m3 is to be preferred since it was derived from the measurements made by the expert who had been responsible for the original production of the cross-sections from which the volume fell to be calculated. 
Cost estimates
66.	Professor Buchanan and Mr Riley had identified where the differences between their cost estimates lay.  Professor Buchanan had allowed nothing for pre-production evaluation of the material.  Mr Riley allowed £45,000 for site investigation, £10,000 for planning costs and £10,000 for an environmental impact assessment.  Professor Buchanan did not consider that there was any need for further site investigation in view of the extensive investigation that there had already been.  The allowance of 20p per tonne for quality control testing, which both experts had made in their estimates of operating costs, would, he said, be sufficient.  His valuation had contained £30,000 to cover the planning costs of post-excavation development of the site, but as such development was no longer being pursued, this amount was available for attribution to pre-production costs.  
67.	Two items of capital expenditure were in dispute.  There was a small difference (Professor Buchanan £30,000, Mr Riley £40,000) in relation to the cost of a weigh bridge.  More significantly, Mr Riley had allowed £125,000 for rock bolting, which he considered to be necessary to guard against material falling into the river during excavation.  He said in cross-examination that it would not be necessary if the internal composition of the tip was known, but he thought that it would be needed to alleviate people’s concerns.  Professor Buchanan said that there was no need for rock bolting.  A competent operator would excavate leaving a lip on the river side, and he would reduce this as he came down.  There would be some spalling of the face into the river, but netting could be pegged along the lower slopes to minimise the possibility.  He thought something less than £10,000 should be allowed for this.
68.	As far as operating costs were concerned, Professor Buchanan allowed £1.19 per tonne for excavation, processing and management costs, and Mr Riley allowed £1.24, excluding management costs.  Each allowed 20p per tonne for quality control testing.  Mr Riley allowed £10,000 for environmental monitoring, but Professor Buchanan allowed nothing for this.  The major difference between them lay in the fact that Mr Riley allowed for the secondary breaking of 30% of the material at £2.40 per tonne.  As recorded in the agreed statement, Professor Buchanan considered that ripping and the provision of a primary crusher would be adequate, given that secondary hydraulic was not expensive, but he accepted that this could cause delay in the production process, which would have cost implications.  
69.	Professor Buchanan and Mr Riley agreed that £27,500 should be allowed for rehabilitation costs.  In addition there would be the cost of providing a haul route to the highway.  I consider elsewhere the feasibility of such an access.  The costs of two alternatives are the subject of agreement between the parties.  A temporary access across the Thorn site from the roundabout constructed as part of the Merthyr Western Relief Road would have cost £112,000 plus £30,000 for a temporary sheet pile wall that would have been needed to protect a pylon.  Alternatively, an access that included use of the track on the western side of the Thorn site instead of an access from the roundabout across the Thorn site would have cost £165,000.  On the basis of these two alternatives an access would have cost either £142,000 or £165,000.
70.	The result of these figures (and assuming the lower access cost) is that Professor Buchanan would allow for costs totalling £924,492 (or £1.88 per tonne) and Mr Riley would allow £1,473,948 (or £2.99 per tonne).  Of the difference £0.72 is due to secondary breaking, £0.23 to rock bolting rather than netting, and £0.16 to other matters.  In my judgment, a prospective purchaser of land, properly advised, would have taken the view that the method of excavation described by Professor Buchanan would be feasible and acceptable to the authorities, so that rock bolting would not be required.  On the other hand, he would have been concerned that some further treatment of the slag after primary crushing might have been required to make the product fit for the purchaser’s requirement.  I think that he would probably have based his assessment on an overall cost of between £2.00 and £2.50 per tonne. 
Value of the minerals
71.	Professor Buchanan assessed the value of the product of the excavations on the basis that 95% of it would be blast furnace slag and 5% steel slag (comprising pig iron and glass in a proportion of approximately 2:3).  75% of the blast furnace slag was allocated to granular unbound sub-base and 20% to general fill.  On the basis of written responses from two civil contracting firms and a dealer in iron and non-ferrous metals to letters from the executors’ solicitors, Professor Buchanan took prices of £5.50 per tonne for granular sub-base, £2.00 per tonne for general fill, £4 per tonne for pig iron and £10 per tonne for glass.  One firm, Miller Mining of Normanton, West Yorkshire, had expressed interest in its letter of September 1998 in purchasing all four grades of material, but Professor Buchanan did not know what information they had been given or what, if any, investigations they had carried out.  He assumed that in making their offer they had in mind the construction of local roads.
72.	Mr Riley had assumed a range of £2.40 to £3.80 per tonne for all the material in the tip.  He said that £2.40 represented a value for sub-base fill, while the £3.80 was the price of local quarry stone.  The £3.80 was the price ex-quarry, and to this would have to be added a loading charge of £1.29 and transport costs of 9p per mile.  An agreed statement, having recorded this, went on:
“The cost therefore of transporting material from, say, Penderyn to the A470 Trunk Road adjoining the Finger Tip (a distance of seven miles) would add 63p + £1.29 = £1.92 onto the cost ex-quarry.  The cost to deliver one tonne of, say, sub-base onto site would (based on IG’s ex-quarry price of £3.80) therefore be £5.72/tonne.  If material was being transported from Vaynor (two miles away) the equivalent cost would be £5.27/tonne.”
73.	The prices referred to by Professor Buchanan assumed that there was a market for the product for local road building.  His prices were based on letters solicited from contractors.  The requests put to these contractors were not revealed, and the terms of the responses were surprising.  Thus Miller Mining wrote in a letter headed “Subject to Contract” on 8 September 1998:
“The Fingertip, Pontycafnau, Merthyr Tydfil.  
Further to our investigations, I write to confirm our interest in purchasing material contained at the above.  Our investigations show that there is approximately 500,000 tonne of material on site comprising blast furnace slag and steel slag.  We would wish to process the materials on site ourselves, and would expect to complete the operation in approximately 15 (fifteen months).”
The letter then set out “our offer for the material” at specified prices.
74.	What is surprising about this letter is that there is nothing to suggest that Miller Mining had in mind any particular road building project when they sent this “offer”.  The date was September 1998, 2½ years after the valuation.  I would, in the light of these matters, have attached very little weight to what was said in that letter, or the other ones on which Professor Buchanan based his evidence on value.  That it would have been wrong to have attached weight to them is abundantly clear from a witness statement submitted by the acquiring authority.  The statement is that of James T Poyner, a director of Miller Mining.  It is dated 31 May 2002.  Mr Harper said that he did not wish to cross-examine Mr Poyner.  In his statement Mr Poyner refers to the letter and says that he has not been able to ascertain what, if any, project the material in question was being considered for.  He says that the rates quoted appear to be on the high side, but that it is not uncommon to offer a high price initially in order to dispose of other competition before negotiations commence.  The true value of material can only be established after thorough negotiations and exhaustive testing, or, more practically, the actual working of the reserve.  He says that invariably the process results in the erosion of the value of the initial offer, sometimes by a considerable amount; and on occasions the process reveals that the materials may not be workable or are of little value.
75.	In the light of this evidence I attach no significance to the offers other than as ceiling values.  On the other hand there is agreement that quarry stone for sub-base delivered to the A470 adjacent to the Finger Tip would have cost £5.72 from Penderyn and £5.27 from Vaynor.  There is no doubt about the availability of quarry stone at the valuation date, and at Blaencanaid permission had been granted for the extraction of 200,000 tonnes on 6 July 1995 and 100,000 tonnes on 25 March 1996.  Mr Riley said, and I accept his evidence, that the market perception of the relative quality of quarried stone and blast furnace slag would have led to a preference for the use of local stone, the quality of which was well-established.  The result, in my judgment, is that, if there had been at the valuation date a local demand for the product of the tip, the price achieved would have had to reflect a substantial allowance for the market’s preference for quarry stone of known characteristics.  Knowing this, the notional purchaser of the subject land would have regarded his purchase as speculative.  I conclude that he would have paid no more than £4 to £4.50 for the product as sub-base.  Taking a mid-price of £4.25, and adopting Professor Buchanan’s prices and quantities for bulk fill, pig iron and glass, which were not the subject of disagreement, the value of the minerals would be as follows:
369,600 tonnes at	£4.25 	per tonne	1,570,800	
98,560 tonnes at 	£2.00 	per tonne	197,120	
9,856 tonnes at 	£4.00 	per tonne	39,424	
14,784 tonnes at 	£10.00	per tonne	  147,840	
	Total	£1,955,184	

The cost of extraction and processing I have found to be between £2 and £2.50 per tonne, or between £985,600 and £1,232,000. Taking the mid-point of £1,108,800 and subtracting this from the total value leaves a net value of £846,384.  This is the value that the tip would have had if there had been a market for the material adjacent to the subject land.
The market
76.	The claimants’ case, as Mr Harper put it, was that in a no-scheme world mineral from the tip would have been at the very least a serious competitor for fill and/or for base material for one or other of the roads schemes in the vicinity that were under way during the early to mid 1990s.  The acquiring authority said that there was no market for the slag at the valuation date and that, by then, any hope value that the land might earlier have possessed had disappeared. 
77.	Mr Riley gave details of the road works being carried out in the vicinity of the subject land around the time of the acquisition.  Stage 5 of the A470 (Pentrebach to Cefn Coed) trunk road was constructed under three contracts.  The first was for the stabilisation of mine workings.  Contract 2 was for the Swansea Road to Cefn Coed section.  The contractors were Christiani and Nielsen Ltd with Walters UK Ltd as earthworks subcontractor.  The commencement date was 14 November 1994 and the completion date was 17 July 1997.  The earthworks schedule showed a net requirement for 12,000 m3 of imported fill and for 39,000 m3 of Class 6F capping material.  The vast majority of the requirement for embankment fill was to be met by the re-use of material excavated during the formation of cuttings elsewhere on the alignment.  In practice much of the requirement for imported material was met from the nearby Swansea Road widening project.  During construction the need for 25,000 m3 of type 1A fill material was identified, and this was supplied from two quarries at Vaynor.  Contract 3 of the A470 works was for the Pentrebach to Swansea Road section.  The contractor was Taylor Woodrow Civil Engineering Ltd.  The commencement date was 5 June 1995 and the completion date was 8 November 1996.  There was a requirement for a large volume of imported stone, and the contractor re-opened a disused sandstone quarry, Blaencanaid Quarry, high on the western slope of the Taff valley.  On 6 March 1995 they submitted a planning application for the extraction of 200,000 m3 of sandstone.  Permission was granted on 6 July 1995, and on 25 March 1996 permission to extract a further 100,000 m3 was given.
78.	The Swansea Road Advance Earthworks for the Merthyr Tydfil Western Relief Road were carried out by Walters UK Ltd between 6 February 1994 and 17 July 1994.  Large amounts of material were generated for disposal off-site, and stage 5 of the A470 took much of this.  There was no net requirement for fill.  The Western Relief Road itself was constructed by Christiani and Nielsen Ltd between 6 January 1997 and 12 February 1999.  At the valuation date the inquiry into the CPO and Side Road Order had not taken place.  It was essentially a road widening scheme, and no large quantities of imported fill were required.
79.	The third road was the A4060 Pentrebach to Dowlais Top.  For Phase 2, Pentrebach to Mountain Hare, the contractor was Cementation Ltd, and the contract was carried out between 4 February 1991 and 4 February 1992.  Phase 3, Mountain Hare to Dowlais Top, was constructed by Alun Griffiths (Contractors) Ltd between 19 January 1998 and 17 October 1998.  Phase 2 had a relatively small requirement for fill and created a large surplus to be disposed of off-site.  There is no evidence about the material required for Phase 3, which was the most distant part of the project from the subject land, and there was no specific suggestion on the part of Professor Buchanan that it would have provided a market for material from the tip. 
80.	It is evident, therefore, that the only scheme among those identified that on the evidence might have constituted a potential market for the slag was the contract 3, Pentrebach to Swansea Road section, of the A470 works.  It was indeed for this scheme that in their letter of 28 august 1992 applying for a section 17 certificate Mr and Mrs Thomas’s agents said that it was intended to remove part of the Finger Tip.  The amount of imported stone required for the contract appears to have been of the same order as the volume of the material in the tip.  On 22 February 1995 Christiani and Nielsen Ltd wrote to Mr Thomas expressing interest in the slag.  In a letter headed “A470 Pentrebach to Cefn Coed – Contract 2 – ‘Finger Tip’ Slag Material”, they said:
“We write to express our interest in the slag material from the tip known as the ‘Finger Tip’ as a source of imported fill material, if we are successful in our tender to construct Stage 3 of the A470 Trunk Road from Pentrebach to Cefn Coed.
Any agreement with you on the use of the tip would be subject to the necessary planning permission for mineral extraction together with approval of the material by the Resident Engineer.”
81.	Three things are to be noted about this letter.  Firstly, the offer was conditional on Christiani and Neilsen being successful in their bid for the works.  They were not successful, and there is no suggestion that the successful bidders, Taylor Woodrow, were ever interested in the tip material or that they would have been interested had it not been for the scheme.  Secondly, and unsurprisingly, the offer was subject to planning permission being obtained; and, thirdly, it was subject to the approval of the material by the Resident Engineer, thus showing that in the minds of these contractors there was a lack of certainty about the suitability of the material for the purpose.
82.	The evidence, in my judgment, establishes the probability that, for a time, the tip had some hope value because of the possibility that the material might be suitable for use in the Pentrebach to Swansea Road section of the A470 works.  In the no-scheme world that hope value would no doubt have been rather greater than in the scheme world because the prospects of achieving planning permission would have been less slender.  However, that hope value disappeared, not because of the scheme, but because the contract was awarded to a contractor who had no interest in purchasing the material.  There is nothing to suggest that, by the valuation date, there was any hope value left.  At that stage there was no planned project of road construction that might have provided a market for the tip material, and there was nothing to suggest that such a market might emerge.  A potential purchaser of the land would have realised that buying the tip would have been a pure speculation that a market might emerge and that there was nothing to suggest that it would.  Moreover he would also have realised that it was unlikely that access could be provided to permit removal of the material.  In view also of the potential of the tip to give rise to safety concerns, in terms of public access to the steep face and the possibility of blocks of slag becoming detached and falling into the river, a purchaser would not, in my judgment, have been prepared to pay anything for the land.  That was the view that Mr Williams expressed, and I accept it.
Conclusions
83.	I have concluded that at no time during the period from the publication of the Cyfarthfa Supplementary Guidance in early 1992 and the valuation date (29 March 1996) would planning permission have been granted for the extraction of material from the Finger Tip.  That is my conclusion, on the balance of probabilities, on the planning status of the land.  However I also find that the market would have considered that there was a sufficient possibility that permission would be granted to support a hope value for the land in the event that there was a market for the minerals.  I am satisfied on the evidence that there was a potential market for the purposes of contract 3 of the A470 works, but that potential was lost when, some time before construction started in June 1995, the contract was awarded to Taylor Woodrow , who had no intention of using the tip material.  After that time there was no prospect of a market for the slag emerging.  On the basis of these findings the compensation to which the claimants are entitled could only include a positive amount in respect of the Finger Tip if Mr Harper is right in his contention that the fact that the market had slipped away by the valuation date should be disregarded.
84.	The basis of Mr Harper’s submission is that, under section 9 of the 1961 Act and in the light of the decision in Melwood Units Pty, any diminution in value due to the scheme is to be disregarded, so that if the market fell during between the inception of the scheme and the valuation date, this fall must be left out of account.  I cannot accept the way that Mr Harper puts it.  The claimants’ interest must be valued rebus sic stantibus as at the valuation date: Penny v Penny (1868) LR 5 Eq 277, as explained by Lord Morris of Borth-y-Gest in West Midland Baptist (Trust) Association (Incorporated) v Birmingham Corpn [1970] AC 874 at 906E-907H.  The physical state of the land must be taken as at that date.  Similarly the market that gives it its value must be taken at that date, except that there must be disregarded any decline in the market value brought about by the blighting effect of the proposal to acquire the land (section 9 of the 1961 Act).  The fact that the market has fallen for reasons unconnected with the scheme between the inception of the scheme, or the making of the CPO, and the date of entry or vesting (the valuation date) does not matter.  A claimant is not entitled on that account to more than the value of the land at the valuation date, any more than he would be entitled to something less than its value at that date if the market had risen.  The value of land is liable to change with time.  That is why valuation has to be at a particular date.
85.	At the valuation date the land still contained the minerals that would have given it value if there had been a market for them.  By that stage, the opportunity of exploiting them had gone, and, as I have found, Block 3 was then valueless.  There had been a potential market for the slag up to a year or so earlier and, if planning permission had been obtained, I have found it probable that the slag would have been extracted profitably and the land would have had a substantial value on that account.  The existence of a potential market and the possibility of planning permission thus gave hope value to the land.  That hope value was lost, however, not because of the acquisition or the scheme but because, quite independently of the scheme, the potential market disappeared. 
86.	At the valuation date, therefore, the land had not been depreciated in value by reason of the proposed acquisition, and thus section 9 would have no application.  The land was valueless notwithstanding that it still contained the slag.  I would add that, if, in the no-scheme world, extraction would have taken place between the inception of the scheme and the valuation date, the land would equally have been valueless.  Any claim in respect of a loss arising from the lost opportunity of earlier exploitation, in my view, would have to have been based on rule (6) of section 5 of the 1961 Act, as a matter “not directly based on the value of land.”  It would be a claim for loss of profits.  Since the loss would have been one that would already have been suffered at the valuation date, it would have been recoverable, but only if the requirements identified in Shun Fung were satisfied.
87.	On the question of access to Block 2 I have concluded that a ransom payment of 50% would have had to be paid to the owner of the Thorn land; and I have concluded that Block 3, the Finger Tip, was valueless.  The compensation payable, therefore, is that set out in Mr Williams’s valuation, £282,000.
88.	This determination will take effect as a decision when the question of costs has been decided and at that point, but not before, the right of appeal will come into operation.  The parties are invited to make submissions as to the costs of this reference and a letter accompanying this decision sets out the procedure for submissions in writing.
Dated 22 November 2002

							George Bartlett QC, President

Addendum on Costs
89.	Written submissions on costs revealed a factual dispute between the parties – whether or not an offer relied on by the acquiring authority had in fact been delivered to the claimants – and I therefore held a hearing on costs on 25 February 2003.  The claimants asked for their costs and said that there was no ground for refusing them.  The authority said that an offer – of £350,000 exclusive of costs and statutory interest – had been delivered to the claimants’ solicitors on 16 June 2002 (the day before the start of the hearing) and had been lodged as a sealed offer with the Tribunal on 17 June 2002 and that, as this exceeded the amount that I determined to be payable (£282,000), the authority should have their costs from the date of the offer.  They also said that the claim was exaggerated and that no order should be made in respect of the claimants’ costs in relation to the mineral, planning and highway evidence up to the date of the sealed offer. 
90.	Evidence about the making of an offer was given by Christopher Cowburn, called by Miss Cook for the authority, and by Jonathan James Morien Arter, called by Mr Harper for the claimants.  Mr Cowburn said that he had been employed as Head of Estates for the authority from 1 April 1996 to 8 July 2002.  His post at the council required him to undertake work which was predominantly related to the acquisition, management and disposal of the council’s land and property portfolio.  As part of that role he was required to ensure that compensation payments were made where land had been compulsorily acquired.  He had had conduct of the matter relating to the estate of the late Mr Thomas and the land at Pontycafnau since April 1996.
91.	Mr Cowburn said that prior to the Lands Tribunal hearing he had been responsible for instructing, supervising and coordinating the council’s appointed advisers who were attempting to agree the compensation payment due.  During the months immediately before the hearing this involved him corresponding with Mr Arter, of Charles, Crookes and Jones, who was instructed on behalf of the claimants.  It was agreed that Mr Arter would prepare the trial bundle, and the arrangement was that this would be handed over on the Friday before the case was due to start.  Mr Arter, however, had been unable to make a meeting on that day, and he and Mr Cowburn agreed in a telephone conversation on the afternoon of Friday 14 June 2002 that Mr Arter should deliver the bundle of documents to Mr Cowburn’s home on the afternoon of the following Sunday. 
92.	On the Friday evening, Mr Cowburn said, he prepared the letter at home.  The letter was addressed to Mr Arter at Charles, Crookes & Jones and was dated 14 June 2002.  It was in these terms:
“In an attempt to settle the above claim without this matter passing to court I am able to put forward an offer in the sum of £350,000 exclusive of costs, and statutory interest.  Costs are to be agreed, or in the absence of such agreement to be taxed by the court.  A copy of this letter will be passed to the Lands Tribunal in a sealed envelope with instructions that it shall only be opened upon completion of the case and shall be material as to all costs incurred after the date of this letter.”
93.	Mr Cowburn said that on the Sunday 16 June 2002 Mr Arter arrived at his house at about 3pm and they sat down together in the dining room and ran through the documents that Mr Arter had brought.  During the course of the preceding Friday Mr Cowburn had prepared two letters, each of which dealt with matters that had been agreed between the witnesses on either side.  He produced these and Mr Arter signed each of them as confirmation of the agreement.  He also handed to Mr Arter the letter containing the offer that he had prepared on the Friday evening.  Immediately before the hearing began on the morning of 17 June 2002 he gave the sealed offer to one of the Lands Tribunal staff at the Tribunal.  Mr Cowburn said that he understood the importance of a sealed offer perhaps about a month before the hearing, having himself carried out some reading and having had discussions with the Council’s legal officers.  He said that no offer had been made before 14 June because negotiations were still proceeding and he did not think it appropriate that an offer should be made until they had been concluded.  Furthermore he needed the approval of the Welsh Development Agency.  
93.	Mr Arter said that he was partner in the firm of Charles, Crookes & Jones and that he had the conduct of the proceedings on behalf of the claimant.  The first time that he was aware that a sealed offer had been lodged with the Tribunal was when he read the authority’s submissions on costs.  Prior to the hearing he had agreed that he would do the preparation of the bundles for the hearing, and an exchange of correspondence on 11 and 13 June 2002 set out the arrangement between him and the council.  His purpose in calling at Mr Cowburn’s home on 16 June 2002 was to deliver to him the bundle that had been prepared for the council.  There had been a meeting on 12 June between the solicitors, and witnesses also had been present, including Mr Muray and Mr Thurlow.  At that meeting the figure of £350,000 had been, as Mr Arter put it, floated as a figure on the basis of which an offer might be made.  On Friday 14 June Mr Arter said that he spoke to Mr Cowburn three times on the telephone and made the arrangement to go and see him on the Sunday. 
94.	Mr Arter said that he called to see Mr Cowburn at his home in Usk at about 3pm on the Sunday while on his way to his London hotel where he was going to stay for the duration of the hearing.  He produced a file note that he said he had completed on arrival at his hotel in London and that stated that the meeting had taken 30 minutes.  It also said, “2 letters in,” which indicated, Mr Arter said, that he had received at the meeting two letters.  Those letters, he said, both dated 14 June 2002, were the ones that he had signed, indicating his agreement to matters that had been agreed between the witnesses.  He was not handed a copy of the offer letters.  Had Mr Cowburn given him a letter with an offer, he said, it would certainly have made an impression on him.  Mr Harper had asked him in conference at 9.30 am on the morning of 17 June whether any offer had been made, and he had replied that none had been received.  It was an issue that was, he said, foremost in their minds and indeed it was a matter of some considerable surprise to them that no offer had been made by the council.  He said that he made enquiries of Mr Otubanjo of the Lands Tribunal on the morning of 17 June at approximately 10.25 am and was advised that no sealed offer had been received.  
95.	Faced with this conflict of recollection of Mr Cowburn on the one hand and Mr Arter on the other, I find, having heard the witnesses and considered the documentation, that the offer letter was not handed to Mr Arter.  I have no doubt that Mr Cowburn, when he thought about it afterwards, assumed that he had given Mr Arter the offer letter as well as the other two letters that Mr Arter had signed, but I think that, inadvertently, he had failed to do so in the course of a meeting that lasted for half an hour and was concerned with other matters.  It seems to me inherently unlikely that anyone in Mr Arter’s position, having been handed the letter, would decide that he was going to deny that he had received it.  The purpose of the letter was to enable reliance to be placed on the offer when the question of costs arose in public proceedings in the Tribunal.  A copy of the letter was to be lodged with the Tribunal.  To deny having received the letter could only invite the accusation of deceit and the risk that the accusation might succeed.  Mr Arter’s note, and its brief reference to two, and not to three, letters, is good evidence, in my judgment, that the offer letter was not handed to him, and I accept Mr Arter’s statement that it was not. 
96.	There is thus no reason to deny the claimants an award of costs in their favour on the ground that a sealed offer had been made and its amount not exceeded.  This leaves the assertion that the claim was exaggerated.  On this Miss Cook raises a number of points.  Firstly, she relies on the fact that the amount determined by the Tribunal was the amount contended for by the authority (£282,000), while the claimant sought an award of at least £2,126,000.  It would not be just, she says, to make the authority pay the claimants’ costs when they had so substantially failed.  The answer to this contention, in my judgment, is that section 4 of the Land Compensation Act 1961 provides a mechanism by means of which an acquiring authority can protect themselves against their liability for a claimant’s costs.  If they do not make an offer they have no one to blame but themselves if an award of costs is made against them.  The mere fact that an award is well below the amount claimed and at or near to the authority’s valuation will not assist them.  
97.	The proper approach in relation to costs where a claimant has been awarded more than the authority has offered is to treat the claimant as entitled to his costs unless there is some “special reason” to the contrary: see Purfleet Farms Ltd v Secretary of State for Transport, Local Government and the Regions [2002] RVR 368, per Potter LJ at para 29.  The same would clearly apply where no offer at all has been made.  Having stated this to be the propoer approach, Potter LJ went on:
“Whether such special reason exists in any given case in a matter for the judgment of the Lands Tribunal.  Plainly it may exist where wasted or unnecessary costs have been incurred for procedural reasons as a result of the conduct of the claimant (e.g. abandoned issues, unnecessary adjournments, or failure to comply with directions of the Tribunal).  However, so far as the nature and substance of the case advanced by the claimant is concerned, special reasons should only be regarded as established where the Tribunal considers that an item of costs incurred or an issue raised was such that it could not on any sensible basis be regarded as part of the reasonable and  necessary expenses of determining the amount of the disputed compensation.  This would apply not only to a claim advanced without any statutory basis but to other examples of manifestly unreasonable conduct which may give rise to unnecessary expense in the course of the proceedings.  It means, in my view, that, following the hearing of a compensation reference in the Lands Tribunal in which the claimant has been successful, a special reason for departing from the usual order for costs should only be found to exist in circumstances where the Tribunal can readily identify a situation in which the claimant’s conduct of, or in relation to, the proceedings has led to an obvious and substantial escalation in the costs over and above those costs which it was reasonable for the claimant to incur in vindication of his right to compensation.”
98.	Potter LJ went on to say (at para 36), in relation to the question of an exaggerated claim:
“… 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 on 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.”
99.	Chadwick LJ (at para 43) put it similarly.  He said:
“Where the Tribunal makes an award of compensation which is well below the amount claimed, it is appropriate for it 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.”
100.	Miss Cook points out that there was an element of the claimants’ case that had been abandoned.  This was the contention that planning permission would have been granted for residential development.  In the claim of £3,500,000 that Mr Murray had put before the council in June 2001, £1,400,000 was attributable to the value of the land for such residential development.  In the event, the reliance on residential development was abandoned in the week before the hearing.  Abandoned issues were one of the matters referred to by Potter LJ as constituting a special reason because of costs being wasted, and, in my judgment the abandonment of the residential development part of the claim constitutes a special reason for not awarding the claimants such of their costs as were attributable to it.  (Miss Cook does not contend that the claimants should pay the authority’s costs in relation to this element of the claim.)
101.	Miss Cook goes on to argue that the claimants’ mineral value claim had no real chance of success and that on that account the authority should not have to pay their costs.  Of the elements of the mineral value claim – planning, value of the minerals and the market – it was, says Miss Cook, the unreliability of the claimants’ evidence relating to the market that meant that the claim had no real chance of success.  She places particular reliance on my statement in para 81 that there was no suggestion that Taylor Woodrow, the successful bidders for the Pentrebach to Swansea Road section of the A470 works, were ever interested in the tip material or that they would have been interested had it not been for the scheme.  Mr Harper says in response to this that the reason Taylor Woodrow had to use quarried stone for fill was because of the council’s attitude to the Finger Tip.  The market had already been denied to the claimants by the scheme.  
102.	I cannot accept Mr Harper’s response.  There was no evidence before me to show that Taylor Woodrow in fact decided to use quarried stone as fill because of the council’s attitude to the exploitation of the Finger Tip.  I accepted the evidence of Mr Riley that the market would have shown a preference for quarried stone because of its known characteristics.  Christiani and Nielsen had expressed a qualified interest in the tip material, but Taylor Woodrow had evinced no such interest.  There was thus no justification for drawing the inference that Taylor Woodrow had chosen to use quarried stone because of the council’s scheme rather than because they regarded it as preferable in view of its known characteristics.
103.	Having said this, I accept Mr Harper’s submission that the case was a difficult one on the facts.  Certainly in relation to the market the facts were not satisfactorily established until the hearing itself.  Given that the evidence did establish that for a time the tip had a hope value, it does not seem to me to have been unreasonable for the claimants to seek to establish that there had not simply been a possibility that the material would be sold but that there was a probability that it would have been.  In the event, the evidence did not establish such a probability, but the pursuit of this issue was legitimate, and I do not think that it would be right to say that it had no real chance of success.
104.	There is thus, in my judgment, no reason to deny the claimants their costs related to the minerals claim.  The authority must pay the claimants’ their costs of the reference except for such costs as are referable to the claim in respect of residential development.  Such costs, if not agreed, are to be the subject of a detailed assessment by the Registrar on the standard basis.

Dated 26 February 2003

					George Bartlett QC, President

APPENDIX 1

	VALUATION OF KEITH MURRAY FRICS

Assuming that the Estate had an un-fettered right of access across the Thorn land in consequence of an agreement reached with Merthyr Tydfil County Borough Council at the Western Relief Road public inquiry.

Block 1
				
As agreed with DV			£1,565	

Block 2 – Upper Plateau				

Land value (as agreed with DV)		
£910,750		
Less				
Remediation costs (as agreed)		(£265,000)		
		645,750		
Deferred 1 year @ 15%
		0.867	£559,865	
Block 3				

Mineral value		
£1,700,000		
Less cost of haul road on the assumption that the A470(T) accommodation works had provided for the proper reinstatement of the previous haul road operated under the WDA Agreement 
i)	Provision of traffic lights to Swansea Road
ii)	Provision of temporary haul road across the 
Upper Plateau from the termination point of the WDA Agreement haul road to the Fingertip
iii)	Provision for protective works to electricity 	pylon	

£6,000
£102,000

£30,000	

(£138,000)
		
		1,562,000		
Less				
Royalty payments to the WDA under their
Agreement for haulage rights
224,000 cu m to be removed
Say 22,400 lorries @ 10p per lorry		

(£2,240)	

£1,559,760	

Reversion to open space
				
11.95 acres @ £500 per acre
Deferred 2 years @ 15%
		£5,975
0.756	
£4,517	
Blocks 4 & 5				

As agreed with DV			£535	
			£2,126,242	
Valuation as at 29 March 1996 say	£2,126,250	

APPENDIX 2

	ALTERNATIVE VALUATION OF KEITH MURRAY FRICS

Assuming that the Estate had an un-fettered right of access across the Thorn land in consequence of an agreement reached with Merthyr Tydfil County Borough Council at the Western Relief Road public inquiry.

Block 1
				
As agreed with DV			£1,565	

Block 2 – Upper Plateau				

Land value (as agreed with DV)		
£910,750		
Less				
Remediation costs (as agreed)		(£265,000)		
		645,750		
Deferred 1 year @ 15%
		0.867	£559,865	
Block 3				

Mineral value		
£1,700,000		
Less cost of haul road on the assumption that the A470(T) accommodation works had provided for the proper reinstatement of the previous haul road operated under the WDA Agreement 
i)	Provision of traffic lights to Swansea Road
ii)	Provision of temporary haul road across the 
Upper Plateau from the termination point of the WDA Agreement haul road to the Fingertip
iii)	Provision for protective works to electricity 	pylon	

£6,000
£102,000

£30,000	

(£138,000)

£1,562,000	
				
Reversion to open space
				
11.95 acres @ £500 per acre
Deferred 2 years @ 15%
		£5,975
0.756	
£4,517	
Blocks 4 & 5				

As agreed with DV			
£535	
			£2,128,482	
Valuation as at 29 March 1996 say	£2,128,500	

APPENDIX 3

VALUATION OF M J WILLIAMS FRICS

Block 1	3.13 acres @ £500 per acre			£1,565	Agreed	
					
Block 2	Gross Area 5.38 acres
Developable area 4.69 acres				
	
A	3.6 acres at £200,000 per acre
B.1	1.09 acres at £175,000 per acre	£190,750
OR
B.2	1.09 acres less 0.14 acres 	£190,000
	for stability strip at top of 
	retaining wall 0.95 acres 
	at £200,000 per acre		£720,000

	£190,750

	£910,750	
		
	Less	costs of site preparation		£265,000			
			£645,750			
	Deferred 1 year at 15%		£    0.867			
			£559,865		Agreed	
	Less	cost of obtaining rights of 
access for development.  50% 
of development value £559.865	

	£279,933	

	£279,932	

Unagreed
	
Block 3	11.95 acres			Nil	Unagreed	
					
Block 4&5	1.07 acres at £500 per acre			£      535	Agreed	
		TOTAL		£ 282,032		

Value £282,000 (two hundred and eighty two thousand pounds)