Inner House rules former owners of land acquired to build Aberdeen bypass entitled to compensation

The former landowner, Scotland’s Rural College (SRUC), sought compensation after the land was acquired using compulsory purchase powers. It submitted that, if the bypass had not been built, the estate would have been allocated for housing development.

The appeal was heard by the Lord Justice Clerk, Lady Dorrian, sitting with Lord Woolman and Lord Doherty. The appellants were represented by Wilson QC and van der Westhuizen, advocate, and the respondent by Burnet QC.

Included in permission

The parcel of land was located on the Craibstone Estate to the northwest of Aberdeen, where the respondent operated a campus. Following a review in 2004, it was recommended that it dispose of surplus land it owned there, which led the respondent to enter into an option agreement with CALA Management Ltd to develop part of the site for housing.

The appellants eventually took title to 16% of the site, amounting to 32.9 hectares of land, in January 2013. SRUC claimed that a housing development on that land, which was within an area identified by local authority development plans, could have been worth up to £22.8 million. It advanced three heads of claim: development value of that amount, or alternatively hope value of £925,000, injurious affectation of its remaining land of £500,000, and disturbance of £75,000.

The position of the appellants was that in the absence of the bypass the site would not have been allocated for housing development or received planning permission. In the Lands Tribunal proceedings, it was determined that the acquired land would have been included in planning permission for a housing development, noting the advantages of the site including its transport connections and the possibility of a defensible greenbelt boundary.

The Tribunal’s findings were challenged by the appellants, who argued it was irrational and illogical to hold that the acquired land would have been allocated for development, including housing development, in the absence of the bypass. Further, it had failed to discharge its duty under section 110(4) of the Roads (Scotland) Act 1984 in assessing the compensation payable in respect of the land, and failed to have regard to all the relevant documents and case law.

Dispute with the findings

The opinion of the court was delivered by Lord Woolman. Addressing the appellants’ early submissions, he said: “In our view the Scottish Ministers are attempting to convert a dispute with the findings of fact into errors in law. In effect they are seeking a rehearing. That’s clear from a list of their contentions.”

Evaluating the general approach of the Tribunal, he added: “On a fair reading of the judgment the tribunal undertook a thorough evaluation of the evidence. It did not ignore documents. Questions of weight were pre-eminently matters for it to assess using its experience and expertise. We would also point out that planning policy documents are often drawn in wide (and sometimes aspirational) terms.”

Turning to the appellants’ criticisms of the Tribunal’s fact-finding process, he said: “The second ground is essentially a reformulation of the first. The Scottish Ministers contend that the tribunal made fundamental errors in reaching its findings. We reject that submission for the same reasons that we reject the first ground.”

On whether the Tribunal’s decision could be characterised as irrational, Lord Woolman said: “We arrive at the opposite conclusion. In our view, the tribunal’s reasoning was securely based. It considered housing development in terms of the 2012 local plan. It concluded that the position of the retained land would not have altered in the no-scheme world. It was entitled to conclude that the acquired land would have been treated in a similar fashion. Its decision was logical and reasonable.”

He concluded: “The tribunal found that in the no-scheme world the contiguous retained land would have been allocated for housing development, so that its allocation for housing in the scheme world is not betterment. It remains possible that there are other respects in which the retained land benefited from the scheme. However, that was not an issue which the tribunal was asked to determine at the preliminary proof.”

For these reasons, the appeal was refused.