Waters v Welsh Development Agency

Under the Pointe Gourde or no-scheme rule, compensation must disregard increases in land value attributable to the scheme or project underlying the compulsory acquisition. The scheme is identified as a matter of fact, having regard to the project’s substance rather than the formal identity of the acquiring authority. Land need not have been identified from the outset, provided it was later identified as part of the project. A linked acquisition may form part of the same scheme even where it is made by a different authority and after the principal project has begun. The Indian case remains authoritative on market value and is reconcilable with the no-scheme authorities on its facts. The landowners were entitled to nature-reserve value, but not to additional value attributable to the Cardiff Bay Barrage project.

The appellants owned farmland at Nash, near Newport. Their land was compulsorily acquired for the Gwent Levels Wetlands Reserve, which was intended to provide environmental compensation for habitat lost through the Cardiff Bay Barrage.

The Lands Tribunal rejected the claimants’ contention that the land had a special suitability under rule (3) of section 5 of the Land Compensation Act 1961. That issue was not appealed. It held, however, that the scheme underlying the acquisition was the Cardiff Bay Barrage and that value attributable to the need for the reserve had to be disregarded under the no-scheme rule.

The appeal concerned the proper relationship between market value, rule (3), section 6 of the 1961 Act and the no-scheme rule, including whether the Indian case remained good law and whether a project promoted by bodies other than the acquiring authority could constitute the relevant scheme.

1. Appeal dismissed. The claimants were entitled in principle to value attributable to the land’s use as a nature reserve, but not to “barrage inhibition value”, namely value attributable to the Cardiff Bay Barrage scheme.
2. The no-scheme rule excludes increases in value caused by the scheme or project for which the land is acquired. The scheme is a matter of fact. Its scope is determined by the substance and practical relationship of the relevant activities, not merely by the compulsory purchase order or the formal identity of the acquiring authority.
3. The acquiring authority need not itself have originated or formally joined the wider project. LAW’s role was principally to acquire land for development projects initiated by others. That role did not alter the basis of compensation. The relationship between LAW, CBDC, CCW and the Government was relevant to the factual exercise of identifying the scheme.
4. Identification of the subject land as part of the scheme is a prerequisite, but it imposes no rule that the land must have been identified before the principal project began. The reasoning in Fraser supported treating later acquisitions as part of an earlier project where the factual link was sufficiently close.
5. The Lands Tribunal had used “public purpose” as an aid to defining the scheme. That was not a substitute for the conventional no-scheme inquiry. The immediate purpose of the acquisition must be distinguished from the wider or ultimate purpose of the project.
6. The Indian case remained authoritative on market value. A purchaser’s particular need may be taken into account in assessing what a willing vendor and willing purchaser might agree, even where there is only one possible purchaser. Its treatment of the no-scheme rule was not to be rejected as wrong; the authorities could be reconciled by reference to their different facts.
7. Section 6 and Schedule 1 of the 1961 Act could not simply be ignored. They supplied guidance on legislative policy, particularly for acquisitions connected with urban development areas. The policy supported a wide application of the no-scheme rule in this case.
8. On the evidence, the Tribunal was entitled to find that the nature reserve was closely linked to, and an integral element of, the Barrage project. “Dependency” was used as a factual description, not as a separate legal test.

• Court of Appeal: Appeal from the Lands Tribunal dismissed with costs. Permission to appeal to the House of Lords was granted.
• Lands Tribunal: The President determined preliminary issues. Rule (3) of section 5 of the Land Compensation Act 1961 did not exclude the claim. The value attributable to the Gwent Levels reserve was nevertheless excluded under the no-scheme rule.