Grant v The Secretary of State for Transport

In valuing a dependency claim based on income from a deceased person’s property-development work, the court may assess the cost of replacing the deceased’s services by reference to the development methods reasonably likely to generate income, including land sales. An earlier finding on the development timetable should not be reopened merely because a different valuation approach later appears advantageous. The dependency is valued at the date of death, but that does not require the court to assume that replacement costs and commercially rational arrangements would remain unchanged. VAT is excluded where a reasonable and prudent claimant would become registered and recover it, except for the period before registration. A conventional dependency ratio remains appropriate where the claimed lost income includes an amount that would have met the deceased’s living expenses.

The claim arose from the death of Douglas Michael Grant and concerned damages for his widow’s dependency on income associated with the proposed development of the Highworth Estate. In an earlier judgment, the court awarded [2017] EWHC 1663 (QB) on all but that head of loss and directed further expert evidence because the valuation method ultimately considered appropriate had not been addressed at trial.

The further hearing concerned the assumed role of land sales, the remuneration of a property-development consultant, the starting date and duration of the development, VAT, and the applicable dependency ratio. The court also determined the costs of the defendant’s earlier specific-disclosure application.

The court gave judgment for the claimant on the outstanding dependency issue, subject to the conclusions below, and ordered the claimant to pay 50% of the defendant’s costs of and occasioned by the specific-disclosure application.

1. Land sales and consultant costs. The valuation was properly based on an assumption that income from the remaining land would arise through 50% land sales and 50% built development. That assumption was consistent with the evidence and with the earlier 11-year development estimate. It could not fairly be reopened because land sales had been an important premise of the claimant’s own expert evidence and had been accepted in cross-examination.
2. Consultant remuneration. There was no sufficient basis for adding a further commission on investment sales. The earlier finding that the loss represented 50% of the cost of employing a consultant on the terms set out in Mr Preece’s report was not reopened. Those terms were powerful evidence that the required services were available at that cost.
3. Timeline. The 11-year development period ran from the grant of planning permission. The claimant was also entitled to compensation for the period from the deceased’s death until planning permission, because the evidence established that comparable development work would have required a consultant during that period.
4. VAT. The decision in Welsh Ambulance Services v Williams [2008] EWCA Civ 71 concerned the effect of post-death business performance on a dependency inherited from the deceased. It did not require replacement costs to be frozen at their precise level at death. VAT was therefore recoverable only for the first three months, after which commercial VAT registration would have made it cost-neutral.
5. Dependency ratio. The claim remained an income-dependency claim, despite being valued by reference to replacement services. The conventional ratio of 66.67% was appropriate because part of the replacement cost represented income that would have been spent on the deceased’s living expenses. Services-dependency claims were different because they compensated for services rather than income.
6. Disclosure costs. The defendant was entitled to disclosure of the medical and bank records obtained following the first hearing. The wider requests had an inconclusive outcome. The appropriate order was therefore payment by the claimant of 50% of the defendant’s costs.

The judgment records an earlier judgment in the same litigation, awarding the claimant [2017] EWHC 1663 (QB) on the quantified heads of loss and directing further evidence on the Highworth Estate income-dependency claim. This judgment determined that outstanding issue and the reserved disclosure costs.