Thomas & Ors v Bridgend County Borough Council [2011] EWCA Civ 862

This Court of Appeal case might be rather limited on its facts, but there are some broader issues and it is interesting. The appeal was of a preliminary issue, whether the Claimants’ claim under Article 1 Protocol 1 was viable. Art 8 was not relied upon.

Briefly, the appellants all own houses near to a new relief road in Brigend. They claimed compensation under Part 1 of the Land Compensation Act 1973, alleging depreciation in the value of their homes due to noise and other nuisance from the road. For the purposes of this appeal, such a depreciation was assumed.

S.19(3) of the 1973 Act provides:

In the application of this Part of this Act to a highway which has not always since 17 October 1969 been a highway maintainable at the public expense as defined above:

(a) references to its being open to public traffic shall be construed as references to it being so open whether or not as a highway so maintainable;

(b) for references to the highway authority who constructed it there shall be substituted references to the highway authority for the highway;

and no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date.” (emphasis added)

The problem was that the highway in this case had been opened to public transport in 2002, but did not become adopted as maintainable by the local authority until 2006, over 3 years later. This appeared to prevent a claim under the Act. The question was whether this exclusion was compatible with Convention rights and if not, whether a remedy could be provided.

While O’Connor v Wiltshire County Council [2007] EWCA Civ 426 appeared to be on a similar point on the 1973 Act, it had in fact been decided in that case that the highway had been adopted within the relevant period, so there was no authority on the point.

The road was built by a developer as part of a housing development that started in 1999. A 2002 agreement provided that the road would be developed by the developer within 14 weeks and adopted by the council once complete, with the developer liable for any 1973 Act claims. The delay in adoption was allegedly due to delay by the developer in completing ‘minor works and audits’. The delay apparently resulted in the exclusion of claims under the Act.

The Claimant’s case under Article 1 Protocol 1 (‘peaceful enjoyment of possessions’) was:

that the use of the road has interfered with the peaceful enjoyment of his clients’ houses; and that the provisions designed by Parliament for their protection, and necessary to achieve the fair balance which Article 1 requires, fail to do so because they can be defeated by the unilateral action (or inaction) of those responsible for payment. He submits that the court has power to remedy that defect, under section 3 of the Human Rights Act 1998, by re-interpreting section 19(3) of the Act; or, failing that, to make a declaration of incompatibility.

Following Bugajny v Poland app 22531/05 6th November 2007 [2007] ECHR 891, assessment of an alleged Art 1 Prot 1 breach should be examined under 4 heads

i) Whether there was an interference with the peaceful enjoyment of “possessions”;
ii) Whether the interference was “in the general interest”;
iii) Whether the interference was “provided for by law”;
iv) Proportionality of the interference.

Interference with peaceful possession must be more than mere interference with peaceful enjoyment (Rayner v UK (1987) 9 EHRR CD375 – Heathrow Airport noise, failed under Art 1 but proceeded under Art 8). There must be evidence of loss of value sufficient to merit a claim for compensation.

Bridgend argued that any interference must be ‘direct and serious’ to engage Art 1 Prot 1, even if there was a diminution in value, whereas the Claimants argued that it was enough to show interference with peaceful enjoyment combined with loss of value. The Court of Appeal agreed with the Claimants.

On proportionality, the claimants argued that the:

balance drawn by the statute is not fair, because it leaves a gap, apparently unintended, in the protection which Parliament intended. The 1972 White Paper makes clear that the new compensation rights then proposed were seen by the Government, and in due course Parliament, as necessary to achieve the “fair balance”, now safeguarded by Article 1. It is manifestly anomalous and unreasonable that the right to such compensation, following the opening of a new road, should be lost merely because of unjustified delay by the developer, whose interests were in direct conflict with those of potential claimants.

Bridgend argued that Parliament had set a limit on the period in which compensation could be claimed and this was within the margin of appreciation. The period addressed the dip between a new road opening and ‘people getting used to it’.

The Court of Appeal held that:

The general purpose of these provisions is, as the 1972 White Paper made clear, to strike a balance between public and private interests. It is right of course that member states have a significant margin of discretion in deciding how to give effect to the rights safeguarded by Article 1, and in setting the boundaries of any mitigation measures. However, that works both ways. In deciding whether the proportionality test is satisfied, the court is entitled to treat the compensation rights created by the Act as part of the “fair balance” thought necessary by Parliament. Where a class of potential claimants is excluded from those rights, the court is entitled to inquire into the reasons for the exclusion, and ask whether it serves any legitimate purpose, or leads to results “so anomalous as to render the legislation unacceptable” (J A Pye (Oxford) Ltd v UK (2008) 46 EHRR 45, para 83).

There was no clear basis for the 3 year limit in the contemporary material. In the absence of specific supporting material, it would appear that the 3 years was intended to ensure that there was a sufficiently close link between creation and adoption of the road, rather than to address the ‘dip’ in value proposed by Bridgend, as it did not affect valuation.

In operation it was ‘truly bizarre’. A road builder who completed in time would be penalised by the penalty, where delay would avoid it. The householders not only suffer the noise and inconvenience, they lose their right to compensation. “This result is in my view so absurd that it undermines the fairness of the “balance” intended by Parliament, and necessary to satisfy Article 1.”

On the question of whether the absence of compensation was material for a breach of Art 1 Prot 1:

58. In the Lands Chamber, HH Judge Jarman QC proceeded on the assumption that in principle noise and nuisance from the use of the road might amount to an interference with the first rule of Article 1 and that the claimants would be able to show significant diminution in the value of their properties. However, he drew a distinction between the effect of the road, which was potentially within Article 1, and the absence of compensation, which in his view was not:
“30. The scheme under the Act aims to mitigate one effect, a decrease in value of homes, by the giving of compensation. Mr Weir emphasised that it is that effect which is at the heart of his case of interference within the meaning of article 1. However, such a decrease, in my judgment, has been suffered whether compensation under the Act is paid or not. The compensation provided for by the Act to mitigate that decrease is not in my judgment a possession within the meaning of article 1.”

59. I am unable with respect to accept that distinction. Once an interference with Article 1 rights is accepted, it is clear from the Strasbourg authorities (see e.g. Sporrong [Sporrong and Lönnroth v Sweden (1983) 5 EHRR 35] itself) that the presence or absence of compensation is not a separate issue, but is an important element in deciding whether, in authorising the interference in the general interest, the balance struck by the state is fair.
Accordingly, I agree with [the claimants] that a breach of Article 1 has been established.

Remedy
The Claimants argued that the Court’s powers under s.3 HRA were sufficient to enable it to effectively rewrite s.19(3) of the 1973 Act to remedy the defect, the proposed form being:

“…no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date unless the highway authority agreed by the relevant date that the highway would become so maintainable.”

The Defendants argued that any interpretative power must ‘go with the grain’ of the legislative scheme and the claimants’ proposal went against it by changing the category of person who could claim and changing the time in which they could claim. “Furthermore it is unworkable because the council could not properly agree by the relevant date that the highway would definitively become maintainable, since they could not be certain that it would meet the necessary standards”.

S.3 HRA required the court to read legislation in a way which is compatible with convention rights, “so far as it is possible to do so”. This was a power of acknowledged width, although in Re S [2002] 2 AC 313, the House of Lords emphasised the need not to cross the boundary between interpretation and amendment.

In this case the proposed interpretation did not change any fundamental feature of the Act, but gave effect to the broader intention that those affected by new roads should be compensated. “”Logic and common sense” suggest that had Parliament been alerted to the problem it would not have left open a loophole such as revealed by the present case.”

The Defendants’ practical objection was not impressive. While on the face of it, the wording “leaves open the possibility that a highway authority might become liable in respect of a road which, because of defective construction, is never taken over as maintainable by the public. However, as has been seen a highway which is not maintainable by the public is not a “highway” within the meaning of the Act. So the issue would never rise.”

The wording could be refined so as not ot ignore the 3 year limit altogether, so:

… no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date unless, under an agreement made by the highway authority before the relevant date, the highway should reasonably have become so maintainable within that period.

But the precise wording was not at issue here, it was sufficient to find that the 1973 Act could be interpreted in such a way as to be in accordance with Art 1 Prot 1, such that the Claimants would be entitled to compensation under the Act, assuming they could prove the loss alleged.

However, a general review of the operation of the section of the Act by Parliament was clearly desirable.

See also the excellent post on the UK Human Rights Blog.