LAND

Compulsory purchase - land acquired for nature reserve to replace bird habitats destroyed by barrage scheme - compensation value of land not increased by pressing need to replace habitats

Waters and others v Welsh Development Agency: HL (Lord Nicholls of Birkenhead, Lord

Woolf Chief Justice, Lord Steyn, Lord Scott of Foscote and Lord Brown of Eaton-under-Heywood): 29 April 2004

Work pursuant to the Cardiff Bay Barrage Act 1993 began in 1994 and proceeded on the basis of assurances by the government that compensatory provision would be made to create wetland bird habitats to satisfy the requirements of the European Commission's directives regarding the conservation of wild birds and their habitats.

In 1996 the Secretary of State for Wales announced a proposal for a wetland reserve ten miles from the barrage.

In 1997 the claimants' land was compulsorily purchased for part of that reserve.

The compensation payable to the claimants was subject to the 'no-scheme' rule that in the assessment of compensation any increase in the value of the land that was entirely due to the scheme underlying the acquisition should be disregarded.

The claimants contended that the enhancement of the value of their land resulting from the government's pressing need to comply with its obligations under the directives by establishing the reserve should be taken into account in assessing compensation.

The Lands Tribunal held that the scheme underlying the acquisition was the barrage project and not the nature reserve, and that the land was to be valued leaving out of account any effect on value of the adoption or implementation of the nature reserve proposal.

The Court of Appeal upheld that decision.

The claimants appealed.

David Holgate QC and Timothy Morshead (instructed by Jacklyn Dawson & Meyrick Williams, Newport) for the claimants; Anthony Porten QC and Adrian Trevelyan Thomas (instructed by the Legal Director, Welsh Development Authority) for the acquiring authority.

Held, dismissing the appeal, that in granting power to acquire land compulsorily for a particular purpose, Parliament did not intend thereby to increase the value of that land or that the acquiring authority should pay a larger amount in compensation than the owner could reasonably have obtained for his land in the absence of the power; that it was necessary to disregard the 'special want' of an acquiring authority for a particular site and to separate from the market value of land any enhancement in value attributable solely to the presence of the acquiring authority in the market as a purchaser in the exercise of its statutory powers; that potentiality was to be assessed and valued as matters stood before the particular scheme, of which the subject land's acquisition was part, came into being; that the practical difficulty with the principle in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, of in identifying the area of the 'scheme' in question, did not arise when the enhanced value arose from the authority's proposed user of the subject land; but that the application of that principle was not self-defining when regard was had to the authority's proposed use of other land, with the result that the statutory code in section 6 of the Land Compensation Act 1961 was not exhaustive and the Pointe Gourde principle still applied; that for the purposes of that principle the acquisition of the claimants' land for a nature reserve was an integral part of the barrage project; and that, when assessing compensation, the authority's need to acquire the land as a palliative measure for the environmental consequences of the barrage was to be disregarded.

(WLR)

TAXATION

Income tax (schedule E) - single payment to employee to settle employment dispute, not chargeable to income tax

Wilson (Inspector of Taxes) v Clayton: ChD (Mr Justice Patten): 29 April 2004

The employer, a local authority, sought to terminate the benefit of an 'essential car user allowance' that the taxpayer received.

Together with many other employees, he refused to accept the new employment terms offered and was dismissed.

An employment tribunal held the dismissal to be unfair and at a subsequent remedies hearing by consent the employer agreed to reinstate the taxpayer, to restore the car allowance and to make him a single payment of 5,060.

The Revenue claimed that that payment was chargeable to income tax under schedule E.

An appeal by the taxpayer was upheld by general commissioners.

The Revenue appealed.

Adam Tolley (instructed by the Solicitor, Inland Revenue) for the Revenue; Glen Willetts (instructed by Thompsons, Nottingham) for the taxpayer.

Held, dismissing the appeal, that section 19 of the Income and Corporation Taxes Act 1988 set out the charges to schedule E tax on emoluments, defined in section 131 of the Act as including 'all salaries, fees, wages, perquisites and profits whatsoever'; that section 154 of the Act imposed the charge on benefits received by reason of the employment; that section 148 of the Act provided for the taxation of payments exceeding 30,000, not otherwise chargeable to tax, received 'in connection with' the termination of employment; and that the payment, the result of a negotiated compromise of a dispute about dismissal, was not an emolument and, being under 30,000 was outside the section 148 charge.

BANKRUPTCY

Statutory demand - debt arising from costs order - debtor's pending action against creditor 'cross demand' justifying setting demand aside

Popeley v Popeley: CA (Lords Justice Ward and Jonathan Parker and Mr Justice Moses): 30 April 2004

A statutory demand was based on the debtor's liability under a costs order made in the creditor's favour.

The debtor began associated proceedings against the creditor and applied for the demand to be set aside under rules 6.4 and 6.5(4)(a) of the Insolvency Rules 1986.

The district judge, without giving reasons, refused the application.

Edward Bartley Jones QC, sitting as deputy judge of the Chancery Division (see [2003] Gazette, 2 October, 33) allowed the debtor's appeal.

The creditor appealed.

John Briggs (instructed by Portner & Jaskel, London) for the creditor; Jasbir Dhillon (instructed by Whitehead Moncton, Maidstone) for the debtor.

Held, dismissing the appeal, that the court had a discretion under rules 6.4 and 6.5 of the 1986 rules to set aside a statutory demand where the debtor appeared to have a 'cross demand' against the creditor; that the district judge had erred in failing to give a reasoned judgment; that it had thus been open to the judge to hear the application afresh; and that, as a matter of construction and in the particular circumstances, the debtor's claim, being a genuine and serious one, was a 'cross demand' within the meaning of rule 6.5(4)(a) of the 1986 rules and the judge's decision to set the demand aside could not be interfered with.

The law reports are prepared by the reporters to the Incorporated Council of Law Reporting for England and Wales; telephone: 020 7242 6471; fax: 020 7831 5247; http://www.lawreports.co.uk WLR means that a report has been submitted for publication in the Weekly Law Reports