In the Upper Tribunal (Lands Chamber) case of Bourne Leisure (Hopton) Ltd v Great Yarmouth Port Authority  the claimant alleged damage to land was caused by the construction of an outer harbour which changed the tide-flow patterns increasing erosion and causing the failure of part of the adjacent sea defences.
So there had been a loss of beach, loss of access to the beach and damage to and loss of cliff including part of the claimant’s land.
The compensation claim included the cost of carrying out the remedial works, the maintenance and monitoring of those works, operational losses and diminution in the value of the land from loss of beach.
The limitation period set out in s.9(1) of the Limitation Act 1990, is six years from the date on which the cause of action to recover any sum recoverable by virtue of any enactment accrued.
Two major issues where:
(1) Whether, for section 9 of the Limitation Act 1980, the cause of action accrued when the outer harbour works were executed or whether the cause of action accrued when, as a result of those works, there occurred material physical damage to, or interference with, any interest in land of the claimant.
The Tribunal said the term “injuriously affected” connotes “injuria”, that was to say, damage which would be wrongful but for the protection afforded by any statutory powers. So a claim cannot arise under s.10 of the Compulsory Purchase Act 1965 unless and until a claim would have arisen in nuisance, but for the statutory authority.
A claim in nuisance did not arise until direct physical damage was suffered or there was substantial interference with the enjoyment of an easement.
So, here, the claimant’s right to compensation arose, if at all, upon physical damage to the claimant’s land or substantial interference with an easement.
(2) Whether the types of costs and losses claimed by the Claimant are matters were compensatable under section 10 of the Compulsory Purchase Act 1965 or whether compensation can only be awarded under section 10 for the diminution in the open market value of land or interests in land.
The Tribunal said that personal losses, business or otherwise, are not recoverable under s.10 of the 1965 Act. However, business losses which affect land value are recoverable.
There was no reason why the compensation payable under s.10 of the 1965 Act should not include the cost of remedial work.
This was so self evidently correct that acquiring authorities had never disputed it, so there was no case in which this had ever been an issue.
In past cases, the cost of repairing physical damage to the property was regarded as a loss in value of the land.
However, the landowner is entitled to no more than fair and reasonable compensation and is under an obligation to mitigate his loss.
Where the cost of remedial works is more than the diminution in value of the land the diminution in value of the land may be the proper yard stick for compensation.
However, this may not always be the case as other factors may be relevant. It may be reasonable to repair a building even though the works exceed the diminution in value of the land if the building’s heritage value is more than it’s financial value.
This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.