Category Archives: Compulsory Purchase

CPO: Upper Tribunal could substitute new respondent after Limitation Period

After the expiry of the relevant limitation period, does the Upper Tribunal have power to substitute a new party as the respondent to a claim for compensation for disturbance?

There appears to have been no decision of the Upper Tribunal dealing with the issue of substitution of a party after the expiry of a limitation period.

In the Upper Tribunal (Lands Chamber) case of William Hill Organisation Limited v Crossrail Limited [2016], this was the position where the claimant had claimed against Crossrail Limited whereas the acquiring authority, and the proper respondent, should have been Transport for London (“TfL”).

Section 35, Limitation Act 1980 concerned the making of new claims in pending actions.

“35 (1)…..

(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either –

(a) the addition or substitution of a new cause of action; or
(b) the addition or substitution of a new party; …

(5) The conditions …… are the following –

(a) ……; and
(b) in the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action.

(6) The addition or substitution of a new party shall not be regarded for the purposes of subsection (5)(b) above as necessary for the determination of the original action unless either –

(a) the new party is substituted for a party whose name was given in any claim made in the original action in the stake for the new party’s name; or
(b) any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action.”

So, the substitution of a third party (C) would only be necessary for the determination of the original action if either of two conditions was satisfied, namely: that the name of either A or B was given in a claim made in the original action in mistake for C’s name; or, a claim made by A or against B in the original action cannot be pursued by or against them unless C is joined or substituted as plaintiff or defendant in the action.

However Section 35 of the 1980 Act made no mention of tribunals, or of tribunal procedure rules.

The Tribunal was satisfied that, amongst the “powers akin to those of the High Court”, referred to by Sedley LJ in R (Cart) v Upper Tribunal [2010], vested in the Upper Tribunal by section 25 of the Tribunals, Courts and Enforcement Act 2007, is the power, conferred on the High Court by section 35(3)-(4) of the Limitation Act 1980, to allow, in accordance with the relevant rules of court, a new claim to be made, by the substitution of a new party, after the limitation period has expired, provided the conditions in section 35(5) were satisfied.

The Tribunal therefore determined the substitution of respondent “out of time” issue in the claimant’s favour.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

CPO Valuation: Tribunal deletes Affordable Housing assumption

Where land is compulsorily acquired the owner can apply under section 17 of the Land Compensation Act 1961 (“the 1961 Act”) for a certificate of appropriate alternative development (“CAAD”).

In the Upper Tribunal (Lands Chamber) case of Mintblue Properties Ltd, Re: Car Park of former E-Mag Factory [2016] the Welsh Government had made a compulsory purchase order against the Car Park of the former E-Mag Factory Brynmawr, Blaenau Gwent (“the appeal site”). The appellant, Mintblue Properties Ltd, made a section 17 application to Brecon Beacons National Park Authority (“BBNPA”) as the local planning authority. The application specified that in the appellant’s opinion residential development would be appropriate alternative development in relation to the appeal site for the purposes of section 14 of the 1961 Act.

BBNPA issued a CAAD certifying that various classes of development would have been granted planning permission if the acquiring authority had not proposed to compulsorily acquire the appeal site.

The appellant appealed to the Tribunal against the CAAD. The only dispute was about the limitation which BBNPA had imposed on the C3 residential use. The appellant said there was no justification for limiting that use to 100% affordable housing which would have massively depreciated the compulsory purchase valuation of the land.

So the Tribunal was required to determine whether, on the balance of probabilities, planning permission for the residential development of the appeal site, with no requirement for any affordable housing, could reasonably have been expected to be granted on the relevant date in the circumstances known to the market on that date and on an application decided on that date or at a time after that date (section 14(4) of the 1961 Act). That issue had to be determined in accordance with the development plan unless material considerations indicated otherwise.

The Tribunal said at the relevant date:

(i) The development plan was the Brecon Beacons National Park Local Development Plan (“the LDP”);

(ii) The appeal site was shown as countryside in the LDP but adjoined a site identified as a residential commitment (the former E-Mag factory site); and,

(iii) The former E-Mag factory site had planning permission for residential development subject to an affordable housing element of 20%.

The Tribunal said the existence of an extant residential planning permission on the adjoining E-Mag factory site was a material consideration to which significant weight should be given.

BBNPA had seemingly failed to accord any weight to this planning permission, relying instead upon an interpretation of Policy 29 of the LDP: “Affordable Housing Exceptions”.

BBNPA’s reliance upon this policy was misdirected for a number of reasons:

(i) The appeal site adjoined and formed a logical extension to the settlement of Brynmawr which was not in the Brecon Beacons National Park but in the neighbouring authority of Blaenau Gwent County Borough Council;

(ii) There was no proven need for affordable housing that could not be met in any other way;

(iii) There was no housing needs survey; and,

(iv) Policy 28 of the LDP said that no affordable housing contributions were required in the Heads of the Valleys and Rural South Submarket in which the appeal site was located.

The appeal site was in a sustainable location and, the Tribunal was satisfied on the balance of probabilities that if the road scheme was cancelled, the appeal site could reasonably have been expected to be granted planning permission for residential development without dependence upon Policy 29, which the Tribunal did not consider to be applicable.

The 20% affordable housing policy that was in force when planning permission was granted for the former E-Mag factory site in 2012, no longer applied at the relevant date. Instead Policy 28 had been introduced and it expressly required no affordable housing for developments, such as could have been expected at the appeal site.

The Tribunal varied the CAAD issued by BBPNA so as to delete the parenthesis “(as a 100% affordable housing development on an exception site in the countryside)” as it applied to C3 -residential use.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Injurious affection: whether compensation claimable for remedial works

In the Upper Tribunal (Lands Chamber) case of Bourne Leisure (Hopton) Ltd v Great Yarmouth Port Authority [2016] 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.

Council estopped from saying compulsory purchase claim time barred

A claim for compensation for compulsory purchase is subject to the 6 year time limit in the Limitation Act 1980 but when does that time limit run from?

In the High Court case of Saunders v Caerphilly County Borough Council (2015) the claimant argued that the 6 years only started when the Lands Tribunal quantified the award.

But the authority successfully argued that it ran from them giving notice to enter as that triggered the right to “compensation to be awarded by the Lands Tribunal”.

However the court found that the authority was bound, in fairness, by the doctrine of estoppel not to hold the claimant to the time limit.

Historically the claimant had in fact applied to the Lands Tribunal in time but the authority had prevailed on the claimant to withdraw that application based on certain assurances about the claimant’s compensation claim being entertained.

A letter from the authority’s head of legal services in 2008, was clear indication that if the outstanding points were not agreed, they would be referred to the Lands Tribunal. Implicit in that communication was that no limitation point would be taken.

Moreover the authority suggested that the parties should continue to negotiate and that commencing proceedings at that stage would serve no productive purpose.

That was the basis upon which negotiations carried on until 2012, when the authority firstly raised the limitation issue and reserved its rights in respect of it.

Thereafter, the claimant had been entitled to a reasonable time to consider his position, and instruct new solicitors.

So the court ruled that the claim should be admitted out of time.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Compulsory Purchase: Valuation of land in a notional “No Scheme” World

The valuation of land that is acquired for development under a Compulsory Purchase Order (“CPO”) (“the subject land”) must ignore any increase or diminution in the value of that land which is attributable to the development of any other land which is also acquired for development under that CPO that would not be likely to have been carried out but for that CPO.

This is to exclude from calculating compensation, increases or reductions in value attributable to the scheme involving the compulsory purchase.

This is based on the principle in Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947].

To apply these rules of valuation, you must first determine the existing planning status of the subject land.

Sections 14-16 of the Land Compensation Act 1961 (“the 1961 Act”) contained a series of assumptions about planning permission which had to be made for the purpose of valuing the subject land in assessing compensation.

These assumptions were additional to any actual planning permission in force (s.14(2)) and did not exclude “hope value” based on the prospect of permission for a development beyond the developments for which planning permission was to be assumed under sections 15 and 16 (section 14(3)).

Section 15 assumed that permission for development was granted in accordance with the acquiring authority’s proposals and the same assumption was made under sections 16(1)-(3) if the subject land formed part of the site to be developed in accordance with the then current development plan.

In each case section 16(6) of the 1961 Act required the valuation to assume that planning permission would be granted subject to such conditions as might reasonably be expected to be imposed.

The fact that these sections assumed a planning permission being in place did not mean it was to be assumed that permission for some other kind of development would not be granted. Expert evidence would help decide that in each case.

But section 16(7) operated to limit the extent to which planning permission for the subject land was to be assumed to be granted by creating a fiction in which the overall redevelopment scheme had been cancelled in respect of, but only in respect of, the subject land: i.e. as if the landowner had succeeded at the public inquiry in persuading the Inspector to omit the subject land from the CPO.

But there was no requirement to assume that the CPO would not have gone ahead in respect of the remainder of the CPO land or that the development of the scheme would not have proceeded without the subject land.

Section 16(7) was not a valuation disregard, but it was part of the valuation process. It might in some cases have required the assumption that planning permission for the relevant development would not be granted. There would be cases, such as roads and other linear transport proposals, where the notional exclusion of the subject land might have required it to be assumed that the scheme would not have gone ahead.

In J S Bloor (Wilmslow) Ltd v Homes and Communities Agency [2015] the owner of the subject land would have perceived himself to be in a relatively strong position with regards to having to make or avoiding contributions to the loop roads and other service connections under the redevelopment scheme (“the KBP Scheme”). The land would therefore have a substantial value based on an expectation of planning permission for a residential development linked to a proposed spine road.

But such value would all have been attributable to the development of the KBP Scheme on the adjoining land and would therefore fall to be disregarded.

The Court of Appeal found that any value due to a possible self contained development of the subject land, independent of the KBP Scheme, and using a nib of its own land for highway access was not attributable to the KBP Scheme on the adjoining land so as to require it to be disregarded under section 6 of the 1961 Act. But in seeking to exclude any diminution in value attributable to that development it was necessary to make a notional adjustment to the planning policies which continued to apply to the subject land at the valuation date.

This was because, in the imaginary planning environment conjured up by sections 14-16 of the 1961 Act, the KBP scheme would severely diminish the planning prospects for an independent development on the subject land. So the task for the valuers and the tribunal had to be to devise a way of excluding or disregarding the KBP Scheme’s impact on that independent value. That could only be done by further modification to the actual planning situation whereby the valuers assume that the KBP scheme and its supporting policies were no longer in place.

The real issue was whether the tribunal had struck the balance, between the “no KBP scheme universe” and the actual planning position, in the right place.

It was not simply a matter of watering down the strict application of the existing and emerging development plan but otherwise leaving the allocation for development of the subject land in place.

What the tribunal should have done was to consider the planning potential of the subject land without regard to the KBP Scheme and it’s underlying policies (policy EC/6 and developing policy EC/7) and therefore its effect on value.

The effect of section 6(1) was that the tribunal needed to consider what wider planning policies (which were not specific to the scheme) would have been likely to have applied in a “no KBP Scheme world”, including in particular PPG3, and to have assessed whether there was any real chance of planning permission being granted for an independent residential development of the subject land under those policies. That approach would have struck the appropriate fair balance between the general public interest and the individual interest as was required under the 1961 Act.

The assumption that policy EC/6 and developing policy EC/7 continued to apply was based on a wrong application of section 6(1) of the 1961 Act and the valuation calculated on that basis must be set aside.

Since the valuation date in this case the relevant provisions of the 1961 Act have been replaced and re-cast by the provisions of the Localism Act 2011.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Pointe Gourde Rule: Value to Owner not Acquirer what matters

The “value” of rights over land (or land) being acquired by compulsory purchase is their value to the claimant as owner, and not their value to the acquiring authority (“the Council”).

So when assessing the claimant’s compensation there must be disregarded:

– any premium value, or value increase, which is entirely due to the scheme for which the Council are acquiring the rights over land (or land); or

– any key or ransom value of the rights over land (or land) attributable to the scheme.

The fact that rights over land (or land) are being acquired for a particular purpose might have evidential value showing that alternative development schemes for the same purpose are not fanciful but might have a degree of probability.

If such premium value or value increase existed prior to the acquisition it must be taken into account. If it were to be disregarded the Council would be expropriating that pre-existent value without compensation.

Being based on the price rights over land (or land) might reasonably be expected to fetch on the open market at the valuation date. The claimant’s compensation, would be expected to reflect that pre-existent value.

What is required is to identify what proportion of the current value of the land (or the land over which rights are exercised):

– relies solely on, and is wholly attributable to, the Council’s scheme? That proportion must be disregarded in assessing any compensation; or,

– is attributable to events which would have increased value anyway independently, and regardless, of the scheme? That proportion will count towards the compensation.

In the Upper Tribunal (Lands Chamber) case of Hanbury -Tenison v Monmouthshire County Council [2014] a retail scheme required the relocation of a livestock market.

The scheme required the extinguishment of the claimant’s shooting rights to the extent they affected the new livestock market site the Council had identified.

The Tribunal accepted that:

– there might be factors apart from the existence of the Council’s scheme that added to the value of the rights (or land) even if

– that additional value was purely a ransom value that the rights (or land) might have in relation to a similar scheme (other than the Council’s).

In valuing any rights over land (or land) the development potential of that land for some alternative use was clearly relevant.

If the land (or land over which rights are exercised) was more valuable due to the land’s “potential” for some alternative more lucrative use which was:

– not attributable solely to the Council’s scheme, but

– would have existed even in the absence of the scheme,

then that “potential” need not be left out of account when that land is valued.

So in this case the principle mentioned in my opening paragraph did not necessarily require the compensation value of the rights to be “restricted to their intrinsic value as shooting rights”.

Any additional value in the rights must depend on their capacity to inhibit, or ransom, the use of the land over which the rights were exercisable for some more profitable purpose.

The land over which the rights were exercisable was suitable for development as a market and the prospect that it would be likely to be developed as a market was a matter which might enhance its value and therefore any ransom value of the rights.

The purpose the Council was going apply to the land should not be taken into account i.e. the specific scheme should be disregarded.

However where there was potential for the land, that the rights were exercised over, to be used by a scheme, other than the Council’s, as a livestock market, the owner of the rights should be paid higher compensation by the Council to take that potential into account.

It follows that in arriving at the value to the owner it was necessary to distinguish between:

– any enhancement in value attributable solely to the presence of the Council in the market as a purchaser of the land for the Council’s scheme in exercise of its statutory powers; and

– the value which already existed and would therefore have continued to exist but for the Council’s scheme.

It was only the latter value which is relevant for the assessment of compensation.

Here the test was: whether there existed in the rights, or the land they were exercised over, an enhanced value which existed independently of the Council’s need to find an alternative site for the livestock market?

In fact two factors demonstrated that there was nothing outstanding about the relevant land:

1. There had been a number of alternative sites which attracted more immediate attention and obtained favourable planning treatment. The land had not originally featured in the list of fourteen such sites identified.

2. There was no competition for the land from supermarket operators or other developers seeing it as providing a potential foothold on the town centre site. When it did come on to the market it was sold as part of a larger site at an agricultural value.

In conclusion the Tribunal said any significant increase in the value of the rights, above their intrinsic value as shooting rights, was to be disregarded because that increase was solely attributable to the Council’s scheme for the redevelopment of the existing livestock market site for retail purposes and for the construction of the replacement livestock market on the land over which the shooting rights had been exercised.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Industrial purposes in pylon compensation agreement included warehousing

Public utilities have compulsory purchase powers and can insist on acquiring rights they require, but usually prefer to proceed by negotiation and agreement.

On occasion the deed of easement may contain a clause to ensure that if a development opportunity emerges in future, the Grantor or his successors will be entitled to compensation for any reduction in value due to the existence of the pipes or wires.

There may be advantages to both parties in this:

– the Grantor won’t have to accept a speculative assessment as to the reduction in the value of his land at some unknown point in the future for a use which can only be guessed at and could easily be underestimated; and,

– at the time of the easement being granted, the Utility would not be required to make a payment to compensate for a loss which may never happen.

In the Upper Tribunal (Lands Chamber) case of G Park Skelmersdale Ltd v Electricity North West Ltd [2014] G Park Skelmersdale Limited (“the claimant”) sought compensation from Electricity North West Limited (“the respondent”), under a deed of grant (“Deed”) dated 12 May 1967 made between the Central Electricity Generating Board (“CEGB”) and Mr William Holland, (“the Grantor”) who owned Spa Farm, Lathom, Skelmersdale, Lancashire (“the Property”) prior to the claimant.

This said that if the Grantor obtained planning permission for the Property “for residential or industrial purposes” the Grantor could give CEGB 6 months’ notice to pay the Grantor compensation for any diminution in the value of the areas benefited by the planning permission due to the presence of the electric lines above the Property.

The writer was brought up in Lathom within sight of the pylons and remembers their first appearance on the skyline. Indeed the House depicted above is nearby Lathom House, designed by Giocomo Leoni in 1714 for East India Company Director Sir Thomas Bootle, and mainly demolished in 1925.

On 26 March 2008 the claimant gave the respondent notice of planning permission for warehousing and distribution and claimed compensation under clause 3(1) of the Easement.

The parties agreed to postpone the 6 month deadline to pay to allow for consideration of the feasibility of diverting the overhead line to allow the development to proceed but that did not happen.

The two preliminary issues the Tribunal had to decide were:

1. Whether the references to “development … for … industrial purposes” and “such purposes” in clause 3(1) of the Easement included development for primary storage/distribution uses under Class B8 of the Use Classes Order 1987; and

2. Whether the appropriate valuation date for the assessing compensation was the date of:

2.1 the grant of outline planning permission (20 December 2001); or

2.2 the variation of that planning permission (9 September 2004), or

2.3 the approval of reserved matters (15 May 2007), or

2.4 the notice of claim (26 March 2008).

The respondent said clause 3(1) was to restrict compensation to cases where the development prevented was a residential or industrial use. However:

– the Tribunal could think of no reason why CEGB would reasonably expect to pay compensation if the presence of its overhead lines restricted one valuable use of the land, but NOT if another use was restricted; nor

– could it think why the ability to develop the land for certain uses should be restricted without the Grantor having any compensation for the reduction in value due his inability to pursue those uses. Such an uncommercial arrangement was not likely to have been the parties’ intention.

the Tribunal found:

– on the first preliminary issue that the expression “industrial purposes” was not to be narrowly construed, and was wide enough to include the development of the Property for storage and distribution uses within Class B8.

Against the context of the Property’s then agricultural use, the use of the composite expression “residential or industrial purposes” suggested that what was intended “was a broad classification of alternative uses “representing the principal classes of profitable development”, rather than a narrow focus on manufacturing industry.”

Also development for “industrial purposes” had a wider connotation than “development for industry”, and would include ancillary uses. Land used for the storage of raw materials or components for use in manufacturing, or of manufactured goods awaiting distribution to customers, was used for “industrial purposes”.

On the second issue of the valuation date, the relevant planning permission was the outline planning permission obtained in 2001, renewed and then supplemented by the reserved matters approval obtained on appeal on 15 May 2007.

The parties must have intended that the relevant permission would include the details necessary to enable the property to be developed. The test was at what date did the development get the planning permission that could not be implemented because of the electric lines over the property? That date was 15 May 2007 when the final reserved matters approval was obtained. It was only at that date that development could have proceeded.

So the valuation date under clause 3(1) was 15 May 2007.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

#HS2 Safeguarding Directions did not trigger SEA Assessment

The Planning Court case of HS2 Action Alliance Ltd & Anor, R (on the application of) v Secretary of State for Transport & Anor [2014] was a claim for judicial review by HS2 Action Alliance and the London Borough of Hillingdon Council, who said that the defendant, the Secretary of State for Transport (“the Secretary of State”), acted unlawfully when he used statutory powers to make safeguarding directions protecting the route for Phase 1 of HS2. Amongst other things they required High Speed Two (HS2) Limited (“HS2 Ltd.”) to be consulted on planning proposals affecting the route.

The claimants said that the safeguarding directions ought to have been previously assessed under the regime for strategic environmental assessment (“SEA”) in Directive 2001/42/EC “on the assessment of the effects of certain plans and programmes on the environment” (“the SEA Directive”) and the Environmental Assessment of Plans and Programmes Regulations 2004 (“the SEA regulations”), and that the safeguarding directions were unlawful and should be quashed because of the Secretary of State’s failure to undertake such an assessment.

The claimants said that the safeguarding directions were a plan or programme within article 2(a) of the SEA Directive. They had been prepared for transport, town and country planning and land use, and so came within the ambit of article 3(2)(a).

The claimant said the safeguarding directions:

– set the framework for future development consent of projects;

– operated as a legal constraint on development consent being granted by local planning authorities for various projects;

– set criteria by which that legal constraint could affect decisions on applications for planning permission – that future development is proposed within the safeguarded area and does not fall within the specified categories of exempted development; and

– operated to constrain the Secretary of State’s discretion as to whether and how to restrict the grant of planning permission in cases passed on to him, because the requirement for the HS2 land would be a material consideration for him to take into account.

The court said that to qualify as a “framework” subject to SEA assessment, the safeguarding directions would have to be more than merely persuasive but guiding and telling because they had a stated role in the hierarchy of considerations to be taken into account by decision makers.

Similar previous litigation based on the failure to subject HS2’s 2012 Command Paper to SEA assessment failed in the Supreme Court because the 2012 Command Paper did not seek to place any further constraint on Parliament’s consideration of the environmental impacts of the project as a whole, under the hybrid Bill procedure. Also the Supreme Court had concluded that to qualify as a policy “framework” that needed prior SEA assessment the item:

“must operate as a constraint on the discretion of the authority charged with making the subsequent decision about development consent”. It “must at least limit the range of discretionary factors which can be taken into account in making that decision, or affect the weight to be attached to them”.

Here safeguarding directions were a consequence of the decision to promote the HS2 project.

They were foreseen by the 2012 Command Paper and were part of the process by which the HS2 project decision was proposed to be put into effect.

They were not a framework of policy or criteria constraining the discretion of the decision-maker in the making of the decision. It would be the HS2 project itself, as it was at the relevant time, which would inform:

– the response of HS2 Ltd. to consultation; and

– the intervention of the Secretary of State in the process, if he did intervene.

and it would not be the safeguarding directions that exerted a substantive influence on the decision, but the HS2 project itself.

So the safeguarding directions were not a plan or programme which set the framework for development consent, such as themselves to be subject to SEA assessment, but merely the servant of the HS2 Project which would itself have to pass environmental impact assessment (“EIA”).

The EIA for the HS2 project is having to comply with the requirements for an assessment prepared under the Annexes I and II to Directive 85/337/EEC and Article 1(4) of the EIA Directive (2011/92/EU).

In that assessment consideration would have to be given to the likely significant effects of the railway on the environment, including the use of the sites for use in its construction, and as to alternatives.

The authorities hosting the construction and operation of the railway, the owners of land affected by the project and also the public would have had the opportunity to participate in that process.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Tunnel shaft site’s suitability excluded from compensation

In compulsory purchase the Pointe Gourde principle states that the level of compensation for the compulsory acquisition of land cannot be increased by a change in the value of land which was entirely due to the scheme that the compulsory purchase was needed for. The purpose of the principle was “to prevent the acquisition of the land being at a price which is inflated by the very project or scheme which gives rise to the acquisition.”

Section 5 of the Land Compensation Act 1961 (“the 1961 Act”) requires compensation for compulsory acquisition to be assessed in accordance with 6 rules. Rule (3) says:

“The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the requirements of any authority possessing compulsory purchase powers.”

The reference to special suitability is of the land itself and not the nature of an interest giving rise to marriage value e.g. the fact that a sitting tenant would pay more than an investor for the freehold to avoid being turned out of the property, would not clothe the land with a special suitability whose value would fall to be ignored under rule (3).

In Miller v Network Rail Infrastructure Ltd [2014] a West Coast Main Line Tunnel Pressure relief shaft was built on the claimant’s land under two licences. The land was later acquired by Network Rail Infrastructure Ltd (“NRIL”) under a compulsory purchase order.

The claimant argued that he had been misled as to the necessity for the shaft and that the acquisition of the related land (“plot 11a”) was to enable NRIL to avoid having to go to the trouble and expense of having to remove the pressure relief shaft. He said that was a value to NRIL and that he was entitled to compensation reflecting that value. Rule (3) had no application because the land had no special suitability for the shaft because a shaft in that position was wholly unnecessary.

NRIL satisfied the Upper Tribunal (Lands Chamber) (“the Tribunal”) that the shaft had been necessary as they did have realistic plans for 140mph trains.

NRIL successfully argued that the land for the pressure relief shaft was specially suitable for the purpose of using, maintaining and gaining access to the shaft because it was the land upon which the shaft had been built under licence. No other land was suitable for that purpose because the shaft was not, and could not be, on other land. The pressure relief shafts had to be equidistantly placed over the old rail tunnel.

The claimant had been incorrect to say plot 11a had been acquired to enable NRIL to avoid having to remove the pressure relief shaft. The shaft had been constructed under two licences for which the claimant would have been paid licence fees. The claimant accepted that, if there was no fraudulent misrepresentation, NRIL could not be required to remove the shaft once constructed. The Tribunal found no fraudulent misrepresentation, accordingly there could be no enhancement to the value of the claimant’s land because NRIL would never have had to pay him anything further to retain the shaft.

But neither of the licences gave NRIL any right to use, maintain or gain access to the shaft and NRIL had had to acquire the shaft land under the compulsory purchase order to be able to use it.

So an enhanced value due to NRIL’s special interest in purchasing the land could not be given to plot 11a over and above the amount the land would have fetched if sold in the open market.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Electricity Wayleave compensation included reduced value caused by loss of residential development contract

The Court of Appeal case of National Grid Electricity Transmission Plc v Arnold White Estates Ltd [2014] will make power utilities think twice about holding onto the existing routes of their power lines where these impede development.

The respondent had contracted to sell two parcels of land for residential development.

One of these related to a strip and was conditional on the removal of an overhead power line. Due to indexation the price had risen to £5.82m.

When the respondent gave notice terminating the current wayleave, the appellant electricity company applied for and got a statutory wayleave to retain the power line so the conditional contract lapsed.

Planning permission had been got for the land but the conditions precluded development with the power lines still there.

The sole issue was how much compensation was payable to the respondent under para 7 of Schedule 4 to the Electricity Act 1989.

The respondent said it ought to be the value of the land under the contract at the date of the new wayleave notionally free of the new wayleave minus the nominal value of the land at the date of the new wayleave as it actually was i.e. encumbered by that new wayleave.

The date was critical as by 2010 the value of residential land was much less than the contract had provided for.

The Court of Appeal, held that the respondent had been correct in the basis upon which it had claimed compensation.

AWE had crystallised the development value by the two sale contracts made in July 2007, by reference to development values then prevailing.

Nothing in paragraph 7 of schedule 4, precluded compensation for the loss of contractual rights caused by the grant of a wayleave from the compensation afforded by the 1989 Act. In fact, the right to compensation under paragraph 7(1) was conferred in the most general terms.

The only limitation was that the loss claimed for must be loss suffered by the claimant in his capacity as owner or occupier of the land, rather than in some wholly unrelated capacity.

So there would be no compensation for loss suffered betting on the outcome of an application to the Secretary of State under paragraph 6 for the grant of a wayleave, even if the bet was placed and lost by the owner or occupier of the land.

The loss of this contractual right to proceeds of the sale under a conditional contract for the sale of the land, where the contract lapsed because of the grant of the wayleave, was a loss suffered by AWE in its capacity as owner of the land.

It was a right inseparable from the seller’s status as owner of the land in question.

Compensation was to be based upon the special value of the land to the owner rather than its objective market value.

The court commented that future tribunals would be astute to detect and defeat any collusive attempts to manufacture artificially high land contract prices ahead of the grant of wayleaves for the purposes of generating an inflated level of compensation.

This blog has been posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.