In R (on the application of Iceland Foods Ltd) v Newport City Council (2010) the court clarified the extent to which the purpose for making a general vesting declaration (GVD) must differ from that of the compulsory purchase order (CPO) for it to become unlawful. Iceland applied for judicial review of a decision of Newport City Council to serve a GVD following a compulsory purchase order relating to the redevelopment of a retail precinct arguing that as the developer had gone in to administration, the original project was no longer viable.
The judge held that the original purpose of the CPO was the carrying out of a comprehensive scheme of development, but not necessarily by a particular developer. Although the council had considered the scheme to be unviable if the troubled developer were to pay all the associated costs, the redevelopment scheme was still viable for the purpose for which planning permission had been granted. The court also held that if the Council had concluded that the scheme would remain unviable for the foreseeable future it might have acted unreasonably in implementing the GVD. This case highlights that although CPOs must be implemented in accordance with the original purpose for which they are obtained, a new CPO may not be required in circumstances where a change in financial backers or co-developers has taken place and the original purpose of the CPO is still achievable.
This case is welcome news to councils which increasingly find their development partners cannot see such projects through to completion due to financial difficulties. So long as a council does not act unreasonably in implementing a CPO and its original purpose is still achievable, the council is able to seek alternative funding or development arrangements.