In Spirerose Ltd (in administration) v Transport for London (2008), land had been compulsorily purchased from the company by Transport for London. The land did not have plannning permission and nor was this a statutory assumption under the Land Compensation Act 1961. However, the tribunal had awarded £608,000 on the basis of the valuation of the land with planning permission for mixed-use development. The defendant contended that the correct value of the land, assessed on a hope-value basis only, was £400,000.
The case was an appeal of the defendant from the Lands Tribunal's decision, which favoured valuation on the full value of the assumed permission. The issue was on what basis the land should be valued and it centred on the application of the “no scheme” rule (Pointe Gourde Quarrying and Transport Co Ltd v SubIntendant of Crown Lands (1947)).
The Court of Appeal held that the tribunal had not erred and said that compensation should be assessed on the basis that the site had planning permission despite this not being a statutory assumption under the Land Compensation Act 1961. Strong policy arguments supported this decision and the court, in interpreting and applying the law, took the opportunity to remedy anomalies in the 1961 Act.
Carnwath LJ was at pains to draw attention to the inadequacy of the law in this area and called for its simplification. Alluding to the Law Commission's report on compulsory purchase, the recommendations of which were largely ignored by Parliament, he said:
"Greenweb is a stark warning that saving on law reform can be a very false economy. The present case ... is another demonstration of the human and financial cost of obscurity in the law."