The law of compulsory purchase is often perceived as a complex and difficult area of law. Over the last year or so there have been a number of decisions coming from the Upper Tribunal (Lands Chamber) (the “Tribunal”) and these decisions, together with those from appeal Courts, continue to shape and develop this area of law. In this review, we look at some of the more significant decisions on disturbance compensation.

Taff v Highways Agency [2009] UKUT 128 (LC)

Mr Taff was the tenant of business premises used as a scrap yard. The Highways Agency compulsorily acquired around half of his land. Whilst Mr Taff had planning permission for his use of the land he did not (rather crucially) have a valuable waste management licence. Mr Taff claimed extinguishment for the waste management business that operated from the acquired land.

Rule 4 of Section 5 to the Land Compensation Act 1961 (the “LCA 1961”) disregards any value of land which results from an unlawful use. As Mr Taff did not have a waste management licence, the Highways Agency argued Mr Taff’s use could not be taken into account when assessing compensation. After considering the point as a preliminary issue, the Tribunal decided that:

  • the use of the land, to the extent it was covered by certificates of lawful use and the planning permission, should be taken into account when assessing compensation, but  
  • given the lack of a waste management licence, any claim for disturbance based upon that part of the business which could be restrained was irrecoverable.  

Pattle v Secretary of State for Transport [2009] UKUT 141(LC)  

Mr Pattle sought rent he allegedly lost as a result of the Channel Tunnel Rail Link Scheme. The Tribunal therefore needed to determine whether such losses (assuming they were caused by the scheme) were recoverable. After hearing submissions, the Tribunal decided (based on this assumption) that a claim for lost rent before the valuation date did not fall within compensation for the value of land under Rule 2. It was therefore recoverable.

The Tribunal also decided that where loss is caused by general blight, as opposed to the scheme, it cannot be recovered. This leaves an interesting issues of causation live before the Tribunal. It is often difficult to decide what has caused loss: an area’s general blight or the scheme.

Solartrack plc v London Development Agency [2009] UKUT 242 (LC)

This was a complex matter where Hammonds acted for the London Development Agency. In March 2003, the London Development Agency agreed to buy freehold premises for £445,000 and entered into a sale contract with Solartrack. The London Development Agency made a compulsory purchase order in October 2003 and executed a General Vesting Declaration in December 2005. The freehold was excluded from the CPO and the GVD.

After hearing evidence from the parties, the Tribunal decided that at a preliminary hearing that:

  • there had been no transfer of any interest in the underlease from an associated company to Solartrack. Indeed, the letters purporting to support this were “created … in an attempt to deceive the acquiring authority” and the “continued reliance upon them in the proceedings … [was] a flagrant attempt … to mislead the Tribunal”;  
  • the Tribunal could not determine compensation for the freehold interest in land. It had not been compulsorily acquired so the Tribunal had no jurisdiction;  
  • the Tribunal could determine compensation for disturbance as the effect of the contract of sale was to give Solartrack a claim for disturbance compensation for it and any loss suffered by its associated companies (relying upon the principle in DHN Food Distributors v Tower Hamlets London Borough Council1)  

These decisions are useful reminders for practitioners of the principles applied by the Tribunal. The aim of compensation for a CPO is to provide a claimant with fair compensation: no less and no more. Evidence is the lesson to be learnt from these decisions: it is needed to support a loss, it must be tested by practitioners before it is put before the Tribunal and evidence of loss resulting from an unlawful practice will be irrecoverable.