Homes and Communities Agency v J S Bloor (Wilmslow) Ltd - (22 Feb 2017)

Application of general law may produce a more favourable result for claimant than statutory planning assumptions

Land Acquisition

Instant appeal concerns assessment of compensation for compulsory acquisition of two parcels of grazing land, formerly owned by present Appellant (“claimants”). They were part of a much larger area of some 420 acres (170ha) acquired under the North West Development Agency (Kingsway Business Park, Rochdale) Compulsory Purchase Order 2002 (“the CPO”), for development of the so-called Kingsway Business Park (“KBP”). Responsibility for payment of compensation now rests with Homes and Communities Agency, Respondent to present appeal (“the authority”).

The appeal raises questions concerning the so-called Pointe-Gourde rule (Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565), or “no-scheme” rule: that is, the rule that compensation for compulsory acquisition is to be assessed disregarding any increase or decrease in value solely attributable to the underlying scheme of the acquiring authority. The law is to be found in the Land Compensation Act 1961 as explained and expanded by judicial interpretation. The particular issue concerns the relationship between the general provisions for the disregard of the scheme, and more specific provisions relating to planning assumptions.

Planning potential of the reference land was to be assessed “without regard to the development scheme and its underlying policies”. Tribunal were clearly entitled to regard the underlying policies, including the allocation in the development plan, as potentially relevant also to the prospect of development apart from the KBP scheme. The assessment of their significance in the no KBP universe was pre-eminently a matter for them. Tribunal, properly took account of the pattern of development as seen by them on the ground, and long history of identification of this land for substantial development. They did not ignore potential policy objections, such as under PPG3 or policy EC/6, but took the view that they would not have sufficient weight to rule out possibility of development in the absence of the KBP scheme. That reasoning discloses no error of law.

Submission, that tribunal erred in not treating planning status of land as conclusively fixed by reference to their applications of sections 14 to 16 of Land Compensation Act 1961. Court of Appeal was right to rejecting the submission, which is supported neither by statutory provisions nor by authority. Indeed, the principle that, statutory assumptions are not exclusive is confirmed by the 1961 Act itself in section 14(3). That provides in terms that the statutory planning assumptions do not imply any presumption against development which might otherwise fall to be taken into account. The statutory assumptions work only in favour of the claimant, not against him. They do not deprive him of the right to argue for prospective value under other provisions or the general law.

The right to claim for potential development value is long-established. It is in any event well-established that, application of the Pointe Gourde rule itself may result in changes to the assumed planning status of the subject land. Thus, in Melwood Units Pty Ltd v Main Roads Comr [1979] AC 426, where land was acquired for an expressway, the Privy Council accepted that compensation should reflect the fact that but for the expressway project permission would have been obtained to develop the whole area for a drive-in shopping centre. That case, although decided under a different statutory code, has long been accepted as authoritative in this jurisdiction. It was cited without criticism in Spirerose . Nor is there anything in section 6 to indicate that a more restrictive approach should be applied under the statutory disregards.

It has also long been accepted that application of general law may produce a more favourable result for claimant than statutory planning assumptions. The Upper Tribunal’s decision in present case is a powerful illustration of potential complexities generated by the 1961 Act in its un-amended form. It is to be hoped that amendments currently before Parliament will be approved, and that taken with the 2011 amendments they will have their desired effect of simplifying the exercise for the future. Order of the Court of Appeal set aside, appeal allowed.

Relevant : Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565), Melwood Units Pty Ltd v Main Roads Comr [1979] AC 426

Tags : ACQUISITION COMPENSATION DETERMINATION