Compulsory Purchase Damages limited to Actual Loss
Rule (6) was designed to preserve the effect of the 19th Century case-law under the 1845 Act, by which personal loss caused by the compulsory acquisition was treated as part of the value to the owner of the land: ‘the owner in a proper case – that is, in a case where he really does incur a loss of money by disturbance due to the taking over and beyond the loss for which he is to be reimbursed in respect of the land taken – is entitled, because it has to do with the land, to have that element of the loss taken into the reckoning of the fair price of the land, as has been held by the Courts from a very early stage.’ Lord Justice Scott explained the effect of section 68: ‘There is a third kind [of compensation] given by the [1845] Act, namely by section 68, but that has nothing to do with compulsory acquisition. It is a remedy for injuries caused by the works authorised by the Act to the lands of an owner who has had none of the lands taken in that locality. The remedy is given because Parliament, by authorising the works, has prevented damage caused by them from being actionable, and the compensation is given as a substitute for damages at law.’ Scott LJ referred to the: ‘the old sympathetic hypothesis of the unwilling seller and the willing buyer which underlay judicial interpretation of the Act of 1845.’
Sir Wilfrid Greene MR said: ‘In the present case the respondent was occupying for farming purposes land which had a value far higher than that of agricultural land. In other words, he was putting the land to a use which, economically speaking, was not its best use, a thing which he was, of course, perfectly entitled to do. The result of the compulsory purchase will be to give him a sum equal to the true economic value of the land as building land, and he thus will realize from the land a sum which never could have been realized on the basis of agricultural user. Now he is claiming that the land from which he is being expropriated is for the purpose of valuation to be treated as building land and for the purpose of disturbance as agricultural land, and he says that the sum properly payable to him for the loss of his land is (a) its value as building land plus (b) a sum for disturbance of his farming business. It appears to me that, subject to a qualification which I will mention later, these claims are inconsistent with one another. He can only realize the building value in the market if he is willing to abandon his farming business to obtain the higher price. If he claims compensation for disturbance of his farming business, he is saying that he is not willing to abandon his farming business, that is, that he ought to be treated as a man who, but for the compulsory purchase, would have continued to farm the land, and, therefore, could not have realized the building value.’
Scott LJ, Sir Wilfrid Greene MR)
[1941] 2 KB 26, [1941] 1 All ER 480
Land Clauses Consolidation Act 1845 68
England and Wales
Cited by:
Cited – Waters and others v Welsh Development Agency HL 29-Apr-2004
Land was to be compulsorily purchased. A large development required the land to be used to create a nature reserve. The question was how and if at all the value of the overall scheme should be considered when assessing the compensation for this . .
Cited – Ryde International Plc v London Regional Transport CA 5-Mar-2004
The landowner had developed land which was then made the subject of compulsory purchase. The court was asked how the compensation was to be calculated. The landowner expected to sell the development as a whole. The respondent argued that the profit . .
Cited – Moto Hospitality Ltd v Secretary of State for Transport CA 26-Jul-2007
The company sought damages to its business on a motorway service station when works closed an access road.
Held: The Secretary of State’s appeal succeeded. A claim for compensation under section 10 had not been established, at least in respect . .
Cited – Transport for London (London Underground Ltd) v Spirerose Ltd HL 30-Jul-2009
Compulsory Purchase Compensation – Land As it Is
The House considered the basis of calculation of compensation on the compulsory purchase of land without planning permission, but where permission would probably be granted. The appellant challenged the decision which had treated the probability as . .
Cited – Birmingham Corporation v West Midlands Baptist (Trust) Association Inc HL 1969
There had been a substantial delay of many years after the order for compulsory purchase was made, with a substantial increase in value after the service of the notice to treat.
Held: The physical condition of the reference land and its . .
Lists of cited by and citing cases may be incomplete.
Land, Damages
Leading Case
Updated: 02 November 2021; Ref: scu.196513