Land suitable for construction of a reservoir was the subject of a compulsory purchase for that purpose. The circumstances made it very unlikely that anyone other than the Water Board would have wanted, or been able, to construct the reservoir and exploit the water collected in it. In these circumstances, and bearing in mind the ‘value to the owner’ principle, could the site’s suitability for use as a reservoir enhance its value to the owner for which the Water Board should pay?
Held: When assessing compensation on the compulsory purchase of land, the value to the owner, as distinct from the value to the purchaser, is ‘to be estimated as it stood before the grant of the compulsory powers’. This was an absolute rule. ‘The owner is only to receive compensation based upon the market value of his lands as they stood before the scheme was authorized by which they are put to public uses.’ Where the special adaptability of land gives the land a special value which exists only for a particular purchaser with compulsory powers, that value cannot be taken into consideration when fixing the price. It is otherwise where the special value exists also for other possible purchasers so as to create a real though limited market for that special value.
Fletcher Moulton LJ had a restrictive approach: ‘The scheme which authorises the new reservoir only entitles the owner of the land to receive as compensation the value of the land unenhanced by that scheme, and, unless its situation and peculiarities create a market for it as a reservoir site for which other possible bidders exist, I do not think that the single possible purchaser that has obtained parliamentary powers can be made to pay a price based on special suitability merely by reason of the fact that it was easy to foresee that the situation of the land would lead to compulsory powers being some day obtained to purchase it.’
Fletcher Moulton LJ, Vaughan Williams LJ
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England and Wales
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 . .
Disapproved in part – Raja Vyricherla Narayana Gajapathiraju v Revenue Divisional Officer, Vizagapatam PC 23-Feb-1939
Land adjoining a harbour at Vizagapatam which at that time was malarial was to be valued for compulsory purchase. The land contained a spring of clean water. The only potential purchaser of the special adaptability of the land as a water supply was . .
Adopted – Cedars Rapids Manufacturing and Power Co v Lacoste PC 1914
Land at the St Lawrence river was to be valued for a compulsory purchase.
Held: Value does not mean the value of ‘the realized undertaking as it exists in the hands of the undertaker’. It means the price which possible undertakers would give. . .
Applied – Fraser v City of Fraserville PC 1917
One ground on which the arbitrators’ valuation award on a compulsory purchase, was set aside was that, in valuing the falls of a river and adjacent land acquired for electricity generation purposes, the arbitrators had taken into account the . .
Cited – Earl Cadogan v Pitts and Wang; Similar HL 10-Dec-2008
The House considered the basis of valuation on an acquisition of the freehold reversion of a lease under the 1967 Act of the three elements, the rent, vacant possession after the lease, and the marriage or hope value of the two interests when . .
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 . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.196511