The defendant local authority agreed to pay for the plaintiff’s premises in Liverpool at the price which would have been payable if the acquisition had been by way of compulsory purchase. The major part of the price constituted compensation for disturbance, which it was common ground fell to be assessed in the same way as if the disturbance were damage suffered at common law for trespass. The issue was whether the plaintiff was required to give credit for a regional development grant which it obtained from the national government as 22% of its costs of relocating in another part of Liverpool.
Held: It did not; it would be contrary to public policy to make the deduction because it would discourage those such as Palatine from locating to the development areas which it was the purpose of regional development grants to encourage. The plaintiff relied also on a difference between disturbance on compulsory purchase and the payment of a regional development grant: ‘Secondly, the loss caused by disturbance on compulsory purchase and the payment of regional development grant are different in kind. The loss on disturbance flowed from the fact that the landowner had been forced to give up occupation of his land and premises as a result of the acquisition of his interest. The regional development grant was paid in respect of part of the expenditure incurred when moving into new premises’
Sir John Donaldson MR said: ‘On the facts of this case, there is no dispute but that Palatine incurred disturbance expenditure in the amount, I think, of pounds 147,478, although the precise figures do not matter, and that this expenditure would not have been incurred but for the compulsory purchase. There is also no dispute that some of this expenditure attracted regional development grant. The sole question in dispute is whether the disturbance loss is properly to be regarded as being the disturbance expenditure as abated pro tanto by the regional development grant. If it is, then the amount of the compulsory purchase price can only take account of the disturbance expenditure so abated, as otherwise it would amount to over-compensation and offend against the principles enunciated in Horn’s case. If it is not, the compulsory purchase price can take account of the full disturbance expenditure since that, and not the abated sum, represents the disturbance loss.
It is at this point that it is necessary to take a closer look at the nature of a regional development grant, just as the House of Lords took a closer look at the nature of a police pension in Parry v. Cleaver [1970] AC 1. A regional development grant is not paid in compensation for dispossession or disturbance. It is payable whether or not there is a change of ownership or location, so long as it relates to expenditure of a relevant kind incurred in a relevant geographical area. It is therefore different in kind from compensation for disturbance. Indeed it is not compensation at all. Regional development grants are, as one of the Department of Industry booklets rightly describes them, ‘Incentives for Industry in the Areas for Expansion.’
This analysis leads me to conclude that in the instant, and similar, cases, (i) the person whose land is compulsorily acquired incurs disturbance expenditure in re-establishing his business, (ii) other things being equal, this expenditure is the same wherever he incurs it, (iii) this expenditure is prima facie the measure of his disturbance loss, (iv) his disturbance loss is not reduced, if he chooses to incur the disturbance expenditure in a particular area and is rewarded-not compensated-for so doing by the receipt of an incentive payment in the form of a regional development grant. In principle this is no different from the mail order customer who buys goods for pounds 100 and has his name entered in a draw for a prize of pounds 100. The goods will cost him pounds 100, whether he wins or loses. If he wins, he will have paid pounds 100 for the goods and received a prize of pounds 100. He will not have received the goods for nothing. ‘
Judges:
Sir John Donaldson MR, Glidewell LJ, May LJ
Citations:
[1986] 1 EGLR 19, (1985) 84 LGR 527, [1986] QB 335, [1986] 1 All ER 366, (1985) 52 P and CR 308, [1986] 2 WLR 285
Jurisdiction:
England and Wales
Cited by:
Cited – Gard Marine and Energy Ltd and Another v China National Chartering Company Ltd and Another SC 10-May-2017
The dispute followed the grounding of a tanker the Ocean Victory. The ship was working outside of a safe port requirement in the charterparty agreement. The contract required the purchase of insurance against maritime war and protection and . .
Lists of cited by and citing cases may be incomplete.
Contract, Land
Updated: 16 August 2022; Ref: scu.642154