There was to be a development of six flats on land subject to a restrictive covenant. The developer began without a modification being sought. The benefit of the covenant was attached to adjoining land owned by the local authority, which they intended for a development of accommodation for the aged. The tribunal had refused the application under the limited benefit ground (regarding the impact as less than ‘serious’ but ‘of real importance’), but allowed it under the public interest ground.
Held: The measure of compensation payable on the compulsory acquisition of an easement is the diminution in value of the interest affected and not by reference to a reasonable price that could be extracted for the giving up of the right.
Lord Denning MR said: ‘So, we come back to the question: what is the basis or proper basis of compensation? It is simply to make up ‘for [the] loss or disadvantage suffered’ by the borough council. There is no method prescribed by the Act by which it is to be assessed; it is essentially a question of quantum. It is however, to be assessed for loss of amenities, loss of view and so forth, which are things which it is hard to assess in terms of money . . It is similar to compensation for pain and suffering.’ He referred to the Wrotham Park case and said: ‘The President looked at it in much the same way. He took a higher percentage. Instead of 5% he took 50%. He took the realisable development value and split it equally. That was, he said, fair to the parties. It was a method by which he was getting at the loss or disadvantage. I see no error of law in it. The loss or disadvantage is an intangible matter which is incapable of exact calculation in money, and he took a fair and sensible way of assessing it.’
Stephenson LJ held that the proposed way of calculating compensation was not contrary to the Act or to authority. The modification had resulted in the council losing a benefit of ‘substantial value or advantage’ for which they were entitled to ‘substantial compensation’.
Denning MR, Stephenson and Geoffrey Lane LJJ
[1983] 52 PandCR 278
England and Wales
Citing:
Cited – Wrotham Park Estate Ltd v Parkside Homes Ltd ChD 1974
55 houses had been built by the defendant, knowingly in breach of a restrictive covenant, imposed for the benefit of an estate, and in the face of objections by the claimant.
Held: The restrictive covenant not to develop other than in . .
Cited by:
Cited – Wrotham Park Settled Estates v Hertsmere Borough Council CA 12-Apr-1993
Land had been purchased under compulsory purchase powers. It had been subject to restrictive covenants in favour of neighbouring land which would have prevented the development now implemented. The question was how the compensation should be . .
Cited – Midtown Ltd v City of London Real Property Company Ltd ChD 20-Jan-2005
Tenants occupied land next to land which was to be developed after compulsory acquisition. The tenants and the landlords asserted a right of light over the land, and sought an injunction to prevent the development. The developer denied that any . .
Cited – Winter and Another v Traditional and Contemporary Contracts Ltd CA 7-Nov-2007
The land-owners applied for a variation of a restrictive covenant to allow them to put a second house on their plot. They had bought out the right of the original builder, but a neighbour also had the benefit of the covenant. They now appealed the . .
Lists of cited by and citing cases may be incomplete.
Updated: 14 October 2021; Ref: scu.186378