Compulsory purchase order — Owner-occupier supplement — Whether recipient entitled to interest on supplement — County court holding that interest was not payable — Court of Appeal allowing appeal against that decision
The appellant (“S”) had the equitable interest in 23 Weston Street, Bolton, Lancashire. A compulsory purchase order was made by the council following a resolution by the council declaring the area to be a clearance area under Part III of the Housing Act 1957. It was confirmed by the Secretary of State on March 11 1985. S had occupied the property throughout the relevant qualifying period and was entitled to the owner-occupier supplement on giving up vacant possession on November 28 1985 under section 68 and Schedule 5 of the Housing Act 1969. The supplement was paid to S by instalments in 1991 and 1992, the delay in payment arising because the council for a long time disputed S’s right to the supplement. A question arose whether S was entitled to interest upon the supplement. If interest was payable the amount was substantial. The county court held that interest was not payable, but S appealed.
Held The appeal was allowed.
1. The entitlement to interest upon compensation arose from section 11(1) of the Compulsory Purchase Act 1965 and applied to general vesting declaration cases by the Compulsory Purchase (Vesting Declarations) Act 1981.
2. It was common ground that there was no specific statutory provision that the owner-occupier supplement carried interest; and that some payments for the benefit of persons displaced from land, such as home loss payments under section 29 of the Land Compensation Act 1973, did not attract interest.
3. However, the object of Schedule 5 was to confer an entitlement upon owner-occupiers of unfit houses affected by slum clearance to a supplementary payment bridging the gap between site and market value. If certain conditions were satisfied, a payment was made which represented the difference between the site value of the relevant interest in the house and its full compulsory purchase value.
4. The owner-occupier supplement was not “compensation” within section 59(1) of the Housing Act 1957. Rather it was a “payment” made under section 68(1) and Schedule 5 of the 1969 Act. However, the amount of such payment “shall be determined (in default of agreement) as if it were compensation” and “the payment shall be subject to subparagraph (3) of this paragraph, be dealt with as if it were such compensation”: Schedule 5, para 3(2).
5. The effect of those provisions was to refer the assessment of the amount of the payment to the Lands Tribunal, in default of agreement, and both the Lands Tribunal and the parties were enjoined to deal with the payment as if it were “compensation” properly so called.
6. The effect, whether the amount was awarded or agreed, was that the payment, treated as compensation, carried interest by virtue of section 11(1) of the Compulsory Purchase Act 1965.
Anthony Elleray QC and Richard Quenby (instructed by Akermans, of Worthing) appeared for the appellant; Stephen Sauvain QC and Alan Evans (instructed by the solicitor to Bolton Metropolitan Borough Council) appeared for the council.
