Compulsory Purchase Act 1965 – Railway bridge improvements effected over four-year period – Claimant’s hotel badly affected by noise, dust and vibration, as well as by restriction of access – Whether compensation claimable in respect of former – Whether compensation in respect of latter excluded because damage temporary – Whether, in either case, claimant had common law action but for statutory immunity
Between 1989 and 1994 (the relevant period), the respondent council, acting under statutory powers that incorporated the Compulsory Purchase Act 1965, carried out improvements to a railway bridge situated a short distance to the south of the appellant company’s hotel. No land belonging to the hotel was taken, but the company made a claim for compensation under section 10 of the 1965 Act on the basis that its land had been “injuriously affected by the execution of the works”. It was contended that, over much of the relevant period, the company’s use and enjoyment of the hotel had, to the detriment of its business, been interfered with by: (i) hoardings that obscured the hotel and restricted access thereto; (ii) the obstruction of roads and pavements leading to the hotel; and (iii) noise, dust and vibration (NDV) while the work was in progress.
Following a reference to the Lands Tribunal, three questions were formulated for the court, and decided adversely to the company by the Court of Appeal. As eventually considered by the House of Lords, with some reformulation, the issues were: (i) whether the claim for damage caused by NDV could be the subject of compensation; (ii) whether it was material that, but for the council’s statutory authority, the company would have had a claim in public nuisance for the NDV damage; and (iii) whether damage to the value of the land, caused by interference with access to the hotel during construction, was excluded from compensation because the damage was temporary.
Held: The company’s appeal was allowed in part.
1. Somewhat unusually, section 10 of the 1965 Act obliged the court to apply the case law under the corresponding section of the Lands Clauses Consolidation Act 1845. However, it was pertinent to note that the relevant authorities disclosed a deep difference of judicial opinion on whether much of the environmental cost of revolutionising the national transport system was to be borne by the general public (see, for example, the view of Erle CJ in Ricket v Metropolitan Railway Co (1865) 5 B&S 149) or by the utility in question: see, for example, the judgment of Baron Bramwell in Hammersmith & City Railway Co v Brand (1867) LR 2 QB 223.
2. Damage to the amenity of the land that had the effect of causing personal discomfort, and thereby reducing the value of the land, was just as much damage to the land as physical injury: see Metropolitan Board of Works v McCarthy (1874) LR 7 HL 243 and Caledonian Railway Co v Walker’s Trustees (1882) 7 App Cas 259. However, such damage, as instanced by the NDV damage, could not be the subject of a claim under the 1965 Act. The reason for its exclusion did not lie in the lack of physical damage, but in the interaction of basic principles of statutory compensation. These required, inter alia, that for the purpose of the Act the damage must have been: (a) caused by the lawful exercise of statutory powers (see Imperial Gas Light & Coke Co v Broadbent (1859) 7 HL Cas 600); and (b) of a kind actionable at common law but for the statutory protection (see Re Penny and South Eastern Railway Co (1857) 7 E&B 660).
3. Where discomfort had been caused by building or demolition operations, a common law action could not be brought if the works had been reasonably carried out and all reasonable steps had been taken to minimise inconvenience to neighbours: see Andreae v Selfridge & Co Ltd [1938] Ch 1. A statutory immunity, on the other hand, could not extend to works that had been carried out without “all reasonable regard and care for the interests of other persons”: see per Lord Wilberforce in Allen v Gulf Oil Refining Ltd [1981] AC 1001 at p1011. The Lands Tribunal had, accordingly, correctly concluded that the fulfilment of one of the compensation requirements (as stated in (a) and (b) above) necessarily ruled out the fulfilment of the other. It followed that a landowner, wishing to recover for damage arising out of personal discomfort, could not do so without taking ordinary proceedings in nuisance, with the consequent burden of showing that the undertaker had exceeded its statutory powers.
4. As regards the second issue, the company did not escape from the above dilemma by arguing that, but for the statutory immunity, the NDV would have grounded a claim in public nuisance. The council, as owners of the soil of the highway, were entitled to carry on works there in the same way as any other landowner; hence, actionability depended upon the same considerations as would apply to any other works undertaken by such a landowner. The interference (by NDV) with passage on the highway did not create a parasitic claim to compensation for damage unrelated to such passage.
5. The damage occasioned by the restriction of access to and from the highway was not concerned with personal discomfort, and, accordingly, was not subject to the give-and-take considerations applicable to the NDV damage. It followed that statute had legitimated what would otherwise have been actionable as a public nuisance, thus giving rise to a claim for compensation. For that purpose, it was agreed that the value of the hotel had to be ascertained as at the date of completion of the works. However, contrary to the view taken by the Court of Appeal, the fixing of that date did not permit the council to claim that little or no loss had been sustained for the purpose of compensation. There was nothing in section 10 of the Act to require compensation to be calculated by subtracting the value, so ascertained, from the value that the hotel would have possessed if not injuriously affected. Moreover, there was strong authority for allowing compensation for a temporary loss: see Ford v Metropolitan and District Railway (1886) 17 QBD 12, as considered by Fletcher Moulton LJ in Lingke v Christchurch Corporation [1912] 3 KB 595 at p607. While it was true that a compensation claim could not be made for loss of profits as such (see Argyle Motors (Birkenhead) Ltd v Birkenhead Corporation [1975] AC 99), that did not prevent the claimant from showing that the letting value of premises had been adversely affected by an interference with his business: see per Lord Westbury in Ricket v Metropolitan Railway Co (1867) LR 2 HL 175 at p204 and per Lord Wilberforce in Argyle Motors (supra) at pp130-131.
Joseph Harper QC and Barry Denyer-Green (instructed by Caplans) appeared for the claimants; David Mole QC and Paul Stinchcombe (instructed by the solicitor to Harrow London Borough Council) represented the council.
Alan Cooklin, barrister
