Compulsory purchase order – Acquisition of rights over river for purpose of construction of road bridge – Award of compensation under section 5 of Land Compensation Act 1961 – Whether grants of river works licences under sections 66 and 67 of Port of London Act 1968 relevant as comparables – Whether statutory provisions materially different – Whether substantial compensation to be awarded
The claimant was a statutory body that was responsible for port and harbour services on the River Thames and its tributaries. The defendant acquiring authority, as the highway authority for certain strategic roads in London, made a compulsory purchase order (CPO) for the purposes of a road-widening scheme for the A13, which involved the construction of two new carriageways on bridges over the River Lea, adjacent to the existing Canning Town flyover. Under the CPO, the defendant acquired rights in perpetuity over a given area of the riverbed, banks and airspace for the purposes of maintenance and construction in connection with the existing and the two future bridges. The claimant retained ownership of the riverbed and soil. None of the supporting piers of the bridges, as constructed, encroached upon the claimant’s land, although a fender was installed to the reinforced riverbanks to protect the old and new bridge structures.
The claimant claimed compensation of £117,000. It contended that the sum represented the open market value of the rights acquired by the defendant, calculated in accordance with section 5 of the Land Compensation Act 1961. It put forward as comparables not only transactions under section 5 but also those involving the grant of river works licences under sections 66 of the Port of London Act 1968, for which the consideration had been calculated in accordance with section 67 of that Act. The defendant contended for a nominal compensation of £50, submitting that the application of section 67 of the 1968 Act and settlements negotiated under it were inappropriate as comparables in compulsory acquisition cases, since the valuation assumptions under the two statutory provisions were different.
Decision: Compensation of £50 was awarded.
There were material distinctions between the assumptions to be made under section 5 of the 1961 Act and section 67 of the 1968 Act. Although both assumed a transaction between a willing buyer and a willing seller, the matters that had to be disregarded on valuations under the two provisions were different. By r (3) of section 5 of the 1961 Act, the special suitability of the land for a particular purpose was not to be taken into account if that purpose was one to which the land could only applied be in the exercise of statutory powers, or one for which there was no market other than the requirements of an acquiring authority that had compulsory purchase powers. Moreover, under the Pointe Gourde principle, any increase or decrease in value that was entirely attributable to the scheme for which the property was being acquired should be disregarded. By contrast, on a valuation under section 67 of the 1968 Act, the calculation of the “best consideration” that could reasonably be obtained was required to have regard to “all the circumstance of the case”, which included any value created by the proposals of the party seeking the rights. Accordingly, any special suitability and any additional value that could be attributed to the scheme was to be taken into account.
In the instant case, r (3) applied to exclude any value of the land to the defendant that was attributable to its special suitability for the construction of the bridges. Thus, it was not possible to rely either upon comparables negotiated under section 67 of the 1968 Act or those negotiated by convention under section 5 by reference to earlier section 67 settlements. Since no market existed for the rights in question in the no-scheme world, their value was nominal and should be assessed at £50.
Christopher Lewsley (instructed by the legal department of the Port of London Authority) appeared for the claimant; Graeme Keen (instructed by Eversheds LLP) appeared for the acquiring authority.
Sally Dobson, barrister