Kitchen v Kent County Council

Compensation – Costs – Injurious affection – Claimant making reference for compensation under section 204 of Housing and Planning Act 2016 – Preliminary issue arising as to jurisdiction of Upper Tribunal – Whether claim being for compensation for injurious affection – Whether tribunal having jurisdiction to award costs under in reference under rule 10 of Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 – Preliminary issue determined accordingly The claimant argued that the value of his home at The Homestead, Seal Drive, Sevenoaks, had been diminished as a result of the construction of flood-lit sports pitches for a new school on land bound by restrictive covenants which he could have relied on to prevent the development had it not been for the effect of section 203 of the Housing and Planning Act 2016. He made a reference for compensation under section 204. Section 203(1) enabled local authorities to override easements and similar rights. It provided that a person might carry out certain building or maintenance work even if it involved interfering with a relevant right or interest, or breaching a restriction as to user of land arising by virtue of a contract or an obligation under a conservation covenant. “Work” was described in section 203(2) as work for which there was planning consent, carried out by a public authority for the purposes for which planning permission was granted, on land which the authority could acquire compulsorily. A relevant right or interest was defined in section 205(1) as any easement, liberty, privilege, right or advantage annexed to land and adversely affecting other land (including any natural right to support). Section 204 provided for compensation for interference with an easement or restrictive covenant which had been overridden by section 203, where a local authority had been authorised to undertake development. The tribunal was asked to determine, as a preliminary issue, whether it had jurisdiction to make an award of costs. Held: The preliminary issue was determined accordingly. (1) The policy underlying section 203 was the same as that behind section 237 of the Town and Country Planning Act 1990. The statutory objective was that, provided the work was done in accordance with planning permission, and subject to payment of compensation, the local authority should be permitted to develop its land in the manner in which it, acting bona fide, considered would best serve the public interest. To that end, a local authority was permitted to interfere with third-party rights. A balance had to be struck between giving local authorities freedom to develop land held for planning purposes, and the need to protect the interests of third parties whose rights were interfered with by local authority development. Parliament had decided to give local authorities the right to develop their land and interfere with their party rights, but on the basis that work was done in accordance with planning permission (with the protection inherited in the planning process), and that third parties affected were entitled to compensation under section 237(4): R v City of London Corporation & Royal Mutual Insurance Society, ex parte Mystery of the Barbers [1997] 95 LGR 459 followed. (2) Section 204(1) of the 2016 Act concerned “compensation for overridden easements etc”. It provided for the payment of compensation for any interference with a relevant right or interest or breach of a restriction that was authorised by section 203(1). The compensation was to be calculated on the same basis as compensation payable under sections 7 and 10 of the Compulsory Purchase Act 1965 (section 204(2)), and any dispute about the compensation payable was to be determined by the Upper Tribunal (section 204(5)). References under section 204 were uncommon and were not mentioned specifically in rule 10 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. Whether the tribunal had a general power to award costs in such a reference (as opposed to a power to make an order for wasted costs or where a party behaved unreasonably under rule 10(3)) therefore depended on whether the case fell within one of the categories in rule 10(6). Rule 10(6)(b) provided that the tribunal could make an award of costs in proceedings for “injurious affection” of land.  (3) The root meaning of “injurious affection” was injury to land which had not been compulsorily acquired but which had nevertheless been adversely affected by works carried out elsewhere. Provision was made for compensation for injurious affection by sections 7 and 10 of the 1965 Act. By section 204(2) of the 2016 Act, compensation for any breach of a restriction authorised by section 203(1)(b)(i) was to be calculated on the same basis as compensation payable under those sections. Section 7 was not directly relevant to the present case. Section 10 made further provision for compensation for injurious affection and provided that: “(1) If any person claims compensation in respect of any land, or any interest in land, which has been taken for or injuriously affected by the execution of the works, and for which the acquiring authority have not made satisfaction under the provisions of this Act, or of the special Act, any dispute arising in relation to the compensation shall be referred to and determined by the [Upper Tribunal]”: Wildtree Hotels Ltd v Harrow London Borough Council [2000] 2 EGLR 5; [2001] 2 AC 1 considered. (4) The claimant’s case was that his land had been damaged and its value reduced. To deny a claimant costs where compensation was assessed on the same basis as injurious affection, where costs could be awarded, was obtuse. That equated to the present situation. Accordingly, proceedings under section 204 were proceedings for compensation for injurious affection and the tribunal had the jurisdiction to award costs in this case. The effect of section 204 was to create a situation which could occur where a covenant was modified under section 84 of the Law of Property Act 1925, namely that a party’s property rights were altered in favour of another party. In those circumstances, the tribunal could also determine compensation for the loss or modification of the rights. The basis of that compensation was often calculated by reference to the diminution in value of the property affected, in other words, by the same means by which injurious affection was assessed. The 2010 Rules mandated that the tribunal had jurisdiction to award costs in cases conducted under section 84 and it would be irrational for a costs jurisdiction to be available in those circumstances and not in another where the effect could be identical: Midtown Ltd v City of London Real Property Company Ltd [2005] 1 EGLR 65 and Holliday v Breckland District Council [2012] 3 EGLR 95 considered. The decision was made on written representations Eileen O’Grady, barrister Click here to read a transcript of Kitchen v Kent County Council