Roadworks – Compensation – Injurious affection – Highway authority executing works near motorway service area under statutory powers – Whether operator of service area entitled to compensation for loss arising from temporary and permanent stopping up and realignment of highway – Appeal allowed
The respondent operated a motorway services area (the MSA) under a sublease from Esso Petroleum Co Ltd. The MSA lay close to junction 10 on the M40 (the Ardley interchange). During 2001 and 2002, alterations were carried out to the junction, which involved general improvements and the stopping up and realignment of various sections of highways.
The respondent complained that the new arrangement had substantially diminished the value of its site as a service station because the routes to it were longer and less direct. Accordingly, it sought compensation for injurious affection, under section 10 of the Compulsory Purchase Act 1965, for the diminution in value of its leasehold interest. The claim was based upon (i) temporary loss owing to obstructions and disruption during the works; and (ii) permanent loss since the MSA was less accessible and/or convenient for, or attractive to, customers using the interchange.
The Lands Tribunal decided, as a preliminary issue, that if the respondent had suffered loss because of the works, it was entitled to compensation under section 10 of the 1965 Act.
The appellant secretary of state appealed, contending that the respondent’s loss (if any) arose from the stopping-up of the slip roads, which did not constitute part of “the works” for the purposes of section 10. Furthermore, the respondent had not suffered particular damage that would have been wrongful but for the protection afforded by statutory powers.
Held: The appeal was allowed.
The works included all the works of highway construction and improvement that were to be carried out. The inclusion of compulsory powers in the package of orders for the scheme, for at least part of the land required, was enough to trigger the application of section 10 to the works as a whole: Jolliffe v Exeter Corporation [1967] 1 WLR 993 and Wildtree Hotels Ltd v Harrow London Borough Council [2000] 2 EGLR 5; [2000] 31 EG 85 considered.
The obstructions were sufficiently local, and the relationship between the MSA and the motorway sufficiently special, to provide at least the starting point for a claim to particular damage. However, the special relationship was part only of the test. In the present case, the immediate accesses to the MSA remained substantially unaffected. The loss resulted not from any direct obstructions to those accesses, but from the rearrangement of the entire junction, including the interposition of the new roundabout: Wagstaff v Department of the Environment, Transport and the Regions [1999] 2 EGLR 108; [1999] 21 EG 137 considered.
The works were part of a project for the general improvement of the highway, which was carried out under the general discretion of the highway authority. The Highways Acts did not give adjoining owners, even those whose businesses were directly linked to traffic needs, any guarantee or expectation that the highway system in their immediate area, or the flow of traffic, would remain unchanged.
Traffic conditions in a particular area might be affected by all kinds of traffic orders or works properly carried out under the management powers of the highway authority. Such changes might be advantageous or not to a particular traffic-based operation. They did not, in themselves, give rise to a claim for compensation, but had to be accepted as part of ordinary business risk.
Accordingly, a claim for compensation under section 10 had not been established in respect of the permanent stopping-up orders. The matter would be remitted to the tribunal to consider and determine whether a claim might be made for the effect of temporary closures during the works.
David Holgate QC, Timothy Mould QC and Zoe Leventhal (instructed by the Treasury Solicitor) appeared for the appellant; Craig Howell Williams and Richard Honey (instructed by DLA Piper, of Birmingham) appeared for the respondent.
Eileen O’Grady, barrister
