Compensation — Notice to treat — Property subject to tenancies — Tenants leaving after notice to treat — Whether freehold interest valued subject to tenancies — Whether tenants rehoused by acquiring authority — Whether Land Compensation Act 1973, section 50 applied
The claimant is the owner of 249 Newham Way, Canning Town, London E16, a property that was divided into two flats. On August 9 1985 the acquiring authority served a notice to treat on the claimant pursuant to a compulsory purchase order confirmed earlier that year. On February 1 1986, the tenants of one of the flats were rehoused by the authority in council property and on July 28 1986 the tenants of the other flat were rehoused under the London Area Mobility Scheme by Barking London Borough Council. On December 1 1987 the acquiring authority served a notice of entry on the claimant. The claimant contended that he was entitled to compensation based on the vacant possession value of the property at the expiration of the notice of entry as neither set of tenants was rehoused as a consequence of compulsory acquisition but was in one case rehoused voluntarily by the authority because of the condition of the property and in the other case was rehoused by another authority. The authority’s position was that section 50(2) of the Land Compensation Act 1973 applied as the tenants were “displaced from residential accommodation on any land in consequence of the acquisition of the land by an authority possessing compulsory purchase powers” under section 39(1a) of the Act.
Held In all the circumstances, and even in the absence of any formal notice to them, the tenants were compelled to leave in consequence of the acquisition whatever the state of their knowledge about the circumstances might have been. The authority had a duty under section 39 of the 1973 Act to “secure” the rehousing of the tenants. In respect of both sets of tenants, the authority can be said to have secured their rehousing. Although the authority did not serve a notice of entry until after the tenants had vacated the property, and therefore it could not be said that the tenants were actually ousted by the authority, that did not matter, as compulsory purchase is a process and not an event: the tenants were displaced in consequence of the acquisition notwithstanding that as at the dates when they were rehoused the authority was not then entitled to take possession of the property. By virtue of section 50(2) of the 1973 Act the actual date of possession is not relevant in assessing the value of property as the authority are deemed to have taken possession on the date or dates when the tenants actually gave up possession. Accordingly the claimant was entitled only to compensation of £12,500 on a sitting tenant basis.
Prasad v Wolverhampton Borough Council
[1983] Ch 333 applied.
Harry Sales (instructed by Michael Barton & Co, of Kingsbridge Devon) appeared for the claimant; and A S Snelson (instructed by the solicitor to Newham London Borough Council) appeared for the acquiring authority.
