Compulsory purchase – Compensation – Land Compensation Act 1961 – Claimant company seeking additional compensation following compulsory acquisition of land – Resolution made to grant planning permission — Preliminary issues being determined – Whether planning permission deemed to be granted – Whether previous planning decision granting permission for the purpose of section 23-25 of 1961 Act – Reference dismissed
The claimant company made a reference to the Upper Tribunal seeking compensation of approximately £8m under the Land Compensation Act 1961 following the compulsory acquisition of the St George’s Works, St George’s Quay, Lancaster from its subsidiary company (TNL), by the defendant local authority.
TNL’s own entitlement to compensation had already been determined as just over £2m which was not enough to match a previous offer of compensation by the defendant. Therefore, TNL was ordered to pay most of the costs of the original reference and it went into administration: Thomas Newall Ltd v Lancaster City Council [2010] UKUT 2 (LC); [2011] UKUT 437 (LC).
The claimant purchased the right to bring any remaining claims arising from the acquisition of the property from the administrators and brought the present application under section 23 of the 1961 Act, which entitled a person to claim additional compensation if: “before the end of… ten years beginning with the date of completion, a planning decision is made granting planning permission for… additional development of any of the land”.
By section 25, the circumstances which triggered that right were enlarged to include a variety of different cases in which planning permission was granted or “deemed to be granted” other than on an application to which section 23 would apply.
On 24 January 2017, following the completion of section 106 agreement, planning permission was granted for the development of student housing. That planning permission was granted outside the ten-year period from the date of completion of the compulsory acquisition which expired on 10 November 2016.
The tribunal directed that two preliminary issues should be determined: (i) whether it was arguable that planning permission might be deemed to have been granted within the relevant ten-year period; and (ii) whether a previous decision of the defendant on 19 September 2016 that planning permission be granted, subject to completion of a section 106 agreement, was a planning decision granting planning permission subject to conditions within section 23(1)(a) and 29(2)(a) of the 1961 Act. The reference was determined on written representations.
Held: The reference was dismissed.
(1) Section 23(1)(a) of the 1961 Act made it a condition of a claim for further compensation that there should have been “a planning decision” granting “planning permission” for “additional development”, and that the decision must have been made within ten years beginning with the “date of completion”.
Where, as in the present reference, land had been acquired for the purposes of any of the functions of a local authority, the term “additional development” was defined in section 29(1) as meaning any development of the land other than development for the purposes of the functions for which the local authority acquired it. The “date of completion” was defined in section 29(1) as “the date on which the acquisition or sale is completed by the vesting of that interest in the acquiring authority”.
If the condition in section 23(1)(a) was satisfied, and if the value of the land would have been greater if the planning permission had been in force on the date of service of the notice to treat or vesting declaration which led to its acquisition, the person to whom compensation was originally payable was entitled to additional compensation equal to the amount by which the value of the land would have been increased at that date by the planning permission.
(2) Section 25 of the 1961 Act did not enable a claimant to speculate, that, in the absence of the compulsory purchase, an actual planning permission for some form of development might have been granted at some date. The claimant’s statement of case did not identify any statutory provision under which planning permission could be deemed to have been granted for the St George’s Works site in the sense intended by section 25(1). Nor did it include any facts which would enable it to be argued that a planning permission was to be deemed to have been granted. On that basis, it was not arguable that planning permission might be deemed to have been granted within the period of ten years beginning on 10 November 2006.
(3) The term “planning decision” was defined in section 39(1) of the 1961 Act as “a decision made on an application under part III of the Town and Country Planning Act 1990”. However, the 1990 Act did not define what action by the local planning authority constituted “a decision” for that purpose.
A planning permission had to be construed together with the plan which was submitted and incorporated into it. It was the notification to the applicant which constituted the grant of planning permission, not the prior resolution to grant. Whilst a resolution to grant was capable of being challenged by judicial review, until the actual grant of planning permission the resolution had no legal effect. In law, the resolution was not a juristic act giving rise to rights and obligations. It was not inevitable that it would ripen into an actual grant of planning permission. It followed that the resolution to grant was not a planning decision granting planning permission. Accordingly, the decision of the defendant on 19 September 2016 that planning permission be granted subject to completion of an agreement under section 106 of the 1990 Act was not a “planning decision” granting planning permission subject to conditions within the meaning of section 23(1)(a) and 29(2)(a) of the 1961 Act. It followed that the claimant was not entitled to bring a claim under sections 23 to 25 and the reference would be dismissed: Slough Estates Ltd v Slough Borough Council (No 2) [1969] 2 Ch 305 and R (on the application of Burkett) v Hammersmith and Fulham London Borough Council (No 1) [2002] UKHL 23; [2002] 2 PLR 90 followed.
(4) Sections 23 to 29 of the 1961 Act were no longer in force in relation to compulsory purchase orders made on or after 22 September 2017, having been repealed by the Neighbourhood Planning Act 2017, but they continued to provide an additional right to compensation in relation to compulsory purchase orders made before that date.
Eileen O’Grady, barrister
Click here to read a transcript of R Gardner & Co (Lancaster) Ltd v Lancaster City Council
