Compulsory purchase – Compensation – Compulsory Purchase Act 1965 – Respondents alleging interest in land compulsorily acquired by appellant – No notice to treat served on respondents – Whether acquiring authority obliged to serve notice to treat on owners of all interests in land acquired – Whether omission to serve notice to treat precluding claim for compensation – Whether entitlement to have compensation determined arising under sections 22 or 10 of 1965 Act – Appeal dismissed
The respondents were involved in constructing a new Channel Tunnel rail link. In connection with that work, they needed to divert certain electricity cables. However, the land that they proposed to use for the diversion was acquired by the appellant council as part of a compulsory purchase order for the purposes of constructing a new road. The respondents claimed compensation for disturbance on the basis that they had had an interest in the land in question and had incurred additional costs in diverting the cables.
Their asserted interests included options to acquire the freehold or a long lease of parts of the land.
The appellants disputed the existence and nature of the claimed interests. They further contended that, if there were potentially compensatable interests, section 5 of the Compulsory Purchase Act 1965 gave them a discretion as to which interests to acquire and that no claim to statutory compensation arose where they had not taken steps to acquire the respondents’ interests by serving a notice to treat.
Preliminary issues were determined as to the effect upon the entitlement to statutory compensation of a failure to serve a notice to treat: see [2008] 2 EGLR 183. The Lands Tribunal (LT) decided that: (i) an acquiring authority was obliged to serve a notice to treat on the holders of all interests in the land to be acquired; (ii) a party that had not received such notice could still apply for compensation; (iii) the relevant provision for that purpose was not section 22, which protected the acquiring authority where it discovered that it had made a mistake and did not apply if the authority had simply decided not to acquire the interest in question; but (iv) a party that had not been served was entitled to have compensation determined under section 10. The appellants appealed.
Held: The appeal was dismissed.
(1) The test for the acquisition of land under section 5 was what was “required” for the scheme, in the determination of which the authority had to act reasonably. Since the appellants “required” the land acquired for their road scheme, they also needed to acquire or secure the release of any options to purchase held by third parties; otherwise, those third parties could exercise the options at any time and then sue for trespass, thus halting the construction of the road. The appellants had exercised their choice by acquiring the freehold, and they must be taken, at the same time, to have acquired any option to purchase the freehold that was held by the respondents; if not, their purchase would not have served its purpose: Oppenheimer v Minister of Transport [1942] 1 KB 242 applied. Were it to be found that the respondents did have compensatable interests in the form of, or analagous to, options to purchase over the land compulsorily acquired, those interests had been taken pursuant to the statutory powers and the respondents were in principle entitled to statutory compensation.
(2) Although the terms in which section 22 was expressed suggested that it was meant to protect the acquiring authority, it had to be read against the background of the authority’s positive duty, under section 5, to serve a notice to treat in respect of such interests as it required for its scheme and the general principle that land was not to be acquired compulsorily without compensation. The implication was that the authority would use section 22 where a necessary interest had been omitted unless it was willing to give up possession. In a case where, in practice, the authority was unlikely to relinquish possession, the holder of the interest was entitled to initiate the process by making a claim and referring it to the LT.
(3) All issues relating to the respondents’ entitlement to compensation, or its amount, should be remitted to the LT for determination.
Per curiam: Although, in the light of the above, it was unnecessary to decide the position under section 10, it was arguable that the LT had been correct in its view that compensation under that section could, where necessary, be used to secure compensation for land taken in the compulsory purchase, and was not confined to injury caused to other land that was not so taken: Horn v Sunderland Corporation [1941] 2 KB 26 and Tiverton & North Devon Railway Co v Loosemore (1884) 9 App Cas 480 considered.
Michael Barnes QC and Barry Denyer-Green (instructed by Barlow Lyde & Gilbert) appeared for the appellants; Guy Roots QC and James Pereira (instructed by Cripps Harries Hall, of Tunbridge Wells) appeared for the respondents.
Sally Dobson, barrister