Commercial property — Compulsory purchase — Compensation — Appellant owning freehold interest in warehouse – Respondent acquiring appellant’s property by compulsory purchase — Appellant claiming compensation for loss of rent and injurious affection – Tribunal making lesser award than claimed – Whether tribunal erring in law in determining level of compensation — Appeal dismissed
The appellant was the freeholder of a warehouse in East London. A small part of the property, comprising a section of the forecourt, the access yard and half of a road, was the subject of a compulsory acquisition by the respondent acquiring authority as part of a scheme to improve the A13 road. The property had been let to a tenant under a lease dated May 1989. It took over the rights and obligations of the tenant’s lease at the valuation date of February 2001 but did not occupy the premises. The respondent subsequently entered into a deed of surrender in June 2001 following the payment of a premium to the appellant of £21,625.
The parties agreed that the reduction in the road width had no monetary value and the appellant did not seek to claim in respect of the forecourt and the access yard. However, he brought proceedings, under section 5 of the Land Compensation Act 1961 and section 7 of the Compulsory Purchase Act 1965, claiming compensation in respect of loss of rent, injurious affection and personal time spent on the reference and pre-reference costs. The total sum claimed amounted to around £136,000.
The Upper Tribunal (Lands Chamber) determined that the appellant was entitled to £8,641.50 by way of compensation for personal time, pre-reference costs and a small award for the value of the land: see [2010] UKUT 99 (LC). The appellant appealed. He contending, inter alia, that when calculating the compensation, the tribunal had referred to an argument premised on estoppel that the respondent had not relied on and to which the appellant had not been given an opportunity to respond.
Held: The appeal was dismissed.
The tribunal had had ample evidence on which to reach its conclusions, for each of which it gave a clear and cogent explanation. In reaching those conclusions, it had directed itself correctly by reference to the applicable principles. The procedure had not been unfair and the decision could not be impugned.
The tribunal’s conclusions rested on its findings of fact, based on legal principles that could not be disputed. The appellant’s arguments on appeal were irrelevant to the narrow factual issues that the tribunal had had to resolve. This was a straightforward case, which it was unnecessary to complicate. Thus, the principal arguments raised on appeal were of no relevance to the outcome of the claim.
The tribunal had been justified in deciding that the terms of the deed of surrender precluded an argument to the effect that the respondent had not assumed liability under the lease with effect from February 2001. By that deed, the respondent had surrendered an interest in the premises, which could be understood only as being the leasehold interest that had been vested in the tenant. Although the label “estoppel” might have been neither necessary nor appropriate, the tribunal was merely saying that the parties had made an agreement that dealt with the incidence of the liability for rent under the lease as from the valuation date and that one party could not unilaterally depart from it. However, if that amounted to an estoppel, it was not an estoppel by inference of the sort deprecated by Bowen LJ in Onward Building Society v Smithson [1893] 1 Ch 1, at p14. Rather, it was giving effect to the plain words of the deed of settlement.
The case was also different from Re Distributors and Warehousing Ltd [1986] 1 EGLR 90; (1988) 278 EG 1363, where the conveyance of a freehold reversion expectant on a lease was held to be insufficient to amount to an assignment of a guarantee in favour of the lessor. A subsequent deed of variation of the lease agreed between the new freeholder and the guarantors, which were party to the lease, was held to be insufficient as a matter of construction to amount to the undertaking of a fresh obligation of guarantee towards the new freeholder, nor did it estop the guarantors from denying any liability to the new freeholder. By contrast, the deed of surrender in the instant case expressly acknowledged that the respondent, as lessee, owe a liability lessee under the lease formerly with the tenant.
Christiaan Zwart (instructed by Hughmans Solicitors) appeared for the appellant; Richard Honey (instructed by Eversheds LLP) appeared for the respondent.
Eileen O’Grady, barrister
