A Harrow hotel company has won partial victory in the latest round of a legal test case involving a £1.2m compensation claim for disruption to business caused by nearby roadworks. The company had claimed that compensation should be payable in the same way as for compulsorily purchased property.
Yesterday the House of Lords quashed part of a two-to-one 1998 decision in which the Court of Appeal ruled that Wildtree Hotels Ltd, owner of the Harrow Hotel in Pinner Road, Harrow, could not claim damages against the local council for loss of business and diminution in the value of its premises over a five-year period during which roadworks were carried out outside the hotel.
The Lands Tribunal that originally dealt with the matter had posed three questions to the Court of Appeal, one of which was: “Whether the Lands Tribunal erred in law in holding that compensation is payable under section 10 of the Compulsory Purchase Act 1965 where the interference with a legal right in respect of land or an interest in land is only temporary and where after such temporary interference the value of the land or the interest in the land has ceased to be affected.”
The Court of Appeal held that the tribunal had erred in that aspect of its decision, and that compensation was not recoverable for temporary interference that, at the valuation date, was no longer reflected in depreciation in capital value.
But the lords unanimously held that the Court of Appeal was wrong and that the original Lands Tribunal decision should be restored.
Wildtree Hotels Ltd and others v Harrow London Borough Council House of Lords (Lords Steyn, Browne-Wilkinson, Nolan, Hoffman and Hobhouse) 22 June 2000
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