Compulsory Purchase Compensation

February 22nd, 2017 by James Goudie QC in Land, Goods and Services

In Homes and Communities Agency v J S Bloor (Wilmslow) Ltd (2017) UKSC 12 raised questions concerning the Pointe Gourde or “no-scheme” rule, by which compensation for compulsory acquisition is to be assessed disregarding any increase or decrease in value solely attributable to the underlying scheme of the acquiring authority.  The particular issue concerned the relationship between the general provisions, in the Land Compensation Act 1961, as explained and expanded by judicial interpretation, for the disregard of the scheme, and the more specific provisions relating to planning assumptions.

The Supreme Court reversed the decision of the Court of Appeal and reinstated that of the Upper Tribunal. The Tribunal were entitled to regard the underlying policies, including the allocation in the development plan, as potentially relevant also to the development apart from the scheme.  The assessment of their significance in the no-scheme universe was pre-eminently a matter for the Tribunal.  They did not ignore potential policy considerations. Their reasoning disclosed no error of law.

The right to claim for potential development value is long established. The specific statutory provisions relating to planning assumptions do not preclude account being taken under the general law of the prospect (certain or a hope) of planning permission for valuable development.  Moreover, the application of the Pointe Gourde principle may result in changes to the assumed planning status of the subject land.  The application of the general law may produce a more favourable result for the claimant than the statutory planning assumptions.

The Supreme Court concluded that the Upper Tribunal’s decision in this case was a powerful illustration of the potential complexities generated by the by the 1961 Act in its unamended form. It was to be hoped that the amendments currently before Parliament will be approved.



Open Space

February 15th, 2017 by James Goudie QC in Land, Goods and Services

One of the issues in Whitstable Society v Canterbury City Council [2017] EWHC 254 (Admin) was whether the notification and consultation proceedings required by Section 123(2A) in relation to open space land owned by a local authority ought to have been gone through in respect of the sale of land owned by the City Council.  Dove J held not, notwithstanding that the land had been acquired for development as open space and had not been formally appropriated to any other use.  He said, at paragraph 78:

“In my view the key issue in applying section 123(2A) is whether, at the time of the disposal of the land, it consisted or formed part of an open space. That is the specific language of the section. In my view that is not solely determined by use, if in fact the land has been laid out as a public garden (the breadth of which term does not arise for determination in this case). If the land were to be a public garden the section 123(2A) requirements could not be evaded simply by excluding the public. Thus the phrase “consisting or forming part of an open space” would also include land which might not actually at the point of disposal be being used by the public but which, by virtue of the manner in which it had been landscaped, would consist of or form part of an open space.” Read more »


Assets of Community Value

December 22nd, 2016 by James Goudie QC in Land, Goods and Services

R (Patel) v SoS for CLG (2016) EWHC 3354 (Admin) was a challenge to an Inspector’s decision allowing an appeal from a refusal by Wandsworth LBC as LPA of an application for a change of use from retail to residential. One of the grounds of challenge was that the fact that the premises were registered as an Asset of Community Value (“ACV”) under Sections 87 and 88 of the Localism Act 2011 was a “material consideration” that the Inspector had ignored.  Ouseley J ruled that the Inspector had been wrong not to take this into account.  This did not, however, have the consequence that the ground of challenge succeeded.  It was perfectly clear that if the Inspector had considered it to be of relevance it would have made no difference to her decision.  Ouseley J said, at paragraph 58:

“The ACV status of this corner shop reflects the local value put on its services as a shop. That was perfectly evident from the representations made to her, and the Council’s case. Local value was at the heart of the question of the impact of its loss on the provision of services. The status in fact added nothing or nothing much to the arguments. It is another guise in which the same points would be made, except if an issue had arisen as to whether, absent the change of use, the shop would in fact continue in shop use, where the possibility of community purchase could be relevant.”

Ouseley J also dismissed a PSED challenge. Referring to Section 149 of the Equality Act 2010 and the principles summarised by the Court of Appeal in Bracking (2013) EWCA Civ 1345, he said:

“62.    The Defendants submitted, correctly, that what was required was an examination of whether the decision-maker has in substance had due regard to the statutory needs, which depends on the decision and its reasoning …”

“65.    There is no duty to give particular weight to the needs of the elderly or disabled, and no duty to achieve the outcome which advantages them the most or disadvantages them the least. The decision-maker needs to be properly informed about the issues … The question is whether the Inspector applied her mind to the issue in the manner required by Bracking, even though she did not specifically refer to the s149 duty.”

“68.    She is not obliged by s149 to find some countervailing public benefit to set against the greater disadvantage of the longer journey or the loss of those services before she could reach a lawful decision on … approval. The question she has to decide under the Order is still the same. Otherwise, s149 would alter the decision which had to be made.”





December 1st, 2016 by James Goudie QC in Land, Goods and Services

Mapeley Beta Acquisition Company Limited v SoS for CLG (2016) EWHC 2997 (Admin) concerns the validity of a Compulsory Purchase Order (“CPO”) made by the Interested Party, Swindon Borough Council (“the Council”) and confirmed by the SoS. The CPO related to a strip of land in the centre of Swindon which was vital to the implementation of a Town-Centre Regeneration Scheme (“the Scheme”) in the Council’s Local Plan.

Kerr J observed:-

“2.      The law jealously guards the right of a property owner to enjoy its property, which has been called a constitutional right. A compelling case that the purchase is necessary in the public interest must be made out to take the right away without consent. The Secretary of State may only endorse the destruction of the owner’s property right if it is “clear that the Secretary of State has allowed those rights to be violated by a decision based upon the right legal principles, adequate evidence and proper consideration of the factors which sway his mind into confirmation of the order sought”: …


  1. … the draconian nature of the Order will itself render it more vulnerable to successful challenge on Wednesbury/Ashbridge grounds unless sufficient reasons are adduced affirmatively to justify it on its merits.


  1. The power of compulsory purchase may be exercised by a local authority if “the authority think that the acquisition will facilitate the carrying out of development, re-development or improvement on or in relation to the land” (Town and Country Planning Act 1990 (TCPA), section 226(1)(a)). The authority cannot exercise the power unless they think that the development, re-development or improvement is likely to contribute to achieving one or more of three defined objectives: promoting or improving the economic, social, or environmental well-being of the authority’s area (TCPA, section 226(1A)).


  1. As for the application of the Human Rights Act 1998 and article 1 of the first protocol to the European Convention, it is common ground that the question is whether the decision of the Secretary of State to accept the recommendation of the inspector and confirm the CPO was a proportionate interference with the rights of the objector and no more than necessary to accomplish the objective of the CPO; …”


7.       “… the Secretary of State’s primary task is to consider the issues raised by objections to the CPO, not to search for alternatives. But fairness may require him to “consider at least any obvious alternatives” … put forward by way of alternative to the CPO, “it might have thrown serious doubt over the need for the CPO”. Where, however, there is no such package before the inquiry, “the inspector was under no duty to devise one” (paragraph 22).


  1. … principles … require the decision maker to take account of relevant considerations.


  1. To do so requires an evaluation of the principal contested issues, including the viability of any proposed alternative advanced by the objector. Adequate and intelligible reasons must be given: South Bucks DC v. Porter (no. 2) [2004] 1 WLR 1953, per Lord Brown at paragraph 36. While there is only one standard of adequacy, the degree of particularity required to meet it will vary according to the nature of the issues falling for decision. Thus, fuller reasoning may need to be given where the inspector’s recommendation is rejected than where it is accepted …”

The Claimant had objected to the CPO on the basis that the Scheme could be delivered without its land. The Council’s case at the Inquiry was that the Claimant’s land was essential to successful implementation of the Scheme because (i) it provided a vital link walkway and (ii) there was no viable alternative.  There was a contest between two routes.

Kerr J held: (1) The CPO Inspector’s reasoning and conclusions on the viability of the link without the Claimant’s land could not be criticized; (2) the Inspector had been fully alive to the issue of preserving the Claimant’s ownership of its land and addressed that issue adequately in his Report, justifying the Inspector’s Conclusion that the CPO had indeed been used as a “last resort”; and (3) the Inspector’s Reasons duly let the Claimant know why it had lost and why the Council’s CPO had been confirmed by the SoS.

The interference with the Claimant’s property rights had been proportionate. The compelling public interest requirement in the case of a CPO does not generate any different or higher duty to give reasons than in other cases, especially where the reasons are addressed to an audience already very familiar with the issues: paragraph 53.



Best Consideration

September 9th, 2016 by James Goudie QC in Land, Goods and Services

The policy of legislation such as Section 123 of the Local Government Act 1972 is to ensure, so far as reasonably possible, that public assets are not sold by public authorities at an undervalue, save, if at all, with the consent, general or specific of the Secretary of State.  In R (Faraday Developments Ltd) v West Berkshire Council [2016] EWHC 2166 (Admin) Holgate J distilled, at paragraph 131, the following principles from the case law as to the circumstances in which a judicial review Court may or may not intervene in relation to the application of Section 123:-

(1) The Court is not entitled to substitute its own view on the facts and merits for that of the local authority, the Court may interfere only if there was no material upon which the authority’s decision could have been reached, or if in reaching that decision, the authority disregarded matters it ought to have taken into consideration, or if it took into account matters which were irrelevant, or if its decision was irrational;
(2) The Court is likely to find a breach of Section 123(2) only if the local authority (a) has failed to take proper advice, or (b) failed to follow proper advice for reasons which cannot be justified, or (c) although following advice, it followed advice which was so plainly erroneous that in accepting it the authority must have known, or at least ought to have known, that it was acting unreasonably;
(3) Section 123(2) does not mandate the authority to have regard to any particular factors;
(4) There is no need for the authority’s decision-making process to refer to Section 123(2) explicitly, provided that the Court is able to see that the duty has in substance been performed;
(5) The obligation under Section 123 is not to conduct a particular process, but to achieve a particular outcome, (albeit process may have an important, or even determinative, evidential role in deciding whether the authority has complied with Section 123(2));
(6) “Consideration” in Section 123(2) is confined to those elements of a transaction which are of commercial or monetary value, and therefore the Court will quash a decision to sell property where the authority has taken into account an irrelevant factor, eg job creation, when assessing whether it is obtaining the best “consideration” reasonably obtainable;
(7) The deliverability or credibility of a bid, or the care with which it has been prepared, are commercial factors which are relevant to an assessment of whether the “consideration” offered is the best reasonably obtainable: the highest offer on the table need not represent the best “consideration”, because an authority may conclude that “a bird in the hand is worth two in the bush”;
(8) In order to discharge the duty under Section 123(2) there is no absolute requirement to market the land being disposed of, or to obtain an independent valuation.

The case also concerned whether the Development Agreement was a “public contract” to which the public procurement regime applied; from paragraph 171, addressed the principles concerning the “main object” of a contract and the concept of direct and indirect and enforceable legal obligations; and, from paragraph 196, whether the Development Agreement contained artificial measures or devices to avoid public procurement legislation.



June 22nd, 2016 by James Goudie QC in Land, Goods and Services

The Court’s power, under Section 24(2) of the Acquisition of Land Act 1981, to quash a Compulsory Purchase Order relates to the whole of the Order, not only its confirmation by the Secretary of State: Grafton Group v SoS for Transport (2016) EWCA Civ 561.



Local authorities, procurement and not profit organisations

June 2nd, 2016 by Peter Oldham QC in Decision making and Contracts, Judicial Control, Liability and Litigation, Land, Goods and Services

Local authorities often procure contracts from non-profit organisations (NPOs). Assume an NPO brings a claim under the Public Contracts Regulations 2015 claiming that something went wrong in a procurement, such that there is an automatic suspension preventing the contract being entered into. Say the authority then applies to Court to set the suspension aside.  How does the American Cyanamid test apply where the claimant is an NPO?  In A v B TCC 27 May 2016, the Technology & Construction Court returned to this question.

Readers will recall that on an application to lift the suspension under the PCR, Cyanamid means that the Court will consider whether there is a serious issue to be tried; whether damages are an insufficient remedy; and whether the balance of convenience lies with maintaining the suspension. The modern trend is to see the adequacy of damages as one of the factors relevant to the balance of convenience, rather than as a separate stage.

In Bristol Missing Link Ltd v Bristol City Council [2015] PRST 1470, the claimant was an NPO providing domestic violence and abuse support services to the local authority. Its tender made no allowance for any profit, so that damages would be nominal at most. The suspension was not lifted. Coulson J said at [55]:-

 “In my view, a non-profit-making organisation, which has bid for a contract making no allowance for profit at all, and a minimal amount for overheads, is entitled to say that, in such circumstances, damages would not be an adequate remedy.”

In A v B, the claimant was an NHS trust, and so also an NPO.  The defendant was a procuring CCG. On the CCG’s application to set aside the suspension, Stuart-Smith J distinguished Bristol. He said that the mere fact that the Trust was an NPO did not mean that damages would be an inadequate remedy.  Moreover in Bristol, the claimant’s business stood to be wiped out if it lost the tender.  Here by contrast, the Trust stood to lose only 10% of its work.  After considering other factors relevant to the balance of convenience, the judge set the suspension aside.

So the first point to take away is that merely because the claimant is an NPO will not mean that it gets over the hurdle of showing that damages would be an insufficient remedy. As ever, it is a question of fact.

And as to that, the Courts have recently made it clear that, on an application to discharge the suspension, simple assertions, by either party, about where the balance of convenience lies will not be enough to make their case. Solid evidence is normally needed e.g. OpenView Ltd v Merton LBC [2015] BLR 735; Counted4 CIC v Sunderland CC 164 Con LR 230. And that’s the second point to take away.

Peter Oldham QC



Compulsory Purchase

February 12th, 2016 by James Goudie QC in Land, Goods and Services

In Phoenix Developments v Lancashire County Council [2016] UKUT 38(LC) it was held in the Upper Tribunal (Lands) that the Tribunal had jurisdiction under Section 1 of the Land Compensation Act 1961 to determine compensation for land in Accrington acquired by compulsory purchase from a property development company, notwithstanding that an expert had previously determined a price for the land, under an option agreement.  The Council had entered into an option agreement to purchase land at a price, to be determined by an expert as the market value of the land plus all other sums the landowner would be entitled to if the land was acquired compulsorily.  The Council sought to exercise the option and the expert determined a price.  However, the sale was not completed as the landowner was dissatisfied with the expert’s determination and sought to withdraw.  The Council then acquired the land through the use of its compulsory powers.  The Council submitted that (1) the Tribunal had no jurisdiction to determine the compensation payable for the land, as the expert’s binding determination of the contractual purchase price meant that there was no question of “disputed compensation” capable of being referred to the Tribunal; (2) there was an implied term of the option agreement that any price determination by the expert would remain binding between the parties in the event of compulsory purchase.  Martin Rodger QC, Deputy President, refused the application.  He held that the expert’s determination was irrelevant to the question whether the Tribunal had jurisdiction to entertain the reference.  The land was acquired by the exercise of compulsory powers and there had been no agreement between the parties on the compensation payable in respect of that acquisition.  The expert’s determination had been made for a different purpose.  Even if the price determined by the expert included a sum reflecting statutory compensation, there had been no agreement by the landowner to treat that determination as conclusive of the value of its entitlement. The Deputy President further held that there was no implied term. It was neither necessary nor obvious that the expert’s determination of the contractual purchase price would have been intended by reasonable people in the position of the parties to be determinative also of the claimant’s statutory entitlement in the event of the land being acquired by the exercise of compulsory powers.  It could not be said that the contract would lack commercial or practical coherence without such an implied term.

As to (1), the position was the converse of that in BP Oil UK Ltd v Kent County Council [2003] EWCA Civ 798.  The question in that case was whether an agreement entered into after an acquiring authority had entered and taken possession of land had the effect that the landowner’s statutory entitlement to compensation had become a contractual right to a purchase price which, in default of agreement, was to be determined by the Lands Tribunal applying the statutory compensation code; the question was significant because the reference had been made to the Tribunal after the expiry of the limitation period for a statutory claim arising on the date of entry.  Carnwath LJ, as he then was, observed that the fact that the contractual method of calculating the consideration payable for the land would replicate the method that would apply under the statutory code, “did not deprive the clause of contractual effect” (as the acquiring authority had argued). The Court of Appeal was not dealing with a case such as the present, in which an enforceable contractual right to acquire land at a determined price had been put on one side by the acquiring authority in favour of the exercise of compulsory powers.

As to (2), the Deputy President applied the Supreme Court decision in Marks & Spencer v BNP Paribas Securities (2015) UKSC 72.  A term can be implied only if, without the term, the contract would lack “commercial or practical coherence”.


Minimum wage

November 18th, 2015 by James Goudie QC in Land, Goods and Services

EU law allows the exclusion of a tenderer who refuses to pay the minimum wage from the procedure for the award of a public services contract.  So ruled the ECJ on 17 November 2015 in Case C-115/14, Regis Post GmbH v Stadt Landau, a case concerned with postal services in the German municipality of Landau.  The public sector procurement Directive, 2004/18, does not prevent legislation that requires tenderers and their subcontractors to undertake, by means of a written declaration enclosed with their tender, to pay staff called upon to perform the services a predetermined minimum wage.  That obligation constitutes a special condition in principle acceptable under Article 26 of the Directive, since it relates to the performance of the contract and concerns social considerations.  That special condition was set out in the contract notice and in the specifications, so that the procedural condition as to transparency was satisfied.  Moreover, the special condition was neither directly, nor indirectly, discriminatory.  The minimum wage in question was part of the level of protection that must be guaranteed by undertakings established in other Member States to workers “posted” for the purposes of performing the public contract.  The Court distinguishes the case in Rüffert (C-346/06).


Land Transfer

November 6th, 2015 by James Goudie QC in Land, Goods and Services

In Dudley Muslim Association v Dudley Metropolitan Borough Council (2015) EWCA Civ 1123 the Court of Appeal held that a Chancery Master had not erred in striking out the Community Association’s defence of legitimate expectation in relation to a claim by the Council for the specific performance by the Association of a contractual obligation on the part of the Association to transfer land back to the Council.  This was for three reasons: first, the legitimate expectation could not avail against the contract; second, Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 was applicable; and third, the defence failed on the facts.

As to the first reason, Levison LJ observed, at paragraph 22:-

“It is true that in a technical sense the Council is operating under statutory powers; but that is only because the Council can do nothing unless it is authorised by statute. The authorising statute in the present case is section 120 of the Local Government Act 1972, which empowers the Council to acquire land in its area. However, this case is not about the unilateral exercise by the Council of a statutory power; it is about the implementation of a commercial bargain. In substance, what we are dealing with is the enforcement of a contract willingly made by both parties with the aid of legal advice. The DMA’s defence is that the Council is not entitled to enforce the contract according to its terms. This important feature of the case gives rise to the question whether a public law defence based on legitimate expectation is, in principle, an available defence to a claim to enforce a contract. …”

The case will be governed by private law, absent bad faith or improper motive. At paragraph 30, Levison LJ concluded:-

“In my judgment, in the circumstances of this case, there is no public law defence available to the DMA based on legitimate expectation or a general appeal to abuse of power. If the DMA cannot assert a variation of the contract or a promissory estoppel, which they do not attempt to do, the contract is enforceable according to its terms.”

As to the 1989 Act, the Association’s obligation to transfer the land to the Council was in principle within the ambit of Section 2. Any variation that falls within the ambit of Section 2 must itself comply with the required formalities of that Section.  They cannot be outflanked by promissory estoppel.

As to the facts, the Court of Appeal acknowledged (paragraph 46) that a decision of a local authority can be impugned even if there has been no clear representation which created a legitimate expectation, if there is an abuse of power. However:-

“47.      … fairness and reasonableness are objective concepts, otherwise there would be no more than palm tree justice: … Abuse of power is not a freestanding ground on which a court can act in the absence of unlawful action on the part of the public authority in question: …the proper sphere of the court is illegality.”

“49       Where it is alleged that a public authority is abusing its powers it is necessary to inquire: what is the power that is being abused? In many cases what is in question is the exercise of a statutory power, and the question will be whether the power is being exercised for the purposes contemplated by the statute and proportionately on the facts of the individual case. A power of this nature is one conferred upon a public body and is capable of exercise without the consent of the citizens who are affected by its exercise. It is for that reason that the law will intervene to protect the citizen against the abuse of that unilateral power. But in this case we are dealing with contractual rights and obligations. I do not think that it can usually be an abuse of power to exercise contractual rights freely conferred, even if the result may appear to be a harsh one. By the same token what is “unfair” or “conspicuously unfair” will depend on the context. …”

“50.      Once again the context here is a commercial contract entered into by two parties with the benefit of legal advice. It is not usually unfair to hold parties to the terms of the contract that they have agreed. As I have said the law of contract has developed mechanisms, such as the principle of promissory estoppel, which preclude a person from relying on his strict legal rights where certain conditions are fulfilled. These mechanisms exist in private law; but they are not relied on in this case, and play no part in the pleaded defence. One of the hallmarks of a bilateral contract is its mutuality. Whatever rights the Council has, they are rights that the DMA have granted to it. In my judgment the defence of abuse of power, even if available, would also fail on the facts.”