Practice Note 14/2 : Case law - section 10 Compulsory Purchase Act 1965
The Valuation Office Agency`s technical manual covering all aspects of compulsory purchase and compensation.
This practice note summarises the principal legal cases relating claims under section 10 Compulsory Purchase Act 1965. It does not purport to be exhaustive but attempts to illustrate the general principles relating to such claims.
Andreae v Selfridge & Co Ltd [1938] Ch 1
(This case was a common law action between private parties, not a section 10 case).
Selfridges were undertaking demolition and rebuilding works just north of Oxford Street in London. Excavations up to sixty feet deep were made and cranes were being used at night and pneumatic drills were used during restricted hours. Much dust and dirt was created.
Mrs Andreae suffered substantial interference with the running of her hotel and lost trade. The High Court awarded the plaintiff £4,500 damages for nuisance.
Selfridges appealed and the Court of Appeal stated that if the defendant had carried out its activities lawfully and with due care for its neighbours no action for nuisance could be successful. However, the defendant in such a case would need to demonstrate that he had used due skill and care to justify his interference with his neighbours’ comfort.
The Court of Appeal decided that a balance had to be struck between, on the one hand, carrying out work reasonably and causing some disturbance and, on the other hand, taking excessive time and cost over a project so as to avoid all disturbance to the neighbours. The Court decided that Selfridges had not quite got the balance right and reduced the damages to £1,000. The damages represented compensation for the excessive or unlawful nuisance, not the total loss.
Jolliffe v Exeter Corporation (1967) 18 P&CR 343
Exeter Corporation constructed an inner ring road around Exeter. The Corporation made a CPO under the Highways Act 1959 for land acquisition in respect of the road although none of the claimant’s land was required for the scheme. In order to let the scheme proceed, the Corporation requested the Minister of Transport to make a stopping up order in respect of Coombe Street in which the claimant’s garage business was situated. The order was made under the T&CP Act 1947.
The garage had a frontage to the street of about 130 feet with two entrances. As a result of the stopping up of the road approximately 20 feet of the frontage and one entrance was lost and the property became situated at the dead end of a cul-de-sac and as a result the claimant lost considerable business. He sought a declaration in the High Court that he was entitled to compensation for injurious affection under section 68 LCC Act 1845 (now section 10 CPA 1965). The High Court determined that the claimant had suffered injurious affection and that the stopping up order was merely a step in the execution of the authorised works and that the claimant had a valid claim.
The Court of Appeal, however, determined that the stopping up order was a separate step and not part of the authorized works. The stopping up had been executed under separate statutory powers to those used to authorize the works and by a separate authority. No compensation was therefore payable.
Argyle Motors (Birkenhead) Ltd v Birkenhead Corporation (1973) 27 P&CR 122
Argyle Motors were car dealers with a year-to-year lease of premises having a frontage of 69 feet to Conway Street, Birkenhead which was reconstructed in connection with works undertaken to improve the approaches to the Mersey Tunnel. During and following the works the property had no direct access to Conway Street and as a result the claimant’s trade suffered. An application was made to the High Court for a declaration that the claimant was entitled to compensation for loss of profits caused by the road construction. The High Court dismissed the case and the Court of Appeal dismissed the subsequent appeal. The claimant appealed to the House of Lords which held that no claim for loss of trade could be sustained. The words ‘injuriously affected’ in section 10 referred to damage to property and not to trade or personal injury.
The claimant subsequently made a reference to the Lands Tribunal (Leake v Wirral Metropolitan Borough; Argyle Motors (Birkenhead) Ltd v Same [1977] 2 EGLR 171) which awarded £1,000 for the reduction in the value of the leasehold interest and £12,750 for the reduction in the value of the freehold interest.
Flanagan v Stoke-on-Trent City Council [1982] 1 EGLR 205
The road fronting a corner shop in Stoke-on-Trent was converted from a through road to a cul-de-sac following road works creating a new bypass. The road works continued from 1974 to 1977. The claimant closed his business in 1977 due to the reduction in trade he had suffered. The premises also suffered cracking to walls and a broken window from piling works.
The compensating authority argued that the cracking to the walls and the broken window were the result of negligence by the road contractors and were not admissible under section 10. The Lands Tribunal held that where actual damage occurred to a property as a result of public works it did not matter whether the action were due to negligence or not. The damage would be compensatable under section 10.
The compensating authority also argued that since the claimant still had vehicular and pedestrian access to his property his rights of access were not impeded so as to found a claim under section 10. The Lands Tribunal held that the creation of a cul-de-sac position for the subject property when it had previously stood on a through road deprived the claimant of the easy access to his house that he had previously enjoyed and was sufficient to found a section 10 claim.
The Lands Tribunal also determined that the date at which the damage should be assessed was the date when the works were completed although the point was not fully argued.
Clift and Clift v Welsh Office [1998] RVR 303
Contractors to the Welsh Office carried out a major scheme of improvement to the A55 trunk road. The works continued from 1987 to 1989. During the works the access to the claimant’s property was intermittently interrupted and consequently a rear access lane giving access to his garage was used as a ‘rat run’ by local traffic. The house also suffered damage to its internal and external decorations from dust and mud. The Welsh Office voluntarily paid the cost of making good the wall and ceiling cracks caused by the works. The claimant had already settled a Part I claim under the LCA 1973 for £600.
The Lands Tribunal held that compensation of £400 was payable (i) for interference with the claimant’s access to the garage which was situated on a rear service lane and (ii) for damage from mud and dust upon the internal and external decorations of the property. The Welsh Office appealed against the Lands Tribunal’s decision.
The Court of Appeal held that:
(i) Actual physical damage to the property as a result of the works is compensatable under section 10 whether or not the contractor carried out the work with due care or was negligent.
(ii) The interference with the use of the roads and footpaths in the vicinity of the property amounted to special damage suffered by the claimants and was sufficient to found a claim for compensation under section 10.
(iii) The illegal ‘rat running’ down the rear lane behind the property comprised a public nuisance. In order to be actionable by the claimants they would have to have suffered damage over and above that suffered by the public. This requirement was satisfied in this case because the claimants were the only ones to have a garage fronting the rear lane and had therefore suffered more damage than their neighbours.
Wagstaff v DETR [1999] 2 EGLR 108
The claimant owned a Petrol Filling Station (PFS) leased to BP (who was also a claimant in this case). The PFS stood at the junction of the A11 and A505. As part of a road improvement scheme a new section of A11 was constructed from a point approximately 1km south of the PFS and joined up with the old A11 approximately 1km north of it. The PFS was thus effectively bypassed.
In addition as part of the scheme the A505 was stopped up. The new road was opened to traffic in December 1995 and in January 1996 the PFS closed due to the reduction in throughput. It was agreed that the scheme had devalued the land.
The claimants stated that their land had been devalued by three sets of obstructions: the alteration 1km to the south, the alterations 1km to the north and the closing of the A505 (which provided a side entrance to the PFS). They argued that taking the works as a whole, the PFS had been devalued by the execution of the works by preventing the passing of through traffic and that full compensation should be payable.
The DETR argued that the construction of the road works would not have been actionable by the claimants if carried out without statutory authority and that the loss had been caused not by the construction of the road works but by their use. Also the stopping up of the A505 did not come within section 10 because no CPO was required to effect the stopping up, the damage suffered by the claimants did not arise from construction but from a legal and administrative act, and since the stopping up was an administrative and legal act it could not have been undertaken without legal authority.
The Lands Tribunal determined that the stopping up of the A505 gave rise to a claim under section 10 when the physical obstruction of the road took place. The stopping up order was an integral part of the CPO. The other road alterations were not relevant. The road works 1km to the south were not included in the CPO and the alterations to the A11 one km to the north were too remote.
Thus the Lands Tribunal concluded that the stopping up of the A505 was sufficiently proximate to found a claim for compensation. The Tribunal made no finding with regard to the quantum of compensation since the case had proceeded on the basis that the devaluation of the claimants’ property was caused by the use of the new section of the A11 and no evidence had been put forward as to the devaluation caused solely by the stopping up of the A505.
Wildtree Hotels v Harrow LBC [2000] 2 EGLR 5
Between 1989 and 1994 Harrow LBC carried out improvements to the Roxborough Bridge and its approaches. The bridge crosses the Metropolitan Line in Harrow. The Harrow Hotel was severely affected by the works in that: 1.hoardings were erected that obscured the hotel and restricted access by the owners and their customers; 2.the roads and pavements leading to the hotel were obstructed for long periods of time; 3.there was continual noise, dust and vibration.
The issues decided by the House of Lords were:
(i) No claim to compensation will arise under section 10 where the injury complained of does not comprise a direct injury to land.
(ii) A claim under section 10 could probably never be founded on the effects of dust, noise and vibration from building works (unless they had caused physical damage). This is because in order to gain immunity from action the works must be carried out with due regard to their effect on neighbouring owners and thus would not be actionable in accordance with Andreae v Selfridge. If the works were carried out negligently so as to cause unreasonable disturbance to neighbours they would fall outside the immunity of the statute and would be actionable at common law, not under section 10.
Even where a valid claim for direct injury to the land could be established, compensation for dust, noise and vibration could not be paid (unless they had caused physical damage). Compensation could only be paid for the effects of the direct injury.
(iii) Direct physical interferences with the land could be compensated even though they were only of a temporary nature. They could be assessed by calculating the reduction the rental value of the property for the temporary period. With trade related properties it might be necessary to assess the reduction in rental value caused by the direct physical interference by reference to the reduction in trade for the relevant period.
Westminster City Council v Ocean Leisure Limited [2004] EWCA Civ 970
Two new footbridges were constructed on either side of the Hungerford railway bridge which runs from Charing Cross to the South Bank. They are known as the Golden Jubilee Bridges. As part of the works a lift and steps up to one of the bridges had to be constructed outside the claimant’s shop. Two hoardings were erected, one for an enclosed working area and one for storage of equipment. The hoarding in Northumberland Avenue was in position from March 2000 to December 2002. The one on Victoria Embankment was in position from August 2001 to September 2002.
Signs indicating that the premises remained open for trading were affixed to the hoardings outside the claimant’s shop. The hoardings resulted in only a narrow passage being left between them and the shop frontages. General access to and from the shop was impeded and for over a year access could not be obtained from Victoria Embankment although there were alternative accesses.
The claimant said that its trade had suffered badly as a result and claimed compensation.
The Lands Tribunal held that the claimant was entitled to compensation under section 10 for any diminution in the rental value of its premises that may have been caused by the obstruction of the highway by the hoardings.
The compensating authority appealed to the Court of Appeal on a point of law. It argued that there was a long line of cases that established that the erection of hoardings on a public highway neither for no longer than, nor in greater extent than, was necessary to protect that highway from contiguous building works does not amount to an unlawful obstruction of the highway.
The Court of Appeal held that there was no special rule for hoardings in respect of claims for nuisance. It held that the claimant had suffered damage over and above members of the public (thus allowing him to claim damages for public nuisance as in Clift and Clift) and that a temporary loss in rental value could be compensated under section 10 (as in Wildtree). The Court said ‘…interference in substantial measure and over a substantial period of time with the right of the public to make use of the highway, constitutes a public nuisance which is not subject to any rule of ‘give and take’. A member of the public, including an adjoining owner, who thereby suffers special damage is entitled to sue the creator of the public nuisance’.
Moto Hospitality Limited v Secretary of State for Transport [2008] 2 All ER 718
The Cherwell Valley MSA comprised an ‘off-line’ MSA at Junction 10 of the M40. A road scheme was implemented to improve the interchange of the A43 trunk road with the M40 motorway. This included the construction of a replacement bridge over the motorway and a re-configuration of the access and exit from the motorway at this junction.
Prior to the scheme all traffic exiting or joining the southbound carriageway of the motorway at J10 had to use the roundabout on which the MSA was located. After the scheme, traffic exiting or joining the southbound carriageway of the motorway to or from the east did not use that roundabout.
Moto Hospitality claimed compensation for the diminution in the value of its leasehold interest principally because the routes to it were longer and less direct due to the scheme.
The Lands Tribunal at first instance, in determining liability as a preliminary issue, had stated that Moto was entitled to compensation because it had suffered ‘special damage’ (over and above that suffered by other local landowners or the general public) due to the particular relationship that the MSA had in relation to the motorway.
The Secretary of State appealed on the grounds that the loss in value had been caused by the stopping up of the slip roads at the junction which were not included in the CPO because compensation under section 10 was payable only for works carried out on the land acquired for the scheme.
The Court of Appeal decided that Moto had not established a claim for compensation under section 10 although it left open the question of whether they could have made a claim for the effect of temporary closures of their access during the works on which the Tribunal had made no finding. The Court said that the loss arising from the new road system was too remote because it arose from the junction improvements as a whole and not from any part of the works that would have been actionable in the absence of statutory authority. ‘There needs to be a direct interference with the access to an individual site which goes beyond what is ordinarily incidental to the traffic objectives of the scheme as a whole’.
The Court determined various points relating to section 10 claims:
1.The works complained of do not have to have been carried out on land acquired by CPO (thus overruling Wagstaff v DETR on that point).
2.Compensation could be payable where land has been acquired by agreement.
3.The ‘special Act’ referred to in section 10 included (in this case) the Highways Act 1980, the CPO and all the orders made under that Act (such as the stopping up orders). Thus all the scheme works came within the ambit of section 10.
4.Stopping up orders would be disregarded only where undertaken.
(i) by a separate compensating authority
(ii) under a different statutory provision
(iii) thus Joliffe v Exeter Corporation could be distinguished from the present case.