Decision Nº ACQ 274 2010. Upper Tribunal (Lands Chamber), 18-03-2014
| Jurisdiction | UK Non-devolved |
| Judge | Mr Paul Francis FRICSHis Honour Judge Mole QC |
| Date | 18 March 2014 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | ACQ 274 2010 |
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UPPER TRIBUNAL (LANDS CHAMBER)
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UT Neutral citation number: [2014] UKUT 0116 (LC)
UTLC Case Number: ACQ/274/2010
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
COMPENSATION – Compulsory purchase of 1.1 acre waste transfer site –planning assumptions – valuation – disturbance - extinguishment of business – pre-possession “shadow period” losses – management time – re-investment costs – Land Compensation Act 1961 section 5 rules (2) and (6), sections 14(3) and 16(3) and section 10A – compensation determined at £2,580,747
IN THE MATTER OF A NOTICE OF REFERENCE
BETWEEN (1) DAVID MOSCHE HALPERN Claimants (2) PATRICK WILLIAM GLADWELL(3) CLEARUN LIMITED
(4) DOMINION MOSAIC & TILE COMPANY LIMITED
and
GREATER LONDON AUTHORITY Acquiring Authority
re: Clearun Wharf, 151 Marshgate Lane, Stratford,
London E15 2DT
Before: HH David Mole QC (sitting as a Deputy Judge of the Upper Tribunal)
& Paul Francis FRICS
Sitting at: 43-45 Bedford Square, London WC1B 3AS
on
9-11, 14-18, 21-22 October and 25 November 2013
Barry Denyer Green and Daniel Robinson, instructed by S J Berwin, solicitors of London EC4, for the claimants
James Pereira and Alexander Booth, instructed by Squire Sanders LLP, solicitors of Leeds, for the acquiring authority
The following cases are referred to in this decision:
Urban Edge Group Ltd v London Underground Ltd [2009] UKUT 103(LC)
Abbey Investments Ltd v London Development Agency [2010] UKUT 325 (LC)
Harvey v Crawley Development Corporation [1957] 1 QB 485
Horn v Sunderland Corporation [1941] 2 KB 26
Director of Buildings and Lands v Shun Fung Ironworks [1995] 2AC 111
Lindon Print Ltd v West Midlands County Council (1987) 283 EGLR 70
Loring v Davis (1886) 32ChD 625
Pointe Gourde Quarrying and Transport Ltd v Sub-Intendent of Crown Lands [1947] AC 565
RMC (UK) Ltd v London Borough of Greenwich [2005] ACQ/3/2003 (LT)
Waters v Welsh Development Agency [2004] UKHL 19
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This is a consolidated reference relating to the compulsory acquisition by London Development Agency (now Greater London Authority and referred to hereafter as the acquiring authority) of a 1.1 acre waste transfer site (WTS) at Clearun Wharf, 151 Marshgate Lane, Stratford, London E15 2DT (the reference land) under The London Development Agency (Lower Lea Valley, Olympic and Legacy) Compulsory Purchase Order 2005 (the CPO). The CPO was made on 16 November 2005 and, following a public inquiry, was confirmed by the Secretary of State on 18 December 2006. A General Vesting Declaration was made on 14 May 2007 and the land vested in the acquiring authority on 2 July 2007, which is the valuation date for the purposes of this reference.
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The initial reference (ACQ/274/2010) was made by the acquiring authority on 8 January 2010 and related to the question of compensation to be paid to the first and second claimants for the value of the land under section 5, rule (2) of the Land Compensation Act 1961 (the 1961 Act). On the same date, the acquiring authority made a further reference (ACQ/280/2010) whereby the claimant was Clearun Limited (Clearun), the company which operated the WTS. This related to the issue of compensation for disturbance under rule (6) due to the alleged extinguishment of the Clearun business together with other miscellaneous heads of claim. An application for them to be consolidated was accepted and subsequently ordered by the Tribunal. On 28 June 2013 a further reference (ACQ/88/2013) was made by the fourth claimant, Dominion Mosaic and Tile Company Limited (Dominion), which dealt with a technicality regarding the first claimant’s interests and, following an application, that reference was also consolidated with the above by an order dated 24 September 2013.
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As at the commencement of the hearing, the claimants’ claim for the value of the reference land under rule (2) was predicated upon three alternative bases: Firstly, that the reference land had a value of £6,000,000 pursuant to section 16(3) of the 1961 Act on the assumption that planning permission for a scheme comprising a mixed use development in accordance with their planning expert’s “Notional Scheme 2” would have been granted by the valuation date. Secondly, pursuant to section 14(3) of the 1961 Act, the said value discounted by 20% (£4.8 million) on the assumption that no such permission existed at the valuation date, but that it could be expected to be granted within 18 months thereof. Thirdly, that if the Tribunal determines that there was no short to medium term prospect of planning permission being obtained, a value of £2.7 million representing the existing use value enhanced by a sum to reflect the long term “hope” of such a permission being forthcoming. The acquiring authority’s case was that planning permission was not to be assumed under section 16(3), and that having regard to both the existing use value, and development prospects under section 14(3) (whereby it was agreed that planning consent for a mixed use development could have been expected to be obtained within 18 months of the valuation date), the rule (2) value was £1,850,000.
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In terms of disturbance, the claimants’ forensic accounting expert assessed compensation for the extinguishment of Clearun’s business in the sum of £1,482,549 to which should be added £282,133 (revised to £401,000 immediately prior to the hearing) relating to pre-possession losses incurred by the business. The acquiring authority’s case was that the evidence did not support the conclusion that the business was extinguished, and compensation under that head should therefore be nil. However, if it were to be established that the business was extinguished to some degree, it was contended that no more than 50% of it was extinguished and, on the basis of their accountancy expert’s evidence, compensation should be no more than £83,990. In the event that the Tribunal were to find that the business had been totally extinguished, and that there was no failure to mitigate (which the acquiring authority say there was due to a failure to dispose of what was left of the business in a timely fashion), the acquiring authority said the compensation properly payable in respect of the value of the business was £238,721. As to pre-possession losses, these were valued by the acquiring authority at £97,313
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The acquiring authority contended that the claim for £80,000 relating to Mr Halpern’s management time expended in progressing the claim was unproven.
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Mr Halpern also sought reinvestment costs in the sum of £2,250,000 pursuant to section 10A of the 1961 Act, but the acquiring authority disputed that such were payable and that element of the claim was withdrawn on the fifth day of the hearing.
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The principle of the claimants’ claim for pre-reference costs was accepted by the acquiring authority, and was subsequently agreed at £57,000, as was the entitlement to a Basic Loss Payment in the sum of £75,000.
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Mr Barry Denyer-Green and Mr Daniel Robinson of counsel appeared for the claimants and called Mr David Mosche Halpern as a witness of fact, together with the following expert witnesses: Mr Ben Kelway (Planning), Mr Neal Matthews (Valuation), Mr Jeffrey Nedas (Forensic Accountancy - disturbance) and Mr Andrew Murdoch (Transport). The second claimant, Mr Patrick William Gladwell, did not appear and was not represented.
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Mr James Pereira and Mr Alexander Booth of counsel appeared for the acquiring authority and called the following witnesses of fact: Mr Roger Tuffley (Crossrail Safeguarding Manager), Mr David Clarke (Consultant to GLA), Mr Ralph Luck (Director of Property for the Olympic Delivery Authority), Mr Geoffrey Spiller (evidence relating to the Carpenters’ land) and Mr John Burton (Director of Development, Westfield). A witness statement was also received from Mr James Fergusson (Crossrail Engineering Consultant) but he...
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