PRESTWICK HOTELS Ltd v GLASGOW CORPORATION
| Jurisdiction | Scotland |
| Judgment Date | 18 December 1974 |
| Docket Number | No. 9. |
| Date | 18 December 1974 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION.
Compulsory acquisitionLand Compensation (Scotland) Act 1963 (cap. 51), sec. 3 (9)Compensation for hotel and its goodwillWhether additional entitlement, to costs of acquiring going concern elsewhere.
The claimants carried on the business of a licensed hotel in premises which they owned. Said premises were compulsorily acquired under a comprehensive development area order. In arbitration proceedings the claimants established their intention to carry on their business elsewhere. The arbiter awarded compensation in respect of, inter alia, the goodwill of the business, which he found to have been extinguished. He proposed awarding, also, compensation for the costs to be incurred by the claimants (by way of professional charges and personal outlays) in searching for, locating, and acquiring another hotel as a going concern.
Held that the proper measure of compensation was to be arrived at on the basis of total extinction of the claimants' business. Compensation so arrived at would represent the full price for the premises and the business as a going concern, thus putting the claimants in money terms in precisely the position they would have been in had their land not been taken. To give the claimants the costs of locating and negotiating the purchase of another hotel as a going concern, would result in total compensation being greater than the measure of the whole loss they had suffered.
Prestwick Hotels Ltd. claimed from the Corporation of the City of Glasgow compensation under the Land Compensation (Scotland) Act 1963, in respect of the compulsory acquisition by the Corporation of the claimants' licensed hotel at 257A Buchanan Street, Glasgow, known as the Commercial Hotel, and instituted arbitration proceedings under the Act. The arbiter awarded compensation under a number of heads. The Corporation appealed against an award made under heads 6 and 7 of the claim.
A case stated by the arbiter set forth inter alia as follows:"(2) The claimants were the owners of the heritable property known as 257A Buchanan Street, Glasgow, in which they carried on the business of a licensed hotel known as the Commercial Hotel. The respondents acquired the said property under Compulsory Purchase Order No. 2 of the Cowcaddens Comprehensive Development Area The parties lodged written pleadings and after sundry procedure a closed record was made up and there was a hearing on 24th and 31st March 1969 at which evidence was led for both parties On 2nd October 1969 the arbiter issued proposed findings, against which both parties made representations, and the respondents have required the arbiter to state a case relating to heads 6 and 7 of the claim (3) I rejected the written representations for the respondents on heads 6 and 7 of the claim (4) I now deal with the point raised under head(s) 6 (and 7). Head 6 reads: Cost of locating, negotiating purchase of going concern, including expenses (being the summation of six subheads of expense) 1754 Head 7 should also be quoted namely...
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