Halstead v Council Of City Of Manchester

Compensation under section 11(1) of the Compulsory Purchase Act 1965 carries interest from entry until payment, including where compensation is assessed by the reasonable cost of equivalent reinstatement under rule (5) of the Land Compensation Act 1961. Clear statutory wording cannot be restricted by reference to alleged windfall, discounting, or practical reinstatement. Interest runs until the compensation is actually paid, including where payment is made by instalments. For limitation purposes, the cause of action accrues when the compensation amount is agreed or awarded, not separately when each instalment is paid.

The Manchester and Salford Methodist Mission owned two churches included in compulsory purchase orders made by Manchester City Council. Entry took place in 1974. The Council agreed to fund a replacement church, and made staged payments between 1980 and 1986. The amount of compensation was finally agreed on 25 November 1985, but the parties disputed statutory interest.

The Mission issued its writ on 21 May 1990. Buckley J held that interest was payable from entry until payment and that the claim was not statute-barred. The Council appealed on whether section 11(1) applied to rule (5) compensation, when interest ceased to run, and when the limitation period began.

Appeal dismissed unanimously. Lord Justice Evans gave the leading judgment, with Lord Justices Ward and Nourse agreeing.

1. Section 11(1) of the Compulsory Purchase Act 1965 applies according to its clear terms to compensation assessed under rule (5) of section 5 of the Land Compensation Act 1961. Once rule (5) has been accepted as the basis of compensation, the court cannot reopen that assessment and calculate interest by reference to open-market value. Nor can the agreed reinstatement figure be discounted, or compensation already paid deducted, in a way that negates the statutory right to interest.
2. Interest runs from entry until the compensation is paid. Practical reinstatement did not end the period in 1982. The statutory words “until the compensation is paid” could not be read as “until reinstatement takes place”. The claimant’s arrangements with builders and the Council’s direct payment of building costs did not alter the independent right to compensation for delayed payment. The principle of equivalence supported, rather than defeated, the award because the claimant lacked both the land and its value during the relevant period.
3. Section 9(1) of the Limitation Act 1980 applied. The cause of action for statutory interest arose when the amount on which interest was payable was agreed or awarded. Since overall agreement was not reached until 25 November 1985, the claim was not statute-barred. Interim payments did not create separate earlier accrual dates.
4. The judgments in London Borough of Hillingdon v ARC Ltd and Moore v Gadd concerned accrual of the principal compensation claim, not the statutory interest claim. They therefore provided no assistance on the issue before the court. The appeal was dismissed with costs, and leave to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): Appeal dismissed with costs. Leave to appeal to the House of Lords was refused.
• High Court of Justice, Queen’s Bench Division: Buckley J held that statutory interest was payable from entry until compensation was paid and that the claim was not statute-barred.