Wildtree Hotels Ltd v Harrow London Borough Council

Under section 10 of the Compulsory Purchase Act 1965, compensation for injurious affection is confined to loss of value or damage to land or an interest in land. The claimant must show an actionable interference, physical injury to land or physical interference with a right used in connection with it, causation, and diminution in value. Obstruction of access may qualify. Compensation cannot include personal business loss or damage not recoverable in tort. The majority held that temporary diminution which had ended by the valuation date was not compensable, and that noise, dust and vibration causing only temporary disturbance did not qualify without damage affecting the completed value of the land.

Wildtree Hotels Ltd appealed by case stated from a preliminary ruling of His Honour Judge Rich QC, sitting in the Lands Tribunal. A road improvement scheme was carried out near the hotel between 1989 and 1994, without land being taken from the appellants. They claimed compensation under section 10 of the Compulsory Purchase Act 1965 for noise, dust and vibration, hoardings, and obstruction of access and public highways.

The questions were whether direct physical interference was required, whether all injurious affection caused by qualifying works was recoverable, and whether temporary interference ending before the valuation date could found a claim.

1. Majority: Pill LJ and Peter Gibson LJ. The appeal was dismissed and the respondent’s cross-appeal allowed. Section 10 of the Compulsory Purchase Act 1965 gives the same substantive right as section 68 of the Lands Clauses Consolidation Act 1845. It is confined to injury to land or an interest in land, and does not compensate personal loss or business loss as such.
2. The statutory conditions are cumulative. The interference must result from the lawful execution of the authorised works, be actionable if done without statutory authority, affect land or a right used in connection with land, and cause diminution in the value of the property. Actionability alone is insufficient. The majority held that physical injury to land or physical interference with a land-related right was required. The claims concerning hoardings and access were capable of falling within section 10, subject to proof of the necessary diminution in value. Noise, dust and vibration causing only temporary disturbance did not qualify without damage affecting the value of the land when the works were complete.
3. Compensation could not exceed damages recoverable in tort. Once a qualifying interference was established, the claimant could recover only loss causally resulting from that interference. Section 10 did not permit recovery of every adverse consequence of the works.
4. Compensation was assessed by comparing the value of the land before and after the works. The majority declined to treat Ford v Metropolitan and Metropolitan District Railway Companies [1886] 17 QBD 12 as establishing a general right to compensation for temporary diminution which had ended by the valuation date. The majority also held that the temporary loss-of-rental-value approach advanced by the appellants could not be reconciled with the authorities.
5. Ward LJ dissenting. He considered that physical damage was not an exhaustive requirement. Relying on the tort-of-land analysis in Hunter v Canary Wharf Ltd [1997] AC 655, he would have treated nuisance by noise, dust and vibration as capable of injuriously affecting land. He also considered Ford binding on temporary interference and would have allowed the appeal on Question 1 and dismissed the cross-appeal, while agreeing with the majority on Question 2.

The matter was remitted to the Lands Tribunal for further hearing. The appellants were ordered to pay the respondent’s Court of Appeal costs.

• Court of Appeal: On 11 June 1998, the majority dismissed the appeal, allowed the respondent’s cross-appeal, and remitted the matter to the Lands Tribunal.
• Lands Tribunal: His Honour Judge Rich QC determined preliminary legal questions on 10 December 1996 concerning compensation under section 10 of the Compulsory Purchase Act 1965.