Bolton Metropolitan Borough Council v Tudor Properties Ltd & Ors

The Pointe Gourde principle requires compensation to exclude any increase in land value entirely attributable to the scheme underlying compulsory acquisition. Identifying that scheme is a question of fact reached by applying the legal principle to all relevant evidence. The scheme need not be confined to the land acquired, the purposes of the compulsory purchase order, or activities involving compulsory acquisition. Earlier works, private-sector land assembly and expert valuation evidence may all be relevant, but none is determinative. An appellate court hearing an appeal on a point of law must respect the specialist tribunal’s factual conclusions unless the tribunal applied the wrong legal principle, gave inadequate reasons or reached a perverse conclusion.

Bolton Metropolitan Borough Council appealed on a point of law against an award by the Lands Tribunal of compensation for the compulsory acquisition of land at Watersmeeting under the Bolton (Watersmeeting) Compulsory Purchase Order.

The Tribunal held that the relevant underlying scheme was the narrower scheme for leisure development of the Watersmeeting site by THI, rather than the wider regeneration of the Tonge Valley. The Council challenged the Tribunal’s treatment of earlier infrastructure works, private-sector land assembly and expert evidence, and alleged inadequate reasons under Rule 50(1) of the Lands Tribunal Rules 1996. The central issue was whether the Tribunal had erred in law in identifying the scope of the underlying scheme.

Appeal dismissed. The Court of Appeal held that the Lands Tribunal had applied the correct legal principle and had given sufficient reasons.

1. The Pointe Gourde principle is a rule of law, not a valuation principle. It requires an enhancement entirely attributable to the underlying scheme to be ignored, but does not exclude value attributable to factors independent of that scheme, including pre-scheme development value.
2. The underlying scheme must first be identified as a matter of fact. It is not necessarily confined to the land compulsorily acquired or to the purposes stated in the compulsory purchase order. It may extend beyond the acquired land and may evolve over several years.
3. The Tribunal was entitled to consider earlier improvements elsewhere in the Tonge Valley. Their completion before the Council resolved to seek compulsory powers was a relevant factor, although the Tribunal did not establish any rule that earlier works could never form part of the scheme.
4. The Tribunal was also entitled to regard private-sector land assembly as tending to show that there was no single wider scheme underlying the compulsory purchase order. It did not assume that a scheme could never be wider than the order or had to contemplate compulsory acquisition of the subject land.
5. Expert evidence could assist the Tribunal in understanding the documentary and valuation material. The Tribunal itself remained responsible for deciding the factual scope of the scheme and was entitled to take account of the experts’ views, including the preference expressed by the Council’s expert for the narrower approach.
6. The Tribunal’s reasons satisfied Rule 50(1) of the Lands Tribunal Rules 1996. It was unnecessary to determine the submissions concerning Simplex GE (Holdings) Limited v Secretary of State or section 6 and Schedule 1 to the Land Compensation Act 1961. The appeal was dismissed, with detailed assessment of costs and £20,000 payable on account.

1. Lands Tribunal: awarded £2,211,202 to Tudor Properties Ltd and £60,186 to McGrath and Walsh for the compulsory acquisition, applying the narrower leisure-development scheme.
2. Court of Appeal (Civil Division): dismissed the Council’s appeal on the point of law and upheld the Tribunal’s approach.