Aslam v South Bedfordshire District Council

On an appeal on a point of law from the Lands Tribunal, the Court of Appeal must respect the Tribunal’s fact-finding function and must not substitute its own view on the evidence. A Tribunal errs in law if it fails to consider material evidence or makes an unsupported deduction. Compensation for loss of future profits may be assessed by discounted cash flow. Where the calculation uses real-value money and assumes early receipt, interest may be necessary to provide full compensation for delayed payment. The Lands Tribunal had discretionary power under its rules to award such interest. An award must avoid compensating the claimant twice for the same loss.

The appeal arose from a reference to the Lands Tribunal concerning compensation payable by South Bedfordshire District Council after a discontinuance order ended the appellant’s slaughterhouse use. The Tribunal awarded compensation for lost profits, interest on a business development loan and loss on the forced sale of fixtures.

The appellant challenged the valuation of skins and other saleable parts and contended that interest was payable on the compensation. The appeal under Lands Tribunal Act 1949, section 3(4), raised questions of law rather than fact. The central issues were whether the Tribunal’s evidential deductions were legally sustainable and whether interest could be awarded for delayed payment.

1. Appeal allowed. The Court substituted £5 per saleable skin for the Tribunal’s figure of £3.75 and £1.50 per sheep for “other parts” instead of £1.00.
2. The Tribunal had erred in law by failing to take account of unchallenged evidence relevant to the proportion of skins which were saleable. Its conclusion that 25 per cent were unsaleable could not stand. The Tribunal was nevertheless entitled to find that the average price of a saleable skin was £5, because it could prefer evidence that a substantial proportion of sheep in the relevant trade were cull ewes and that lower-value skins affected the average.
3. The Tribunal was entitled, as a matter of fact, to allow wastage of approximately 45 per cent for other parts. That conclusion was supported by evidence and was not erroneous in law. However, the further reduction from £1.50 to £1.00 was unsupported. There was no evidence that the claimant would not have retained the other parts, and the reduction for the intestines should have been made before applying the wastage discount.
4. Knibb v National Coal Board [1987] 1 QB 906 did not establish a general power to award interest on statutory compensation. It depended on the particular statutory power to award damages in that case. A reference under section 118(1) of the Town and Country Planning Act 1990 determined disputed compensation and was not proceedings for recovery of a debt or damages.
5. Nevertheless, rule 32 of the Lands Tribunal Rules 1996, incorporating section 19A of the Arbitration Act 1950, gave the Tribunal power to award discretionary interest. Given that the discounted cash flow valuation treated the claimant as receiving real-value compensation early, refusal to award interest for the period of delay would be plainly wrong. Interest was therefore directed from the effective date of the discontinuance order to payment.
6. The award had to be reduced by £14,365 for accrued interest on the development loan. Allowing both that sum and interest on the compensation would, on the majority view, compensate the claimant twice for the same loss. The order was made in the form proposed by Chadwick LJ, with costs and written submissions concerning the interest rate.

• Court of Appeal (Civil Division): appeal from the Lands Tribunal allowed. The Court directed revised calculations and awarded interest pursuant to the applicable Lands Tribunal rules. Permission to appeal to the House of Lords was refused.