Wildtree Hotels Ltd v Harrow London Borough Council

Compensation for land injuriously affected under section 10 of the Compulsory Purchase Act 1965 requires damage which, without statutory authority, would have been actionable and which affects land rather than the claimant personally.

Temporary interference is not excluded. A claimant may recover a proved reduction in the land’s open-market letting value during the interference, even though no loss remains at the valuation date. Loss of business profits is not recoverable as such, but may evidence diminished land value.

Noise, dust and vibration can damage land through reduced amenity. Ordinarily, however, construction causing actionable nuisance will fall outside statutory protection, while reasonably conducted construction will not be actionable.

The owners of a hotel claimed compensation under section 10 of the Compulsory Purchase Act 1965 after statutory bridge and road works obstructed access and caused noise, dust and vibration. No hotel land had been compulsorily acquired.

The Lands Tribunal determined three preliminary questions concerning non-physical interference, consequential non-actionable loss and temporary interference. The Court of Appeal, by a majority on the first and third questions, decided all three questions against the claimants: [1999] Q.B. 634.

The central issues were whether construction noise, dust and vibration could attract compensation; whether an actionable obstruction permitted recovery for other, independently non-actionable loss; and whether temporary diminution in the value of land could be compensated after the interference had ended.

1. Appeal allowed in part unanimously. Lord Hoffmann delivered the leading speech. Lord Steyn, Lord Browne-Wilkinson, Lord Nolan and Lord Hobhouse agreed with his reasons and proposed order. The Lands Tribunal’s opinion on the third preliminary question was restored; the appeal was otherwise dismissed.

2. Per Lord Hoffmann, section 10 of the Compulsory Purchase Act 1965 compensates injurious affection to land caused by the execution of authorised works, even where no land is taken. The injury must have been actionable but for statutory authority, ordinarily as public or private nuisance. It must affect the claimant’s land or interest in land, rather than merely causing personal or trading loss. Damage caused by acts outside the statutory powers remains actionable at common law and is not compensable under section 10.

3. Noise, dust, vibration and other interference with amenity may reduce the value of land and are not conceptually excluded merely because they cause personal discomfort rather than structural damage. In practice, however, such a claim will rarely satisfy all the governing conditions. Reasonably conducted temporary building operations are not actionable nuisance. Operations conducted without reasonable regard for neighbours ordinarily fall outside statutory immunity. The claim relating to noise, dust and vibration therefore failed.

4. An actionable public nuisance caused by obstruction of a highway does not create a parasitic claim for independently non-actionable noise or dust. Each alleged head of damage must satisfy the common-law actionability requirement. The Lands Tribunal and Court of Appeal correctly rejected the claimants’ broader submission.

5. Temporary damage is not excluded merely because it has ended by the agreed valuation date. The character of the injury matters more than its duration. Compensation is not confined to the difference between capital values at one date. Past damage may be measured by the reduction in the land’s open-market letting value during the period of interference.

6. Loss of profit remains irrecoverable as such. It may nevertheless provide evidence that interference reduced the open-market value of premises suitable for the relevant type of business. A claimant proving such diminished value, for whatever compensable period, may recover it as damage to land.

1. House of Lords: The appeal was allowed in part. The Lands Tribunal’s opinion on the third preliminary question was restored, but the appeal was otherwise dismissed: [2001] 2 AC 1 .
2. Court of Appeal: By a majority on the first and third questions, the court decided that noise, dust and vibration were not compensable and that temporary interference ending before the valuation date was not compensable. It unanimously held that only damage actionable in the absence of statutory powers could be recovered: [1999] Q.B. 634.
3. Lands Tribunal: Judge Rich QC determined agreed preliminary questions of law. He rejected the proposed claim for noise, dust and vibration and the claim for independently non-actionable loss, but accepted that temporary interference could be compensable.