Moto Hospitality Ltd v Secretary of State for Transport

Under section 10 of the Compulsory Purchase Act 1965, the works may include the whole project authorised by a composite package of statutory orders, including stopping-up works under the same Act and by the same authority. Compensation for injurious affection still requires particular, direct and substantial damage to land or an interest in land. A special relationship between a site and a highway is only part of that inquiry. A reduction in land value caused by altered access may be compensable, but loss caused by rearrangement of a junction as a whole is too remote where immediate accesses remain substantially unaffected. The appeal was allowed on the permanent claim, with the issue of temporary disruption remitted.

Moto operated a motorway service area under a sub-lease. Highway improvements at the Ardley interchange altered roundabouts, slip roads and traffic routes. Moto claimed compensation under section 10 of the Compulsory Purchase Act 1965 for permanent diminution in the value of its leasehold interest and temporary disruption during the works.

The Lands Tribunal answered a preliminary issue in Moto’s favour in its decision dated 29 July 2006, LCA/122/2005. The Secretary of State appealed on points of law concerning the scope of the statutory works, the effect of stopping-up orders, the link with compulsory acquisition, and whether Moto had suffered particular damage.

Lord Justice Carnwath delivered the judgment of the court. The Lord Chief Justice and Tuckey LJ agreed. The appeal was allowed in respect of the permanent stopping-up claim, and the temporary-closure issue was remitted to the Lands Tribunal.

1. Scope of the statutory works. Section 10(2) of the Compulsory Purchase Act 1965 preserved the same right to compensation as section 68 of the Land Clauses Consolidation Act 1845. The court therefore adopted a broad and purposive construction. In a composite highway scheme, the special Act included all statutory provisions and orders empowering the project, not merely provisions authorising compulsory acquisition. Compulsory acquisition powers affecting part of the land were sufficient to engage section 10 for the scheme as a whole.
2. Stopping-up. Stopping-up provisions formed part of the works where they were made under the same Act, by the same authority, and as part of the composite scheme. Jolliffe v Exeter Corporation [1967] 1 WLR 993 was confined to stopping-up under a different statutory scheme and by a different compensating authority.
3. Particular damage. The public-nuisance analogy required damage that was particular, direct and substantial. The special relationship between a motorway service area and the highway was only a starting point. The immediate accesses to the MSA remained substantially unaffected. The loss resulted from the rearrangement of the junction as a whole, including the new Padbury roundabout, and the individual obstructions were incidental and inseparable from that scheme. The permanent claim was therefore too remote.
4. Business loss. Loss of business did not itself defeat a claim. A reduction in the value or letting value of land caused by interference with the convenient conduct of business could in principle be compensable, although lost profits as such were not recoverable.
5. Temporary closures. The Tribunal had made no findings on temporary disruption during construction. That issue remained open and was remitted.

1. Court of Appeal (Civil Division) — [2007] EWCA Civ 764. Allowed the Secretary of State’s appeal concerning the permanent claim and remitted the temporary-closure issue.
2. Lands Tribunal — Decision dated 29 July 2006, LCA/122/2005. Answered the preliminary issue in favour of Moto.