Kent County Council v Union Railways (North) Ltd.& Anor

An acquiring authority using compulsory purchase powers must address all compensatable interests required for the scheme, including an option to purchase where leaving it outstanding could defeat the scheme. A claimant whose interest was omitted may initiate the statutory procedure for compensation under section 22 of the Compulsory Purchase Act 1965. That provision is a deeming mechanism: compensation may be assessed as if the interest had been acquired before entry, without requiring every acquisition step to be replicated. A genuine claim to statutory compensation concerning entitlement or amount may be referred to the Lands Tribunal.

The Council compulsorily acquired land from Blue Circle plc for a road near the proposed Channel Tunnel Rail Link. Union Railways claimed that interests acquired from Blue Circle, including options to purchase and related rights, were compensatable because the road works prevented their use and caused diversion and delay costs.

The Council had served notices to treat on Blue Circle but not Union Railways. It disputed both the claimed interests and the need to acquire them. The Lands Tribunal held that the Council could not omit necessary interests, that a claimant could refer a claim despite the absence of a notice to treat, and that it had jurisdiction to determine entitlement to compensation. The Council appealed on the construction and interaction of sections 5, 10 and 22 of the Compulsory Purchase Act 1965.

Carnwath LJ gave the leading judgment, with Keene LJ and Ward LJ agreeing.

1. Appeal allowed on the section 22 issue. If the claimed options were valid compensatable interests, they were interests the Council needed to acquire for the road scheme. Following Oppenheimer v Minister of Transport [1942] 1 KB 242, acquisition of the freehold without acquiring or securing release of such options would not serve the statutory purpose.
2. Whether the Council had made a mistake or acted inadvertently by omitting the interests could not be decided until their validity was established. If the options were valid interests requiring notice to treat, the Council would in law have made that omission, whatever its stated intention.
3. The claimant was entitled to initiate the procedure under section 22 of the Compulsory Purchase Act 1965. The provision’s protective purpose did not prevent the claimant taking the first step where the authority had entered into possession and there was no realistic prospect of giving it up. The Scottish authorities supported the view that either party could trigger the procedure.
4. Section 22 operates as a deeming provision. Compensation is to be assessed and awarded as if the authority had acquired the interest before entering the land, or as near to that procedure as circumstances permit. A notice to treat was therefore not an indispensable procedural trigger for the Tribunal’s jurisdiction.
5. It was unnecessary to decide the alternative section 10 route. The court nevertheless indicated that section 10 may have a wider function than compensation for injurious affection to land not taken, because its opening words refer expressly to land that has been taken. Section 1 of the Land Compensation Act 1961 was also regarded as potentially sufficient authority for referring a genuine claim for statutory compensation, whether concerning entitlement or amount, to the Lands Tribunal.
6. All issues concerning Union Railways’ entitlement to, and the amount of, compensation were remitted to the Lands Tribunal for determination in light of the judgment.

• Court of Appeal (Civil Division): Allowed the appeal on the construction and operation of section 22 of the Compulsory Purchase Act 1965. All issues relating to entitlement and amount were remitted to the Lands Tribunal.
• Lands Tribunal: Held that the acquiring authority could not omit necessary interests, that a claimant could refer a claim despite no notice to treat, and that the Tribunal had jurisdiction to determine entitlement to compensation.