J S Bloor (Wilmslow) Ltd v Homes and Communities Agency

In compulsory-purchase compensation, the statutory planning assumptions and statutory disregards perform distinct functions. The cancellation assumption identifies the planning permissions to be assumed. The disregard provisions, informed by the Pointe Gourde principle, then exclude increases and diminutions attributable to the acquiring authority’s development scheme. The relevant scheme includes its underlying planning policies and their implementation, not merely physical works. Where those policies create planning blight, the tribunal must value the land in a “no scheme world” by considering wider, scheme-independent planning policies. It must not retain scheme-specific policy support while removing only restrictive elements. The appeal was allowed and the assessment remitted.

The Homes and Communities Agency appealed against the Upper Tribunal (Lands Chamber)’s decision awarding £746,000 compensation for the compulsory acquisition of land forming part of the Kingsway Business Park scheme. The Upper Tribunal assessed the value by allowing hope value for an independent residential development accessed through land retained by the claimant, while modifying the effect of planning policies supporting the business-park scheme.

The appeal concerned the interaction between sections 14 to 16 of the Land Compensation Act 1961, including the cancellation assumption in section 16(7), and the disregards under section 6 and Schedule 1. The central issue was how to remove scheme-created benefits and planning blight when valuing the reference land.

1. Appeal allowed. The Upper Tribunal’s decision was set aside and the compensation assessment was remitted for determination without regard to the development scheme as defined by the Court of Appeal.
2. The planning status of the reference land and the prospect of other planning permission are matters for the first stage under sections 14 to 16 of the Land Compensation Act 1961. The cancellation assumption does not require the whole Kingsway Business Park scheme to be treated as cancelled. The first-stage planning assumptions should conform as far as possible to reality.
3. The section 6 exercise is distinct from, but contingent upon, those planning assumptions. It must produce a fair valuation which excludes both scheme-generated increases and scheme-generated diminutions in value. The scheme includes the development strategy, planning policies, planning permissions and compulsory acquisition arrangements, as well as the physical development.
4. The Upper Tribunal was entitled to use a “no KBP universe” or “no scheme world” as a valuation construct. It was wrong, however, to modify scheme-specific policies by retaining their allocation of the land for development while removing their restrictions on independent development. The proper approach was to disregard the scheme and its underlying policies, then consider wider policies, including PPG3, that would have applied to an independent application at the valuation date.
5. The possibility of residential development using the KBP spine and loop roads was properly disregarded because its value was attributable to the scheme. The independent development using the Nib required reassessment on the correct basis. The challenge concerning the remodelled motorway junction failed because the expert evidence showed that it did not affect the value of an independent scheme. The compensation assessment was remitted.

• Court of Appeal (Civil Division): Appeal from the Upper Tribunal (Lands Chamber), which had awarded £746,000 compensation in [2013] UKUT 0231 (LC). The Court of Appeal allowed the appeal, set aside the Upper Tribunal’s decision and remitted the assessment of compensation.