G & B Compressor Hire Limited v The Greater London Authority

Under Land Compensation Act 1961, section 5, Rule (6), a claimant must prove that a claimed disturbance loss was caused by compulsory acquisition. A claim for lost profits from an unrealised business expansion fails where the evidence does not establish a realistic prospect that the proposed activity could lawfully and practically have operated at the acquired site.

Compensation for increased costs is not recoverable where the replacement premises provide value for money through materially better or more extensive facilities. A directly caused operational cost may nevertheless be allowed on a fair assessment, with credit for value received.

The claimant operated a skip-hire and waste-transfer business from land compulsorily acquired for the Olympic Park development. It relocated through a temporary site to larger purpose-built premises provided at Thames Wharf.

In a reference under section 5, Rule (6) of the Land Compensation Act 1961, it claimed disturbance compensation for lost core profits, a lost opportunity to introduce hook-loader and compactor services, increased operating and fleet costs, relocation costs and professional fees.

The central questions were whether the alleged losses were caused by the acquisition, whether the former site could have accommodated the proposed expansion, and whether the greater costs of the replacement premises provided value for money.

1. Compensation was determined at £671,004, subject to deduction of advance payments of £387,304. The claimant established temporary-site trading loss, relocation costs, professional fees, an occupier’s loss payment, and limited increased operating costs. The remaining substantial heads failed.

2. The claim for loss of core trading profits was unproven save for £91,101 accepted for the temporary occupation. The claimant’s accountant’s model assumed unsupported growth derived from a different part of the business. There was no reliable evidence identifying lost local trade or showing that it had not been replaced by business gained at the relocation premises.

3. The alleged lost opportunity to commence hook-loader and compactor operations was also unproven. The Tribunal preferred the acquiring authority’s waste-management evidence. The former licensed working area was congested and constrained. It could not realistically have accommodated the increased waste tonnages and vehicle movements without exceeding daily limits and creating serious over-capacity problems. In any event, revised licensing, planning consent and potentially substantial works would probably have been required.

4. The higher costs of the replacement premises were generally not compensable. The larger, purpose-built and better laid-out site supplied value for money, including a waste-transfer building effectively provided rent-free. The Tribunal allowed £80,663, being 50 per cent of the hire cost of a safer re-handler directly necessitated by relocation, and £9,000 for additional advertising.

5. New fleet vehicle costs were not caused by the acquisition. The decision to buy new vehicles preceded knowledge of the relocation site, and no evidence proved increased mileage, wear or loss attributable to the move.

6. In the costs addendum, the acquiring authority was ordered to pay 50 per cent of the claimant’s costs on the standard basis. Although the claimant had bettered the sealed offer, the bulk of its inflated and misguided claim had substantially escalated the costs, applying the approach in Purfleet Farms Ltd v Secretary of State for Transport, Local Government and the Regions [2003] 1 P&CR.

not stated in the judgment.