Ranjana Zeena Parmar v The London Borough of Barnet

Compensation for compulsory acquisition must reflect the open-market value of the interest at the valuation date, including established redevelopment potential. A comparable sale which already reflects redevelopment potential must not also be reduced by redevelopment costs.

A basic loss payment under Land Compensation Act 1973 requires a written claim to the acquiring authority. The Tribunal may determine the amount payable if a compliant claim is later made within the applicable limitation period. A claimant’s failure to particularise a claim does not necessarily justify the usual costs consequences where the acquiring authority could nevertheless make a proper settlement offer.

The acquiring authority compulsorily acquired the claimant’s freehold interest in a derelict detached house. Possession was taken on 15 January 2014, which was the valuation date. The authority referred the disputed compensation to the Tribunal after the claimant did not respond to the notice to treat.

The claimant filed no valuation evidence, did not attend the hearing, and was debarred from calling expert evidence. The principal issues were the property’s open-market value, entitlement to home or basic loss payments, and the costs consequences of the claimant’s failure to submit a particularised claim.

1. Compensation was determined at £650,000. The Tribunal preferred a direct comparison with the sale of 35 Edgeworth Crescent. That sale reflected redevelopment potential and was therefore a direct comparable for the derelict property, which also had planning permission for substantial extension. After a 5% adjustment for the comparable’s greater redevelopment advantages, the Tribunal assessed the value at £650,000.

2. The authority’s valuation method which treated the comparable as an existing three-bedroom house and then deducted restoration costs was unsound. The comparable’s sale price had already reflected the costs and potential of redevelopment. A further deduction would double-count those costs. The Tribunal used other residual valuations only as supporting checks.

3. Section 5A(2) of the Land Compensation Act 1961 precluded an adjustment for events after the valuation date. The sale of the adjoining house after that date was nevertheless used as a check because of its proximity, rather than as the principal valuation method.

4. No home loss payment was due under section 29(2) of the Land Compensation Act 1973. There was no evidence of occupation as the claimant’s only or main residence during the required year, or at displacement for a discretionary payment.

5. The claimant qualified in principle for a basic loss payment and was not excluded by section 33D. However, unlike a home loss payment, a basic loss payment required a written claim under section 33E. No award was therefore made. A later compliant claim could still be made within the limitation period; on the Tribunal’s valuation, it would be £48,750.

6. On costs, the Tribunal applied the purpose of section 4 of the Land Compensation Act 1961, as explained in Spirerose Limited v Transport for London [2008] RVR 12. Although the claimant acted unreasonably, the authority could make a proper offer without a particularised claim and its £600,000 sealed offer was unsuccessful. The claimant was ordered to pay the authority’s costs only up to 4 March 2015; thereafter each party bore its own costs.

not stated in the judgment.