Sheila Grace Hall v London Borough of Hillingdon

In compulsory-purchase compensation, a claim for ransom value requires a real special value at the valuation date. An expired contractual obligation to use reasonable endeavours to acquire land does not create such value where neither the planning permission nor the agreement prevents the developer using its completed development without acquiring the land.

Hope value for built development may be discounted below existing-use value where planning prospects in the Green Belt are insufficient. An assumed rebuilding permission under section 15(3) of the Land Compensation Act 1961 adds little where the former buildings cannot be identified with sufficient certainty for implementation. Disturbance for lost stock is not recoverable without reliable proof and reasonable mitigation.

The claimant’s scrap yard was compulsorily acquired by the London Borough of Hillingdon under a 2003 compulsory purchase order. The agreed valuation date was 23 July 2008.

The claimant sought compensation based principally on alleged ransom value to British Airways plc, which had entered planning obligations connected with an adjoining office and park development. Alternatively, she claimed hope value for development, existing-use value as a scrap yard, and disturbance for the removal or loss of stock.

The central issues were whether British Airways remained a special purchaser at the valuation date, whether planning prospects added hope value, the open-market value of the established scrap-yard use, and the extent of any compensable disturbance.

1. Compensation was determined at £552,000, comprising £532,000 for the land and £20,000 for disturbance. The Tribunal later made no order as to costs.

2. The ransom-value claim failed. The reasoning in Potter v London Borough of Hillingdon [2010] UKUT 212 (LC) was directly applicable. British Airways’ obligation to use reasonable endeavours to acquire the land expired on 31 December 2000. Thereafter, neither the 1992 planning permission nor the replacement section 106 agreement prevented it from using its office development without acquiring the land. Ownership of neighbouring Cambridge Lodge also created no significant marriage value because of Green Belt restrictions.

3. The hope-value claim failed. A prospective developer would heavily discount the chance of obtaining acceptable residential or industrial permission in the Green Belt. A purchaser wishing to continue the valuable lawful scrap-yard use would therefore outbid one relying on alternative development. The assumed rebuilding permission under section 15(3) of the Land Compensation Act 1961 carried little weight because the former cottages could not be identified sufficiently clearly to enable reliable implementation.

4. The land was valued in its existing scrap-yard use. The Tribunal treated the 1997 and 1998 offers as some evidence of value, adjusted the imperfect comparable evidence, recognised a premium for the scarcity of scrap-yard use, and allowed no substantial contamination deduction. It assessed the value at £700,000 per acre, or £532,000.

5. The substantial disturbance claim was rejected. The claimant and her family knew that the land had vested in the authority, did not take reasonable steps to mitigate, and produced no reliable independent proof of the alleged value of stock given away. A modest award of £20,000 was appropriate.

6. Although the claimant had failed to give a sufficiently detailed and timely compensation notice under section 4 of the Land Compensation Act 1961, the award substantially exceeded the authority’s offers and aspects of its valuation evidence required correction. The fair order was therefore no order as to costs.

not stated in the judgment.