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

Statutory assumptions about planning permission under the Land Compensation Act 1961 operate in a claimant’s favour but are not exhaustive. They do not prevent compensation from reflecting the prospect of valuable development under the general law.

The no-scheme rule may require alteration of the assumed planning status when valuing compulsorily acquired land. Cancellation of the acquisition in respect of the subject land and disregard of the wider scheme remain distinct exercises.

Planning policies associated with the scheme need not automatically be disregarded. They may remain relevant where they independently demonstrate the land’s development potential. The weight attributable to such policies is primarily a matter for the specialist valuation tribunal.

The respondent authority compulsorily acquired two parcels of grazing land as part of the Kingsway Business Park scheme. The appellant landowner claimed compensation reflecting hope value for residential development. The Upper Tribunal found a 50% prospect of residential planning permission in the no-scheme world and awarded £746,000.

The Court of Appeal, in [2015] EWCA Civ 540, set aside that assessment. It held that the tribunal had wrongly retained planning policies underlying the business park scheme and remitted the valuation.

The landowner appealed. The central issues were whether the statutory planning assumptions conclusively fixed the land’s planning status and whether underlying development-plan policies could remain relevant when applying the no-scheme rule.

1. Appeal allowed unanimously. Lord Carnwath delivered the judgment, with which Lord Neuberger, Lord Clarke, Lord Sumption and Lord Hughes agreed. The Court of Appeal’s order was set aside and the Upper Tribunal’s award of £746,000 restored.

2. The statutory planning assumptions in sections 14–16 of the Land Compensation Act 1961 did not conclusively fix the planning status of the land. Section 14(3) confirmed that those assumptions were not exclusive. They operated in the claimant’s favour and did not deprive a claimant of the right to establish prospective development value under other statutory provisions or the general law.

3. The no-scheme rule could alter the assumed planning status of the acquired land. Melwood Units Pty Ltd v Main Roads Comr [1979] AC 426 demonstrated that compensation could reflect planning permission which would have been obtained but for the scheme. The statutory disregard in section 6 did not impose a narrower approach. The planning-assumption and valuation-disregard stages involved different statutory tests, but that distinction did not make the first stage’s planning assessment immutable.

4. The right to compensation for potential development value was long established. A prospect of valuable planning permission could therefore be reflected as hope value, even where no statutory assumption required permission to be treated as certain. Transport for London v Spirerose Ltd [2009] UKHL 44 confirmed that a prospective permission should be valued as a hope rather than a certainty.

5. The Court of Appeal had wrongly treated disregard of the business park scheme as requiring disregard of all historic, current and emerging policies supporting development on the land. The Upper Tribunal was entitled to find that the underlying allocation and history remained potentially relevant to development apart from the particular scheme. Determining the weight of those matters in the no-scheme world was pre-eminently for the experienced specialist tribunal. Its reasoning disclosed no error of law.

6. The suggested distinction between effects on value and effects on the characterisation of the interest concerned the nature of the proprietary interest, not its planning status. The contrary approach suggested in Myers v Milton Keynes Development Corpn [1974] 1 WLR 696 lacked detailed legal analysis and had not been followed in later cases.

1. United Kingdom Supreme Court: Allowed the landowner’s appeal unanimously, set aside the Court of Appeal’s order and restored the Upper Tribunal’s compensation award: [2017] UKSC 12.

2. Court of Appeal: Allowed the acquiring authority’s appeal, set aside the valuation and remitted compensation for redetermination without regard to the scheme as defined by that court: [2015] EWCA Civ 540.

3. Upper Tribunal: Found a 50% prospect of residential planning permission in the no-scheme world and awarded compensation of £746,000. Its citation is not stated in the judgment.