Mustafa Behic & Ors v Northumberland County Council

A person whose land is compulsorily acquired may recover reasonable compensation for time personally spent dealing with the acquisition. In a small family business, the tribunal may infer that diversion of proprietors from the business caused loss, even where precise quantification is impracticable. A robust and modest assessment may therefore be appropriate.

Compensation remains subject to proof. Unsupported claims for lost stock, redundancy payments, or other business losses will fail. Where an unconditional statutory offer exceeds the award, the claimant will ordinarily bear post-offer costs unless special reasons justify a different order.

The Council compulsorily acquired commercial premises at 4 and 4A Station Street, Blyth, under a town-centre redevelopment scheme. The freeholder, the company operating a takeaway at No 4, and the tenant operating a retail business at No 4A claimed compensation.

The claimants did not attend the hearing or provide expert or witness evidence to challenge the acquiring authority’s valuation evidence. The reference concerned the freehold value, disturbance and business-extinguishment losses, statutory loss payments, and the first claimant’s time in pursuing compensation.

The Tribunal later considered costs after the acquiring authority’s unconditional offers exceeded the compensation determined for each claimant.

1. Compensation was determined at £201,073. The Tribunal accepted the acquiring authority’s unchallenged expert evidence. It valued the freehold interest at £150,000 and awarded the first claimant £2,000 for time spent pursuing the claim, plus a £11,250 basic loss payment.

2. Following Lancaster City Council v Thomas Newall Ltd [2013] EWCA Civ 802, an individual who reasonably spends time dealing with compulsory acquisition may in principle recover the resulting loss. In a small family business, it was reasonable to infer that proprietors’ diversion from their ordinary work had value to the company and caused loss. Precise quantification may be impossible; applying the robust approach recognised in W Clibbett v Avon CC [1976] 1 EGLR 171, a modest award was appropriate.

3. The Tribunal accepted compensation for Mermer Ltd’s goodwill (£15,000), equipment loss after credit for auction proceeds (£13,790), and its occupier’s loss payment (£3,055). It rejected unproved claims for lost stock and redundancy-related payments. It also accepted the acquiring authority’s assessment of £5,978 for the third claimant’s extinguished business and occupier’s loss payment, despite the absence of a claim.

4. Under Land Compensation Act 1961 section 4, the claimants’ awards did not exceed the acquiring authority’s unconditional offers. No special reason displaced the usual costs consequence. The Tribunal awarded reasonable post-offer costs of £15,838.35, apportioned between the claimants and deductible from compensation. The second addendum confirmed that the decision was final in all respects.

This was a first-instance compensation reference in the Upper Tribunal (Lands Chamber). The land vested in the acquiring authority following confirmation of the compulsory purchase order and a general vesting declaration. No appeal from a lower judicial decision is stated.