Nigel Elston Bishop & Anor v Transport for London

A claimant seeking compulsory-purchase compensation for lost remuneration must prove, on the balance of probabilities, that the acquisition caused a real loss. The assessment of a discontinued business may include uncertainty and does not demand exact proof of every future payment. It nevertheless requires credible evidence that the business could have generated the claimed income.

Where an enterprise was already unprofitable and unsustainable, and its directors could not properly continue paying themselves, the acquisition does not cause their lost remuneration. Reasonable costs personally incurred in clearing land may be recoverable where the acquisition caused that expenditure.

The claimants held a lease of land used by their family’s scrap-metal businesses. Transport for London acquired the land for the Crossrail project under section 6 of the Crossrail Act 2008.

The company then trading from the land, MRS, ceased business and entered liquidation. The claimants sought over £4 million, principally for remuneration allegedly lost for the unexpired lease term. They also sought costs of clearing the site, rent paid after the business ceased, and a loss on disposal of equipment.

The central issues were whether the acquisition caused the alleged personal losses and whether the claimants had proved that a sustainable business could have continued to remunerate them.

1. The claim succeeded only in part. The Tribunal awarded £46,815, inclusive of VAT, for the claimants’ personal expenditure in clearing the site. It dismissed the claims for future remuneration, post-cessation rent, and loss on the disposal of equipment.

2. Rule 6 in section 5 of the Land Compensation Act 1961 permits a lessee to claim personal loss consequential on acquisition which is not directly based on land value. The Tribunal accepted, consistently with Wrexham Maelor Borough Council v MacDougall (1995) 69 P&CR 109, that lost remuneration could in principle fall within that rule.

3. Applying the three conditions identified in Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111, the claimed loss had to be caused by the acquisition, not too remote, and reasonably mitigated. Future loss was to be assessed on the balance of probabilities; uncertainty did not require exact proof or compel a nil award.

4. However, MRS was already unable to continue trading without a successful turnaround. Its projected recovery rested on unsupported assumptions about additional income and large cost savings. The earlier family companies had also failed, and MRS was insolvent when notice of entry was served. The claimants therefore failed to prove that they could lawfully continue receiving remuneration, or that its loss was caused by the acquisition. The remuneration claim was assessed at nil.

5. The clearing invoices were addressed to, and paid by, the claimants after MRS had entered liquidation. On balance, they had incurred the expenditure personally because the acquisition gave them an incentive to clear and deliver up the site. That loss was allowed. The rent claim failed because MRS would have failed irrespective of acquisition. The equipment claim failed because ownership and any loss on sale were not proved.

6. On costs, applying section 4 of the Land Compensation Act 1961, the claimants were ordered to pay 80% of TfL’s costs incurred before 9 February 2017, subject to the stated exclusion, and all its costs incurred thereafter. Set-off was permitted.

not stated in the judgment.