Alfred Yazdiha & Anor v London Borough of Brent

Compensation for a compulsory acquisition must reflect the open-market value at the valuation date, assessed by reliable comparable evidence. A basic loss payment is calculated at 7.5% of the interest’s value, subject to the statutory cap.

Disturbance does not include future rental income merely because an investor has not reinvested compensation. The opportunity to earn rent is reflected in market value and is therefore excluded from disturbance under rule (6). A non-occupying owner may recover qualifying incidental replacement-acquisition expenses only where the statutory conditions are met.

The claimants’ long leasehold interest in a flat was compulsorily acquired by the London Borough of Brent under a regeneration scheme. The vesting date, and agreed valuation date, was 19 January 2016.

After the parties failed to agree compensation, the claimants commenced County Court proceedings. District Judge Marin transferred the matter to the Upper Tribunal for determination, including the County Court costs issue. The Tribunal determined market value, the basic loss payment, disturbance claims, and the consequences of the County Court claim.

The central issues were the proper open-market value and whether claimed replacement costs and lost rental income were recoverable as disturbance compensation.

1. Compensation was determined at £305,625. The Tribunal accepted the acquiring authority’s valuation of £275,000. Its expert had used six relevant arm’s-length sales, adjusted for material differences and time. The claimants’ calculation incorrectly applied values derived from effective floor areas to the flat’s gross internal area, and the higher valuation lacked evidential support.

2. Under Land Compensation Act 1973, section 33(A)(2), the basic loss payment was 7.5% of the assessed value: £20,625.

3. The Tribunal allowed £6,250 for legal and professional costs, including the surveyor’s fee, and £3,750 for SDLT. SDLT was assessed by reference to the valuation date. The payment was effectively by consent because no replacement purchase, and therefore no SDLT liability, had yet been shown.

4. The furniture claim failed for want of evidence. Section 10A of the Land Compensation Act 1961 did not assist non-occupying owners who had not acquired replacement land in the United Kingdom within one year.

5. The loss-of-rent claim was dismissed. Applying Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 1 EGLR 19 and Ryde International PLC v London Regional Transport [2004] EWCA Civ 232, future rental income was not a justified disturbance head. It was not caused by the acquisition in the requisite sense; any rental opportunity formed part of the market value under rule (2), and could not be recovered again under rule (6).

6. The Tribunal rejected the claim for the £10,000 County Court filing fee. It was not caused by the acquisition or reasonably incurred in mitigation. The Tribunal had no jurisdiction over the authority’s County Court defence costs. Although the Council had been seriously dilatory, that did not alter the result on lost rent.

7. On reference costs, the Council was ordered to pay the claimants’ costs until 31 December 2017. Thereafter the claimants were liable for the Council’s assessed costs of £7,370.30 plus applicable VAT, subject to any offset for their assessed costs.

• Upper Tribunal (Lands Chamber): determined compensation at £305,625 and made the consequential costs orders.
• Barnet County Court: on 6 February 2017, District Judge Marin transferred the compensation claim to the Upper Tribunal. The Tribunal held that the County Court transfer order should not have been made and that County Court costs remained for that court.