Secretary of State for Transport v Curzon Park Ltd & Ors

In compulsory-purchase compensation, appropriate alternative development is assessed by reference to a hypothetical planning application at the relevant valuation date, applying ordinary planning principles to the real world subject only to statutory assumptions. Applications for certificates of appropriate alternative development concerning other land acquired for the same scheme are not hypothetical planning applications and must be disregarded. A certificate is a valuation mechanism, not planning permission.

The reality principle requires the statutory hypotheses to be taken no further than necessary. The principle of equivalence may assist in resolving genuine ambiguity, but it does not authorise courts or tribunals to add assumptions, correct anomalies or rewrite the statutory code. Later applications or decisions cannot adjust the valuation where they were unknown at the valuation date.

The Secretary of State appealed from the Upper Tribunal (Lands Chamber), which had determined a preliminary issue concerning four contiguous sites acquired for the HS2 terminus in Birmingham. Each owner sought, or obtained, a certificate of appropriate alternative development under the Land Compensation Act 1961. The Secretary of State argued that the decision-maker should consider the cumulative effect of those applications when assessing compensation for each site.

The Upper Tribunal held that the applications and certificates were not material planning considerations, although they could be given evidential weight. The central issues before the Court of Appeal were whether the cancellation assumption required applications concerning other sites to be disregarded, and whether a certificate could be treated as a planning permission for the purposes of assessing appropriate alternative development.

1. Appeal and preliminary issue. The Court of Appeal unanimously dismissed the appeal, subject to varying the answer to the preliminary issue. In relation to a particular parcel, the decision-maker was not entitled to take account of CAAD applications or decisions concerning other land arising from the same underlying scheme. Such applications were not notional applications for planning permission and were not material planning considerations.
2. Statutory assumptions and reality. Lewison LJ held that the starting point was the real world, modified only by an express statutory assumption or what was necessarily inherent in an open-market valuation. The cancellation assumption in section 14(5)(a) necessarily meant that no CAAD applications could have been made in the no-scheme world, because the proposal for compulsory acquisition required by section 17(1) would not exist. Section 14(5)(b) remained effective because it addressed action taken for scheme purposes before the launch date.
3. The fact that CAADs were valuation mechanisms, rather than planning permissions, was decisive. A CAAD had no effect on land use in the real world. Section 14(4) permitted other land to be considered only where it formed part of the same notional planning application. It did not permit the decision-maker to combine separate CAAD applications or certificates. This conclusion was consistent with the approach in Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340 and Fletcher Estates (Harlescott) Ltd v Secretary of State for the Environment [2000] 2 AC 307.
4. Post-valuation-date CAAD applications could not alter the valuation. Section 5A(2) prohibited an adjustment based on later events. Evidence of later transactions was conceptually different from reliance on later events or information, and there was no presumption of continuity applicable here. The cumulative possibility of overcompensation did not justify judicial alteration of the statutory scheme.
5. Equivalence and statutory construction. The principle of equivalence and fair compensation was subject to the statutory code. It could assist in resolving ambiguity, but was not an independent power to add assumptions or remedy anomalies. The Senior President of Tribunals emphasised that purposive construction was legitimate, whereas judicial legislation was not. The court and tribunal had to apply the statutory language as enacted, consistently with Transport for London v Spirerose Ltd [2009] UKHL 44.
6. Costs. The costs appeal was also dismissed. Section 17(10) permitted reasonable expenses connected with the issue of a CAAD to be taken into account as compensation. The Upper Tribunal’s order that reasonable costs were payable left open both whether the costs were reasonably incurred and whether their amount was reasonable.

• Court of Appeal (Civil Division) — appeal dismissed, with the preliminary issue answer varied: [2021] EWCA Civ 651.
• Upper Tribunal (Lands Chamber) — preliminary issue determined concerning the treatment of CAAD applications and decisions relating to other land: [2020] UKUT 0037 (LC), [2020] RVR 154.