Mehrunnisa Alikhan Ahmed Khan v Wolverhampton City Council

Compensation for compulsory acquisition is assessed by reference to the property’s market value at the vesting date. No deduction is made merely because the acquisition is compulsory. A valuation based on the value of a property in good condition less repair costs requires caution, since the market may reflect factors that subjective deductions do not capture. Disturbance compensation must arise from the compulsory acquisition and must be supported by evidence. A claim for a basic loss payment requires a written claim to the acquiring authority; without such a claim, no award can be made, although the claim may remain open.

Wolverhampton City Council compulsorily acquired a vacant semi-detached property under a general vesting declaration. Following the claimant’s non-participation, the Council referred the compensation assessment to the Tribunal under section 1 of the Land Compensation Act 1961.

The Council relied on competing valuations of £150,000 and £120,000. The claimant also alleged that possessions had been removed during earlier cleansing and pest-control works. The issues were the property’s market value at the assumed vesting date, any disturbance compensation, and the claimant’s entitlement to a basic loss payment.

1. Market value. Under section 5 of the Land Compensation Act 1961, the relevant valuation date was the assumed vesting date, 2 August 2022. The property was to be valued as the amount it might be expected to realise in an open-market sale by a willing seller, with no allowance for the compulsory nature of the acquisition.
2. The Tribunal considered the Council’s two valuations. The later valuation of £120,000 used a smaller floor area, different comparable evidence and a different treatment of repair costs, without explaining the changes. Greater weight was given to the valuation made close to the valuation date and used in the Council’s negotiations. The market value was therefore determined at £150,000.
3. The Tribunal noted the caution in Lloyds Banking Group plc v Burnley Borough Council [2024] UKUT 020 (LC) that simply deducting refurbishment costs from a refurbished value may be misleading, because the market may be more nuanced. That caution reinforced the need for care in using subjective deductions.
4. Disturbance. The allegation that possessions were removed during entry in 2017 was unsupported by evidence and did not concern disturbance caused by the compulsory acquisition in August 2022. Any claim relating to the earlier intervention fell outside the Tribunal’s jurisdiction. No disturbance compensation could therefore be determined.
5. Basic loss payment. Following Pramar v The London Borough of Barnet [2015] UKUT 0510 (LC), a basic loss payment claim under section 33E of the Land Compensation Act 1973 had to be made in writing to the acquiring authority. No such claim had been made, so no award was made, although the claimant remained free to make one.
6. The Council was ordered to pay £150,000, together with any statutory interest due from the vesting date.

The matter was a reference by the acquiring authority to the Upper Tribunal under section 1 of the Land Compensation Act 1961. The compulsory purchase order was confirmed following a public inquiry, and the property vested under a general vesting declaration. The Tribunal determined the compensation reference on written representations.