Harnek Singh Samra & Anor v Sandwell Metropolitan Borough Council

Where the principle of equivalence applies to a compulsory-purchase compensation reference, reasonable costs of obtaining compensation are part of the loss attributable to the taking. The Tribunal may order indemnity-basis costs, allowing all items unless the acquiring authority shows a special reason for disallowance, such as an item being unreasonable in amount or unreasonably incurred. Where the compensation award exceeds the claimant’s offer, the costs of determining compensation are prima facie reasonable and necessary. A separate finding of unreasonable litigation conduct is unnecessary where the principle of equivalence supplies the basis for the costs order.

Harnek Singh Samra and Karnail Singh Samra sought compensation for land in Smethwick compulsorily acquired in 2014 by Sandwell Metropolitan Borough Council. The Upper Tribunal had assessed compensation at £547,039 in a decision handed down on 27 February 2026. The Council accepted that it should pay the claimants’ costs but argued for assessment on the standard basis. The claimants sought indemnity-basis costs, relying on the principle of equivalence and, alternatively, alleged unreasonable litigation conduct. The Tribunal determined on written representations whether the principle of equivalence justified indemnity costs and whether a separate finding of unreasonable conduct was needed.

1. The Council accepted liability for the claimants’ costs. The issue was whether those costs should be assessed on the standard or indemnity basis. Section 29 of the Tribunals, Courts and Enforcement Act 2007 gives the Tribunal discretion over costs, subject to Tribunal Procedure Rules. Rule 10 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 permits costs orders in compulsory-purchase compensation proceedings and allows detailed assessment on the indemnity basis where specified.

2. The Tribunal held that the principle of equivalence applied to the costs of this reference. The costs of obtaining adequate compensation formed part of the losses fairly attributable to the taking. National Roads Authority v Bodden [2016] RVR 176 was not binding, but its approach that all items should be allowed absent a special reason supplied the answer. An item unreasonable in amount or unreasonably incurred could be disallowed, with the acquiring authority bearing the burden of establishing that ground. The Tribunal found that reasoning consistent with Purfleet Farms Ltd v Secretary of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430. Where an award exceeds the claimant’s offer, the costs of determining compensation are prima facie reasonable and necessary; claimant conduct may justify disallowance if it causes an obvious and substantial escalation. No such conduct was identified here.

3. The general approach to indemnity costs described in Mann & Ors v Transport for London [2018] EWCA Civ 1520 was distinguished. Mann involved no loss of land and the principle of equivalence did not apply. The Tribunal noted that Bonnell v Carmarthenshire County Council [2014] UKUT 413 (LC) applied Bodden in a different factual setting, while Nofax Station Road Limited v The London Borough of Barnet [2025] UKUT 325 (LC) addressed costs following submissions about the acquiring authority’s conduct, rather than the principle of equivalence. Pro Investments v. Hounslow L.B.C. [2022] UKUT 54 (LC) described indemnity against reasonable compensation-claim costs as consistent with that principle.

4. Because the principle of equivalence justified indemnity-basis costs, the Tribunal did not need to decide whether the Council’s litigation conduct independently warranted that basis. The claimants’ costs were to be assessed in the Senior Courts Costs Office. The Council was ordered to pay £150,000 on account within 28 days of the accompanying order.

The Upper Tribunal assessed compensation at £547,039 on 27 February 2026. The claimants then applied for indemnity-basis costs. This decision determined the costs basis and payment on account.