Homes and Communities Agency v JS Bloor (Wilmslow) Ltd [2017] UKSC 12

The Supreme Court considered compensation for compulsory acquisition of grazing land within the Kingsway Business Park scheme. It restored the Upper Tribunal's £746,000 award, holding that the tribunal had correctly applied the no-scheme rule and planning assumptions under the Land Compensation Act 1961.

Facts

The appellant claimants owned 26.85 acres of grazing land (the reference land), forming part of approximately 420 acres acquired under the North West Development Agency (Kingsway Business Park, Rochdale) Compulsory Purchase Order 2002 for the Kingsway Business Park (KBP) development. The valuation date was 4 January 2006. The claimants contended the land had significant hope value for residential development, with access through an adjoining plot (the Nib) from Buckley Hill Lane. The authority contended only existing use value (£50,000) was appropriate. The land was allocated under policy EC/6 of the Rochdale UDP for KBP development, with limited residential development permitted only as part of a comprehensive business park scheme.

The Upper Tribunal awarded £746,000, finding a 50/50 chance of residential planning permission being obtained in a no-KBP world. The Court of Appeal remitted the matter, holding the tribunal had erred in its application of the section 6 disregards.

Issues

The appeal concerned the relationship between the general no-scheme rule (section 6 of the Land Compensation Act 1961 and the Pointe Gourde principle) and the specific planning assumptions (sections 14-16). Specifically:

• Whether the planning status determined under sections 14-16 was conclusively fixed for valuation purposes, precluding further consideration under the section 6 disregards.
• Whether the Upper Tribunal had erred by giving weight to planning policies supporting KBP development when assessing value in the no-scheme world.

Arguments

Appellant (claimants)

Mr Kingston QC submitted that the Court of Appeal had adopted reasoning supported by neither party and wrongly interfered with the expert tribunal’s assessment. The tribunal properly took into account the underlying planning policies and the pattern of local development when assessing the prospect of permission in the absence of the KBP scheme.

Respondent (authority)

Mr Humphries QC primarily contended that planning status, once determined under sections 14-16, was immutably fixed and could not be revisited via the section 6 disregards. Alternatively, he supported the Court of Appeal’s reasoning that the tribunal had wrongly allowed the claimant the benefit of the EC/6 allocation while treating the policy as modified to permit independent access.

Judgment

Lord Carnwath (with whom the other Justices agreed) allowed the appeal and restored the Upper Tribunal’s award.

Rejection of the authority’s principal submission

The Court rejected the submission that planning status under sections 14-16 was conclusively fixed. Section 14(3) confirms that statutory assumptions are not exclusive and work only in favour of the claimant. The right to claim for potential development value is long-established, recognised since the earliest days of compensation law, citing R v Brown (1867) and Spirerose. Authorities such as Melwood Units Pty Ltd v Main Roads Comr [1979] AC 426 and the Jelson cases demonstrate that the Pointe Gourde rule itself can result in changes to assumed planning status, and may produce more favourable results than the statutory assumptions.

Rejection of the Court of Appeal’s reasoning

The Court of Appeal had wrongly treated the disregard of the KBP scheme as extending to all policies, past and present, supporting development on the land. The Upper Tribunal was entitled to regard the underlying policies, including the development plan allocation, as potentially relevant to the prospect of development apart from the KBP scheme. Assessment of policy significance in the no-KBP universe was pre-eminently a matter for the specialist tribunal.

The tribunal’s approach

The tribunal properly distinguished between the ‘cancellation assumption’ universe (relevant to sections 14-16) and the ‘no KBP’ universe (relevant to section 6 and Pointe Gourde). It properly took account of development patterns on the ground, the long history of identification of the land for substantial development, and gave appropriate weight (and reduced weight where appropriate) to policy objections under PPG3 and policy EC/6. Lord Carnwath described the tribunal’s application of these difficult provisions as ‘exemplary’.

Implications

The decision confirms several important principles concerning compensation for compulsory acquisition:

• The statutory planning assumptions under sections 14-16 of the Land Compensation Act 1961 are not exclusive; they operate in favour of claimants but do not preclude reliance on the general no-scheme rule (Pointe Gourde) to establish prospective development value.
• The two stages — assessment of planning status and application of the section 6 disregards — must not be elided, but they operate in tandem rather than hierarchically. Planning status determined under sections 14-16 is not immutably fixed.
• Underlying planning policies and development plan allocations may remain relevant in the no-scheme world, and the weight to be given to them is a matter for the specialist tribunal.
• Appellate courts should be cautious about interfering with the expert assessments of the Upper Tribunal (Lands Chamber) on matters of valuation judgment.

The decision is significant for compulsory purchase practitioners, valuers, and acquiring authorities. It reaffirms claimants’ long-standing entitlement to claim for development hope value even where statutory planning assumptions do not directly assist them. Lord Carnwath observed that the 1961 Act in its unamended form generates considerable complexity, expressing hope that the amendments then before Parliament (in the Neighbourhood Planning Bill 2016-17) would simplify the exercise. The case stands as a leading modern authority on the interaction between the Pointe Gourde rule and statutory planning assumptions.

Verdict: Appeal allowed. The order of the Court of Appeal was set aside and the Upper Tribunal’s award of £746,000 compensation was restored.

Source: Homes and Communities Agency v JS Bloor (Wilmslow) Ltd [2017] UKSC 12