Secretary of State for Transport v Curzon Park Ltd & Ors [2023] UKSC 30

Four landowners whose sites were compulsorily acquired for HS2 applied for certificates of appropriate alternative development (CAADs). The Supreme Court considered whether CAAD applications or decisions relating to other land could be taken into account when determining a CAAD. The Court held such materials may provide relevant evidence but are not equivalent to planning applications.

Facts

The Secretary of State for Transport compulsorily acquired four neighbouring sites in Birmingham for Phase 1 of HS2. The sites were owned by the four respondents: Curzon Park Ltd, Quintain City Park Gate Birmingham Ltd, The Eastside Partnership Nominee Company Ltd, and Birmingham City University. Each respondent applied for a Certificate of Appropriate Alternative Development (CAAD) under section 17 of the Land Compensation Act 1961 (LCA). The Council rejected the Secretary of State’s contention that cumulative impacts of all CAAD applications should be considered together.

The Preliminary Issue

The Upper Tribunal directed determination of whether, in deciding a CAAD application, the decision-maker may take into account CAAD applications or decisions relating to other land acquired for the same underlying scheme.

Issues

The principal issues were:

• Whether the ‘cancellation assumption’ in section 14(5) LCA precluded taking account of CAAD applications or decisions relating to other land
• Whether CAAD applications are distinct from planning applications and whether a CAAD decision is distinct from a grant of planning permission
• Whether evidential material in CAAD applications may be considered
• The circumstances in which CAAD applications or decisions relating to other land may be relevant

Judgment

The Cancellation Argument

The Supreme Court rejected the respondents’ ‘cancellation argument’ which had been accepted by the Court of Appeal. Lords Sales and Hamblen stated:

The question to be addressed under section 14(4) is whether at the valuation date planning permission could reasonably have been expected to be granted. That question is to be determined making the assumptions required in subsection (5) but otherwise in the circumstances known to the market at the relevant valuation date. In answering that question no restriction is placed on the evidence which can or cannot be used other than that it must be circumstances known to the market.

The Court held that section 14(5) requires only the specific assumptions stated therein, and no further consequential assumptions.

CAAD Applications Distinguished from Planning Applications

The Court confirmed that a CAAD application is not equivalent to an application for planning permission, and a CAAD decision is not equivalent to a grant of planning permission:

The CAAD regime exists only as a mechanism to assist with the assessment of the value of the land in issue in the counterfactual cancelled scheme world for the purpose of determining the amount of compensation which is payable in respect of it.

Evidential Value of CAAD Applications

The Court held that material submitted in support of a CAAD application may be referred to insofar as it reveals relevant circumstances known to the market at the valuation date. CAAD applications may provide some evidence showing how market actors would likely respond to known market circumstances.

Implications

This judgment clarifies the proper approach to determining CAADs where multiple neighbouring sites are compulsorily acquired for the same scheme. It establishes that:

• The cancellation assumption does not require disregarding all real-world evidence arising from the scheme
• CAAD applications and decisions cannot be treated as equivalent to planning applications or permissions
• Evidential material in CAAD applications may be considered where relevant to circumstances known to the market
• The assessment must be conducted on a ‘broad brush’ basis by reference to objective circumstances known to the market

The decision restores the Upper Tribunal’s declaration and provides important guidance on compulsory purchase compensation valuation methodology.

Verdict: Appeal allowed to a limited extent. The declaration made by the Upper Tribunal was restored, holding that in determining appropriate alternative development, the decision-maker is not required to assume CAAD applications or decisions arising from the same scheme had never been made, must treat them as what they are (not as notional planning applications), and may give them such evidential weight as appropriate.

Source: Secretary of State for Transport v Curzon Park Ltd & Ors [2023] UKSC 30