MILLS AND ALLEN LTD v COMMISSION FOR NEW TOWNS (trading as ENGLISH PARTNERSHIPS) LCA/144/2000

UPPER TRIBUNAL

LANDS CHAMBER

LCA/144/2000

Case No LCA/144/2000

Between

MILLS AND ALLEN LTDApplicant

COMMISSION FOR NEW TOWNS (trading as ENGLISH PARTNERSHIPS)Respondent

Before

by: The President

Date 20 February 2001

Property: Advertisement Site at Southwick Road/Black Road, Sunderland

Catchwords: COMPENSATION – preliminary issue – disturbance payment – Land Compensation Act 1973 s 37 – advertisement site – claimant’s right to occupy terminating on disposal of land – land acquired by urban development corporation – hoardings removed by corporation – whether claimant displaced in consequence of acquisition – whether corporation an authority possessing compulsory purchase powers – held claimant entitled to compensation

[1]The claimant in this reference seeks a disturbance payment from the compensating authority under section 37 of the Land Compensation Act 1973. The claim relates to an advertisement site at Southwick Road/Black Road, Sunderland, Tyne and Wear, which the claimant occupied under licence from British Railways Property Board and on which it maintained advertisement hoardings. The Tyne and Wear Development Corporation acquired from BRPB the land on which the hoardings stood by agreement on 31 January

[1997]The hoardings were removed by the corporation’s contractors on 8 May 1997. The compensating authority, the Commission for New Towns (trading as English Partnerships) are the successors to the corporation, pursuant to the Urban Development Corporations in England (Transfer of Property, Rights and Liabilities) (Commission for New Towns) Order

[1998]They contend that the claimant is not entitled to a disturbance payment. Whether the claimant is so entitled is the preliminary issue to which this decision relates. With the consent of the parties it is determined without a hearing. There is an agreed statement of facts, and both parties have submitted written representations from their solicitors, Breedon Taylor of Bury for the claimants and DLA of Manchester for the compensating authority.

[2]In addition to the facts I have already stated, the following facts are also agreed. The land on which the hoardings were displayed was acquired by BRPB from the British Railways Board on rail privatisation in April 1994. The claimants, whose business includes the provision of sites and hoardings for outdoor advertising and the selling of advertising space on such sites and hoardings, were “the concessionaire” under a concession dated 15 April 1992 with BRB for a term of 7 years from 1 April 1992. The burden of the concession, insofar as it related to the subject land, became vested in BRPB. The claimants made payments due under the concession. Clause 3 of the concession granted to the concessionaire:

“3.1 … the exclusive right to manage and promote the exploitation of commercial advertising on the advertising spaces situate within upon or comprising the Structures as listed … 3.2 … the right to develop any original proposals submitted by the Concessionaire for expanding commercial advertising …”

Clause 18 of the concession, dealing with the disposal of sites, provided in part: “18.2.1 Nothing contained in this concession agreement shall restrict the right of the Board to dispose of the site on which any structure is erected. 18.2.1 Unless otherwise agreed by the Board the concessionaire will cease to have any interest or right in such site or structure upon the Board vacating the site pursuant to such disposal.” 2

[3]On 9 June 1997 the Tyne and Wear Development Corporation, as an Urban Development Corporation, made the Tyne and Wear Development Corporation (Land at Former Wearmouth Colliery, Monkwearmouth, Sunderland) Compulsory Purchase Order 1997 under section 142 of the Local Government Planning and Land Act 1980. It included the land on which the claimant’s advertising hoardings had stood until their removal by the corporation’s contractors. The CPO was confirmed by the Secretary of State for the Environment on 23 March 1998. The parties agree that the claimant did not at any time have an interest in the land for the acquisition or extinguishment of which it is entitled to compensation under any other enactment.

[4]Section 37, so far as material to the contentions of the parties, provides as follows: “(1) where a person is displaced from any land in consequence of –(a) the acquisition of the land by an authority possessing compulsory purchase powers … he shall, subject to the provisions of this section, be entitled to receive a payment (hereafter referred to as a ‘disturbance payment’) from – (i) where paragraph (a) above applies, the acquiring authority … (2) A person shall not be entitled to a disturbance payment – (a) in any case, unless he is in lawful possession of the land from which he is displaced;

(b) in a case within subsection (1)(a) above unless … (i) he has no interest in the land for the acquisition or extinguishment of which he is (or if the acquisition or extinguishment were compulsory would be ) entitled to compensation under any other enactment… (3) For the purposes of subsection (1) above a person shall not be treated as displaced in consequence of any such acquisition … as is mentioned in paragraph (a) … of that subsection unless he was in lawful possession of the land – (a) in the case of land acquired under a compulsory purchase order, at the time when notice was first published of the making of the compulsory purchase order prior to its submission for confirmation … (b) in the case of land acquired by agreement, at the time when the agreement was made … 3 (6) A disturbance payment shall carry interest, at the rate for the time being prescribed under section 32 of the Land Compensation Act 1961, from the date of displacement until payment."

[5]Section 87(1) provides that “acquiring authority” and “authority possessing compulsory purchase powers” have the same meaning as in the Land Compensation Act 1961. Section 39(1) of the 1961 Act provides that, except where the context otherwise requires:

“ ‘acquiring authority’, in relation to an interest in land, means the person or body of persons by whom the interest is, or is proposed to be, acquired; ‘authority possessing compulsory purchase powers’, where it occurs otherwise than in relation to a transaction, means any person or body of persons who could be or have been authorised to acquire an interest in land compulsorily, and, in relation to any transaction, means any person or body of persons who could be or have been so authorised for the purposes for which the transaction is or was effected…”

[6]Section 142(1) of the 1980 Act provides:

“An urban development corporation may acquire (by agreement or, on being authorised to do so by the Secretary of State, compulsorily – (a) land in the urban development areas …”

[7]For the claimant it is said that the qualifications for entitlement to a payment set out in section 37 are met. It was in lawful possession of, but had no interest in, the land on which its hoardings were erected under the concession agreement at the time when the agreement was made for the acquisition of the land from BRPB by the Development Corporation, an authority possessing compulsory purchase powers; and it was displaced from that land in consequence of the acquisition. Reference is made to Prasad v Wolverhampton Metropolitan Borough Council

[1983] Ch 333

, R v Islington London Borough Council, ex parte Knight

[1984] 1 WLR 205

, and Smith and Waverley Tailoring Co v Edinburgh District Council (No.2) [1980] RVR 23.

[8]The authority advance a number of contentions. They say that by virtue of clause 18 of the concession agreement, when BRPB disposed of their interest on 31 January 1997 the claimant ceased to be in lawful possession of the land. It was therefore not in lawful possession either when displacement took place on 8 May 1997 or at the time when notice was first published of the making of the compulsory purchase order, which was made on 9 June 1997. Furthermore, they say, the hoardings were removed on 8 May 1997, before the CPO was made, so that displacement was not due to the exercise of compulsory purchase powers. The claimant vacated the land as a consequence not of the acquisition of the land under the CPO but of the operation of clause 18. They refer to R v Islington London 4 Borough Council, ex parte Knight

[1984] 1 All ER 154

, where a claimant who had surrendered the tenancy of a dwelling house to the local authority was held not to be entitled to a disturbance payment because her interest had been extinguished and not acquired for the purposes of section 37. They argue that, for the claimant to be entitled to a payment, it was necessary that it should itself have had an interest in the land and that that interest should have been acquired. Acquisition of BRPB’s interest could not qualify the claimant for a payment. The claimant’s interest was extinguished and not acquired.

[9]The authority contend further that at the time of the displacement of the claimant the development corporation were not an “authority possessing compulsory purchase powers” within the meaning of that term in section 37. The term must, they say, be read in the context of the section as a whole. At the relevant time the development corporation did not possess compulsory purchase powers in respect of the land the subject of the claim. When, later, they made a CPO, the claimant was no longer in occupation.

[10]In my judgment the claimant satisfies the requirements of section 37. In essence the authority’s case is that the claimant fails to satisfy the requirements of section 37 in four respects. The arguments are, firstly, that the claimant had no interest that was acquired by the development corporation; secondly, that the claimant was not displaced from the land in consequence of the acquisition but because its right to occupy terminated by virtue of clause 18 when BRPB disposed of its interest to the development corporation; thirdly, that the claimant was not in lawful possession at the time of displacement ; fourthly, that at the time of displacement the development corporation was not an authority possessing compulsory purchase powers for the purposes of section 37(1) because no CPO had been made in respect of the land.

[11]The first argument in undoubtedly wrong. The purpose of the provision is to provide disturbance compensation for those who have no interest requiring to be purchased and who are therefore not otherwise entitled to compensation; see Prasad v Wolverhampton Metropolitan Borough Council

[1983] 1 Ch 333

at 353E. The fact, therefore, that the claimant had no interest that was acquired is nothing to the point.

[12]As to the second argument, the fact is that it was the acquisition of BRPB’s land by the development corporation that brought to an end the claimant’s right to occupy the land with its advertisement hoardings. It does not assist the authority’s argument that the concession agreement made express provision for the cessation of the right on BRPB’s vacating the land pursuant to a disposal of it. The disposal of the land by BRPB and the acquisition of it by the development corporation were the same transaction, and it was in consequence of this that the claimant was displaced. Nor does it seem to me to be of any significance for the purposes of entitlement to a payment under section 37 that BRPB could have terminated the claimant’s licence by disposing of the land to some other person. At the time of the agreement to acquire the claimant was in lawful possession of the land. That lawful possession was terminated by the agreement and, as a consequence, the authority was able to displace the claimant by removing the advertisement hoardings. 5

[13]The third argument is plainly misconceived. The requirement under subsection (3)(c) is not that the claimant should be in lawful possession at the time of the displacement, but that it should be in lawful possession at the time of the agreement. The claimant was in lawful possession at the time of the agreement.

[14]At to the fourth argument, it is, in my view, beyond argument that the development corporation was an authority possessing compulsory purchase powers within the definition in section 39(1) of the 1961 Act because it was a body that could have been authorised, under section 142(1) of the 1980 Act, to acquire an interest in the land. There is, in my judgment, no basis for contending, as I understand the authority to do, that the context of section 37 requires another meaning to be given to the term, that is to say, an authority that is actually authorised to acquire the land compulsorily. I say that I understand this to be their contention, although they point to the making of the CPO, rather than its confirmation, as the time at which they attained possession of compulsory purchase powers. Clearly, however, they were not authorised to acquire the land until the CPO was confirmed. Until that point they did not possess compulsory purchase powers to any greater extent than they did before the CPO was made; they were, that is to say, no more than a body that could be authorised to acquire the land. Had it been the intention that section 37(1)(a) should only apply in relation to land which the authority were authorised to acquire, the provision would have been couched in different terms. Expressed as it is, I can see no reason for not applying the definition in section 39(1) of the 1961 Act.

[15]All the elements entitling the claimant to a disturbance payment under section 37 therefore, in my judgment, exist. I can see no basis for the authority’s general contention that it would not be in accordance with the purpose of the provision that a disturbance payment should be made in this case. In particular I think that they are wrong to say that, since clause 18 enabled BRPB to terminate the concession by disposing of the land, for the claimant to receive a disturbance payment would place it in a better position than it would otherwise be in. It is to be noted that section 38 of the 1973 Act provides: “38.(1) The amount of a disturbance payment shall be equal to – (a) the reasonable expenses of the person entitled to the payment in removing from the land from which he displaced; and (b) if he was carrying on a trade or business on that land, the loss he will sustain by reason of the disturbance of the trade or business consequent upon his having to quit the land.

(2) In estimating the loss of any person for the purposes of subsection (1)(b) above, regard shall be had to the period for which the land occupied by him may reasonably have been expected to be available for the purpose of his trade or business and to the availability of other land suitable for that purpose.” 6

[16]The effect of this, clearly, is to limit a claimant’s disturbance payment to the loss that is consequential upon the acquisition of the land by the authority. If, for instance, the reasonable expectation was that, in the absence of the acquisition, the land would have been made available to the claimant for, say, 5 more years, the disturbance payment will reflect this. If, on the other hand, the reasonable expectation was that BRPB would have disposed of the land sooner than this, the payment will reflect this shorter period of prospective occupation. The claimant will not be better off than it would have been if the development corporation had not acquired the land.

[17]The preliminary issue is determined in the claimant’s favour. The claimant is entitled to a disturbance payment under section 37. The parties are now invited to made submissions on costs, and a letter relating to this accompanies this decision. The decision will take effect when, and not until, the question of costs has been determined. Dated 9 January 2001 George Bartlett QC, President 7 ADDENDUM ON COSTS

[18]The claimant applies for its costs. The compensating authority resists the application on the grounds that the determination of the preliminary issue has resulted in clarification of the issues and that the preliminary issue itself arose out of the intransigence of the claimant. I can see no justification for refusing the claimant any part of its costs of the preliminary issue, which was determined on the application of the compensating authority and on which the claimant has been wholly successful. The authority will pay the claimant’s costs of the preliminary issue. I am not able on the material before me to determine the quantum of those costs: if not agreed they must be the subject of a detailed assessment on the standard basis by the Registrar. Dated 20 February 2001 George Bartlett QC, President 8