A recent ruling by the Court of Appeal has resulted in a fortunate property owner being awarded £1.6 million in compensation for the compulsory purchase of land with an agreed market valuation of only £15,000.
Rejecting an appeal by the London Borough of Wandsworth, the Court approved compensation amounting to over 100 times the market value of the property and 50 times the purchase price of £30,000. The case hinged on an interpretation of the 1961 Land Compensation Act, which was upheld by the Court.
When Wandsworth Council issued the compulsory purchase notice to Greenweb Ltd., the level of compensation was assessed, as always in such cases, by the Lands Tribunal.
As the land was being used as a park and planning permission for any other use was unlikely, the market valuation was assessed at £15,000. The reason for the Lands Tribunal’s assessment of the value of the property at £1.6 million stemmed from its former use. Prior to the Second World War, a Victorian terrace had existed on the site. The buildings were destroyed by enemy action during the War. The date of their destruction fell within the time limit to which the Act applies.
When Wandsworth wished to acquire the land for its own development plans, Greenweb benefited from provisions of the Act that require the Lands Tribunal to assess compensation as if planning permission had been granted to rebuild the previous buildings, in spite of the fact that Greenweb had not received such permission, nor would the company be likely to receive planning permission. The Court was in no doubt about the proper interpretation of the relevant parts of the Act.
Rejecting an appeal by the London Borough of Wandsworth, the Court approved compensation amounting to over 100 times the market value of the property and 50 times the purchase price of £30,000. The case hinged on an interpretation of the 1961 Land Compensation Act, which was upheld by the Court.
When Wandsworth Council issued the compulsory purchase notice to Greenweb Ltd., the level of compensation was assessed, as always in such cases, by the Lands Tribunal.
As the land was being used as a park and planning permission for any other use was unlikely, the market valuation was assessed at £15,000. The reason for the Lands Tribunal’s assessment of the value of the property at £1.6 million stemmed from its former use. Prior to the Second World War, a Victorian terrace had existed on the site. The buildings were destroyed by enemy action during the War. The date of their destruction fell within the time limit to which the Act applies.
When Wandsworth wished to acquire the land for its own development plans, Greenweb benefited from provisions of the Act that require the Lands Tribunal to assess compensation as if planning permission had been granted to rebuild the previous buildings, in spite of the fact that Greenweb had not received such permission, nor would the company be likely to receive planning permission. The Court was in no doubt about the proper interpretation of the relevant parts of the Act.
