The Upper Tribunal (Lands Chamber) has decided a number of preliminary issues regarding a claim for compensation brought by the owner of the Haven holiday village lying adjacent to Hopton Beach under section 10 of the Compulsory Purchase Act 1965 (the “1965 Act”) in Bourne Leisure (Hopton) Limited v Great Yarmouth Port Authority [2016] UKUT 044 (LC).
Brief Facts
The claim arose following the construction of an outer harbour by the Great Yarmouth Port Authority which the Claimant argues caused erosion leading to the partial collapse of sea defences along Hopton Beach and subsequent damage to the Claimant’s land. The compensation claim sought to recover the costs of carrying out consequent works to make good damage and repair the sea defences, losses associated with the works and diminution in value of the land as a result of the loss of the beach.
The Claimant then proceeded to carry out the works to make good the damage and repair and improve the sea defences for long term protection.
The outer harbour was built under the Great Yarmouth Order Harbour Act 1986 (as amended) (the “1986 Act”). Importantly, the compulsory purchase powers under the Act had expired a decade before the outer harbour was built and was subsequently amended by a 2005 Revision Order (the “Order”).
The Preliminary Issue
The Tribunal was asked to address several areas of preliminary issue between the parties as follows:
Was the Claimant entitled to bring a claim for compensation under section 10 of the 1965 Act where no compulsory purchase powers were used?
Whether the alleged facts gave rise to a cause of action in nuisance but for the statutory authority conferred by the 1986 Act.
Whether the losses claimed under section 10 of the 1965 Act were limited to the diminution in value of the land.
When the cause of action arose for limitation purposes.
Decision
Entitlement to Claim under Section 10 of the 1965 Act
As we know it, the ordinary application of section 10 of the 1965
Act relates to land, or an interest in land, which has been taken
for or injuriously affected by the execution of the works carried out
pursuant to compulsory purchase powers.
The Tribunal held that the use of the wording “as if this Act were
a compulsory purchase order” within the 1986 Act, along with the
interpretation that section 10 of the 1965 Act did not depend on the
exercise of compulsory purchase powers being exercised, had the
cumulative effect of applying the 1965 Act to the works carried out
by the Authority.
The Judge was mindful of the fact that any other interpretation
would have allowed the Authority to entirely avoid an obligation
to pay compensation, subsequently preventing other affected
landowners from obtaining any compensation. Further, it was held
that the expiration of the powers did not destroy the link between
them and the power to construct the works; there was no logical
reason why a claimant should only be entitled to compensation if
the outer harbour works were constructed in the five year period in
which the compulsory purchase powers applied, particularly as the
power to construct the outer harbour remained extant.
Additionally, the Order envisaged that the works would cause
erosion and damage to coastal protection structures; therefore,
damage to private land adjoining the coast was also conceivable
yet the statutory authorities made no provision for this, thereby
providing an incomplete remedy.
Moreover, despite arguments that the Order changed the effect
of the 1986 Act, it was held to be sufficient that the compulsory
purchase power was included in the same enactment as the power
to construct the outer harbour i.e. the two statutory provisions were
treated together as the special act.
Cause of Action in Nuisance?
There was no reason, in principle, why the physical damage to the
Claimant’s land would not be an actionable nuisance but for the
authority granted in the 1986 Act.
Limitation of Losses to Diminution in Value
In terms of damages, the Tribunal found no difficulty in including the
cost of remedial work within the losses which may be recoverable.
Despite the fact there was no authority, it was held to be down to
the fact that “it was so evidently correct…(they) never dispute it.”
However, this is subject to the requirement of fair and
reasonableness and the Claimant was under an obligation to
mitigate any loss. Moreover, generally the cost of remedial works
should not exceed the diminution in land value; although it was
acknowledged that other factors may affect this, such as a building’s
heritage value.
When Did the Cause of Action Arise?
The Tribunal reiterated that a claim for compensation did not arise
until there was an actionable nuisance, i.e. when the works actually
had an effect on the claimant’s land such as physical damage or
interference with enjoyment. As a result, the claim was within the
correct time limits.
Comment
This case is obviously of benefit to claimants relying on statutory
instruments as bases for compulsory purchase compensation,
especially where there is no threat of compulsory purchase when the
land acquisition and subsequent works occur, and provides a wider
scope for the availability of compensation.
Nevertheless, it is also important for authorities who should be
mindful when revising or amending statutory provisions which
provide for compulsory purchase powers that any amendments
should remove any such powers when they become redundant and
before the actual acquisition and/or injurious affection of land take
place.
We wait to see how the case progresses.
If you would like to discuss any matter relating to compulsory
purchase and/or land compensation, please contact any of the team
below.