Co-operative Insurance Society Ltd v Hastings Borough Council

Whether local authority powers exercised within requisite three-year period — Whether service of notices under Compulsory Purchase (Vesting Declaration) Act 1981 was exercise of compulsory purchase powers — High Court holding that section 3 notices did not constitute exercise of powers — Judgment for plaintiff ownersThe Co-operative Insurance Society Ltd (“the society”) owned the lease of property close to Hastings Central Cricket and Recreational Ground. In December 1987 the council made a CPO under section 112(1)(c) of the Town and Country Planning Act 1971. The CPO authorised the purchase of the cricket ground and other property for the purpose of securing its comprehensive redevelopment. The CPO was confirmed following a public inquiry in February 1989. Under section 4 of the Compulsory Purchase Act 1965, the powers of the acquiring authority for compulsory purchase of land were not to be exercised after the expiration of three years from the date on which the CPO became operative. Notice of confirmation of the order was published on March 9, that was the date on which the CPO became operative and from which the three-year period prescribed by section 4 began to run. On the previous day the council gave notice to the persons affected, which stated that the order as confirmed became operative on the date on which the notice of confirmation of the order was first published, ie March 9. Under section 4 of the 1981 Act the acquiring authority might execute, in respect of any of the land which they were authorised to acquire by the CPO, a declaration in the prescribed form vesting land in themselves. Under section 3(1) of that Act the authority was precluded from executing the vesting declarations without having included certain particulars in the notice of confirmation or in another notice given afterwards. Therefore, enclosed with the notice was a further notice headed “Statement concerning general vesting declaration”. A question arose whether the notice given by the council to the society pursuant to section 3 of the 1981 Act was the exercise of powers of compulsory purchase conferred on the council for the purposes of section 4 of the Compulsory Purchase Act 1965. Held The service of the section 3 notices was not an exercise of compulsory purchase powers. 1. The period of three years from the publication of the CPO expired on March 9 1992. No notice to treat had then been served on the society under section 5 of the 1981 Act and no general vesting order relating to the land had been made. The question was whether the powers conferred by the CPO ceased to be exercisable as regards the interest of the society in the demised land on the expiration of the three-year period. The answer to that question depended on whether the inclusion with the notice of the CPO of a statement giving the notice required by section 3 of the 1981 Act was itself an exercise of the power conferred by the CPO within section 4 of the 1965 Act. 2. The CPO became operative when published only in the sense that the powers conferred became exercisable. A section 3 notice was not an exercise of those powers. 3. The service of the section 3 notices committed the council to nothing; it was still open to the council to exercise their powers by the service of a notice to treat if they decided to take that course. The service of the section 3 notice equally conferred no rights on the society. A notice given under section 3 was no more than a warning by an acquiring authority that it might use the provisions of the 1981 Act and proceed in a single leap to completion of purchase without the intermediate stage of quasi contract — the creation of a legal relationship under which the owner had the right to require compensation to be ascertained and agreed and paid to them (subject to the right of the acquiring authority under section 31 of the Land Compensation Act 1961 to resile from the transaction): see Westminster City Council v Queresbi [1991] 1 EGLR 256 disapproved. Derek Wood QC and Barry Denyer-Green (instructed by the solicitor to CIS Ltd) appeared for the society; Richard Phillips QC and Suzanne Ornsby (instructed by Nabarro Nathanson) appeared for the council.