Compensation for compulsory purchase: appropriate scheme for alternative development

The Upper Tribunal (Lands Chamber) has considered the appropriate level of compensation for the compulsory purchase of property in Ealing, west London, acquired for the purposes of the HS2 rail line in Secretary of State for Transport v Bleep UK plc and others [2022] UKUT 331 (LC). The case concerned Rowan House, a two-storey 1980s brick building situated at a road junction in Ealing, primarily used for offices. The freehold of the building vested in the appellant Secretary of State on 29 May 2018, the valuation date, pursuant to the High Speed Rail (London to West Midlands) Act 2017. The respondents, a consortium, owned the various freehold and leasehold interests in the property. In July 2021 the respondents obtained from the London Borough of Ealing a certificate of Appropriate Alternative Development for a mixed-use development of two blocks of nine and nineteen stories with 116 residential units and commercial space. The certificate provided for development for which planning permission could reasonably have been expected to be granted assuming a cancelled scheme but otherwise on market conditions at the valuation date. Consequently, under section 5 of the Land Compensation Act 1961, the land had to be valued for the purposes of compensation as if planning permission had been granted for that development. The Secretary of State appealed Ealing’s certificate arguing that in allowing a large residential element the certificate was inconsistent with its development plan in which the land fell within a strategic industrial location (SIL). It contended for an alternative scheme limited to a mix of industrial uses with offices with an overall height of no more than 10 storeys and provided an illustrative scheme. The respondents argued that a certificate for residential development should be issued despite the land being in a SIL and sought a certificate for a larger development of 26 storeys. Either party may appeal an AAD certificate and under section 18 of the 1961 Act the Tribunal must consider the matter as if the application had been made to it in the first place. It may confirm, vary or cancel the certificate and issue another in its place. The issues boiled down to two questions: (i) Should the certificate permit residential development on the land in a SIL? (ii) Should the certificate permit a tall building? The protection given in the development plan to SILs was strong and unequivocal and the tribunal was satisfied that there were insufficient material considerations to outweigh the clear requirement of the development plan that permission for residential development should be refused in SILs and therefore the reference land. There were a variety of types and heights of buildings around the reference land and both the 19 and 26 storey proposals would have a dominating effect. The larger scheme would, in the tribunal’s view, be incongruous. Both schemes would amount to over-development and were unattractive in terms of density, lack of outdoor space for residents and distance from public open space. The accommodation proposed would be a bleak place to live. Allowing the appeal, the tribunal adopted the appellant’s illustrative scheme and limited the development to 8-10 storeys. Louise Clark is a property law consultant and mediator