Compulsory purchase compensation: claim for injurious affection cannot reflect nine-year delay

A claim for injurious affection – to reflect the damage sustained by the landowner’s retained land by the severance of the land purchased – can only take account of matters known or anticipated at the valuation date. The Upper Tribunal (Lands Chamber) considered such a claim in Castlefield Property Ltd v National Highways Ltd [2023] UKUT 217 (LC). The case concerned the compulsory acquisition in November 2014 of land which provided sole access from the A566 to the Cheshire Lounge, a derelict public house on green belt land on the outskirts of Manchester. The claimant acquired the property in June 2017 for £1,232,500 with the benefit of the former owner’s statutory rights to compensation and having obtained planning permission for its redevelopment as a destination bar and restaurant. In March 2017 the original access was stopped up and a replacement access opened over neighbouring land which NHL was also entitled to acquire. The original access was over a short stretch of public highway. The replacement was by a significantly longer and less prominent route. NHL left the terms of any easement over the new access to be negotiated between the claimant and the neighbouring owner. However, this was not possible, and shortly prior to the hearing in May 2023 NHL agreed to acquire the land over which the new access passed. The claimant had been using the new access way but NHL conceded that it was not reasonable to expect the redevelopment to proceed until the position was certain. A claim for injurious affection under section 7 of the Land Compensation Act 1965 could not be agreed. The claimant claimed £1,109,250 based on 90% of the open market value, reflecting the delay in reaching agreement over the new access arrangements. NHL conceded £210,000, being 20% of that value. An injurious affection claim is assessed by determining the value of the retained land before severance without the scheme and deducting from it the value of the retained land after severance with the scheme. Only matters known or anticipated at the valuation date – November 2014 – can be taken into account when assessing those values. The tribunal determined the “before” value at £1.2m. Allowing 10% adjustment for the less convenient access and 20% adjustment for the uncertainty caused by the need to negotiate an easement, the “after” value was £840,000. Consequently, the injurious affection compensation payment was £360,000. Compensation for the delay was reflected in a sum for the lost return on the claimant’s investment while development was delayed. Louise Clark is a property law consultant and mediator