PP 2005/8

The Town and Country Planning Act 1990 gives powers of compulsory acquisition of land to local planning authorities. Where development is to be carried out on that land in accordance with planning permission, section 237 of the Act authorises that neighbouring landowners are entitled to compensation for interference with any rights or easements enjoyed by them. However, they cannot obtain an injunction preventing the development. The applicability of section 237 was considered in Midtown Ltd v City of London Real Property Co Ltd [2005] EWHC 33 (Ch); [2005] 04 EG 166 (CS). The court was asked to consider whether, if it agreed that the claimants enjoyed certain rights to light that would be infringed by development on adjoining land, the owners of the adjoining site could rely on section 237, effectively allowing them to interfere with those rights and to proceed with the development. The court held that if a local authority or their successor in title were to rely upon section 237, the proposed development would have to relate to the original planning purposes for which the land was acquired. This was not the case in Midtown, and the owners of the development site could not therefore rely upon section 237. The second point of significance related to whether the court considered that, with regard to that part of the property over which the claimants did enjoy rights to light that would be infringed by the development, it would be appropriate to grant an injunction. The first claimant, as the freehold owner, was interested in the property only from the point of view of profit, and if the value of the property were to be diminished, this could be compensated by an award of damages. The leaseholders were in a similar position. Although their rights as occupiers would be infringed, they would suffer less damage than the freeholders because they held no capital interest that could diminish in value. The proposed development would not in any way affect their existing use of the building nor any use to which they could put it in the light of any refurbishment or redevelopment. This is an interesting case. Where developers seek to rely upon section 237, it is a question of fact in each particular case as to whether the planning purposes for which the land was originally acquired will be furthered by the redevelopment or whether the development will be seen as something unconnected to it. This will require a full investigation of the purposes for which the land was originally acquired, and even if a developer could satisfy itself that the planning purpose would be furthered, a court could view the matter differently if an application for an injunction were to be made. If it is unlikely that the benefit of section 237 can be enjoyed, the next question to ask is whether an injunction, or merely damages in lieu, could be granted. The practical answer would be that the interests of potential claimants must be carefully considered and, because there are no absolute guarantees, it would be sensible to enter into negotiations at an early stage in an effort to avoid litigation. Gill Castorina is an associate at Paul, Hastings, Janofsky & Walker (Europe) LLP Related article: Law firm loses fight to stop LandSec City scheme