West Law Report

High valuation assumption

Posted in Times Law Report by mrkooenglish on September 3, 2008

From The TimesAugust 28, 2008

High valuation assumption
Court of Appeal
Published August 28, 2008
Greenweb Ltd v Wandsworth London Borough Council

Where a local authority compulsorily purchased a public open space after refusing the landowner’s application for housing development, the Lands Tribunal had to value the land on the basis that planning permission had been granted for the housing development.

The Court of Appeal (Lord Justice Buxton, Lord Justice Thomas and Lord Justice Stanley Burnton) so stated on July 31, 2008, dismissing the appeal of Wandsworth London Borough Council, from the decision of the Lands Tribunal that the compensation payable by the council to Greenweb Ltd, following the service of a compulsory purchase notice under the Land Compensation Act 1961, was £1.6 million.

That was 100 times the market value of the land but the 1961 Act compelled the tribunal to assume that planning permission had been granted for the development of houses which had been present on the land but were destroyed by enemy action during the Second World War.

LORD JUSTICE STANLEY BURTON said that sections 14 and 15 contained a number of provisions expressed in mandatory terms. Thus, section 14(1) provided that certain determinations “shall be made on the following assumptions”.

The verb “shall” meant that the making of the assumption was mandatory. The use of the word “assumption” indicated that what was to be assumed might not be factual.

The consequences of the application of the clear statutory words were not so absurd that one could see that Parliament had made a drafting mistake. Those mandatory directions must have been given by Parliament quite deliberately.

The number of anomalies created by the statutory provisions to which the appeal related should therefore be small.

Unfortunately for Wandsworth, this case concerned one of them.

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