Case No. UKUT-0074-(LC)

regarding legal and professional costs for a claim where, apart from the Dunsin valuation, there was no evidence that such costs have been incurred. I therefore determine that part of the disbursements issue at £6,250 – to include the Dunsin valuation fee.45. As to the claim for SDLT, the claimants’ argument was that it should be calculated at the rates prevailing when the value of the property is finally determined (in other words, the date of this decision). Recent government legislation has significantly increased SDLT rates on buy-to-let properties, and Mr Yazdiha thus urged the Tribunal to reflect the effect of the increase to 5% on the purchase price in its decision. The Council agreed to make such a payment but pointed out that section 5A, Land Compensation Act 1961 requires compensation for the value of land taken to be determined as at the vesting or valuation date. That is how the Council has calculated the claimants’ entitlement under this head of claim and I agree that the appropriate sum should be assessed as at the valuation date. However, the claimants have adduced no evidence that they have yet incurred the cost of acquiring a replacement property, and as such no liability for SDLT has so far been incurred, The Council’s offer under this head is thus effectively an award by consent. I therefore determine this part of the claim at the £3,750 offered.46. There was no support of any description produced by the claimants in respect of the claim for value of furniture left in the property other than that it remained for the use of the tenant. Mr Patel referred to s.10A of the 1961 Act which provides:“10A Expenses of owners not in occupation Where, in consequence of any compulsory acquisition of land(a) the acquiring authority acquire an interest of a person who is not then in occupation of the land; and (b) that person incurs incidental expenses in acquiring, within the period of one year, beginning with the date of entry, an interest in other land within the United KingdomThe charges or expenses shall be taken into account in assessing the compensation as they would be taken into account if he were in occupation of the land.”He said that the claimants should have ensured that their tenant had left the property by the vesting date, and in any event they had not subsequently purchased a replacement property within the UK. The provisions do not therefore apply. It was also submitted by counsel that the Council had been put to additional costs and losses in having to take steps to remove the tenant by eviction, with the assistance of bailiffs, and vacant possession was not achieved until 26 September 2016. Any such costs would be recoverable by deduction from the compensation payable to the person in occupation who failed to give possession when required to do so. The claimants were not themselves in occupation. I nevertheless disallow this head of claim because of an absence of any evidence from the claimants concerning the value of any furniture which may have belonged to them and which may have remained in the property.47. Turning to loss of rent, there had been no explanation of how the amount claimed had been calculated. However, at the hearing, Mr Yazdiha said that the rent of the flat at the valuation date was £1,190 per calendar month. The figure claimed was the loss of that income from the vesting date until the time of preparing the statement of case to this Tribunal - 22 March 2017, due to the Council’s “failure to expeditiously and with any reasonable speed, agree a figure of compensation.” This failure led to the claimants being in a position where the compensation offered (and the advance payment eventually made based upon that offer) was not sufficient to allow them to purchase an equivalent property and thus reinstate the rental income. However, as almost another year had passed by, he said that the losses should be calculated at the monthly rate up until the date the decision was issued, and the compensation figure was finally determined. The losses would, therefore, be significantly more than the £19,040 set out in the claim. It was asserted that the claim was justified on the principle of equivalence as the claimants should not be worse off due to the compulsory purchase. 48. For the Council, it was submitted that, aside from whether or not the loss of rent was a justifiable head of claim, the sum sought in the particulars of claim (which had a handwritten date of 22 March 2017 (page 136 of the claimants’ bundle)), if divided by the stated monthly rate, was equal to approximately 16 months’ rent, which would take the claim up to 8 May 2017. 49. In any event, Ms Piears said, this head of claim is actually a claim for future rent after the vesting date and it should therefore be denied for the following reasons. Firstly, the claim is too remote, and the loss of income was not caused by the compulsory acquisition (see Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 1 EGLR 19). Secondly, the claimants (and all the other affected leaseholders) were provided with a copy of the South Kilburn Regeneration Programme “Guide for Leaseholders” dated January 2013 and investor owners also had available a further booklet produced by the Department of Communities and Local Government (DCLG) entitled ‘Compulsory Purchase and Compensation – Compensation to Business Owners and Occupiers’ dated October 2004. The DCLG booklet said:“Disturbance to Investment Owners In order to be entitled to compensation for disturbance you must normally be in physical occupation of the land. There is however a limited right to disturbance for owners of investment properties who are not in occupation. Compensation is payable in respect of incidental charges or expenses incurred in acquiring, within a period of one year of date of entry, an interest in other land in the United Kingdom.” The claimants did not acquire a replacement property within the twelve-month timescale, and have not therefore taken reasonable steps to mitigate their loss (also per Shun Fung). Regarding mitigation the DCLG booklet said: “In all disturbance cases, whether on the basis of relocation or a total extinguishment, there is a duty on the claimant to ‘mitigate his loss’. This means that you must act reasonably at all times, and take all rational and reasonable steps to avoid incurring additional losses where possible. If the acquiring authority is able to show that your losses were greater than they might have been, due to unreasonable behaviour on your behalf, the compensation should be adjusted to reflect this.” If the claimants had heeded the advice that they had received from a professional valuer shortly prior to the valuation date and used it to attempt to negotiate a higher price, rather than dismissing it entirely and seeking, first before the wrong forum and then before this Tribunal, a figure that was some 37% higher (without the benefit of professional advice), then they could have been in funds to acquire a replacement property. Even though they have received 90% of the Council’s (earlier) estimate of value, Mr Yazdiha on his own evidence has still chosen not to purchase another property and therefore not to recover any rent at all. 50. Thirdly, no evidence of the rental income (such as bank statements, copy rent book entries etc) have been provided, and fourthly there is no evidence as to what attempts, if any, the claimants have made either to try to finance another purchase with the funds that they have had the benefit of since 9 December 2016, or to replicate the income generating potential in some other way.51. Fifthly, as set out in Ryde International PLC v London Regional Transport [2004] EWCA Civ 232, even if the claimants had been deprived of any profit, they have also been deprived of any corresponding risk. The value of the property as determined under rule (2) contains any value that there may be in the opportunity to obtain a rental income, and therefore cannot come within the ambit of rule (6) disturbance as it is directly related to the value of the land.52. It was submitted that despite Mr Yazdiha’s protestations about lack of response from the Council in the first half of 2016, the claimants had themselves made no contact (such as seeking an advance payment) between the vesting date and 8 June 2016. 53. As to the suggestion that the Council had the benefit of the rent on the property until the tenant was evicted, it was denied that any rent has been received from the Claimants’ former tenant, and indeed the Council has incurred the costs of gaining vacant possession which should have been provided at the valuation date.54. For all these reasons, it was submitted that the claim for loss of rent should not be allowed. 55. There is no doubt in my mind that the Council was dilatory in the extreme in progressing the matter once the property was vested in it, and it is clear from the copy email exchanges that despite regular chase ups, no meaningful progress was made between 19 January and 20 June 2016. It was not until then that Mr DaSilva confirmed receipt of the claim [Claimant’s bundle p.62]. That confirmation followed a long and detailed email that Mr Yazdiha had written to Mr Richard Barrett of the Council on 8 June expressing considerable frustration at the lack of meaningful response, and threatening to pursue a money claim through the courts. The criticism of the claimants by counsel for not making contact until June 2016 was, in my view unwarranted. The claim, duly quantified and itemised, was made on the vesting date and it was not even acknowledged until 20 June. The summary of events after that date (which were not disputed by the Council) leads me to conclude that despite much of the Council’s criticism of the Claimants being justified, it was not above criticism of its own actions. 56. Whilst these views cannot alter what I say below about the loss of rent claim, it is most certainly something I shall consider when dealing with the question of costs in the reference. 57. I accept the Council’s submissions on the loss of rent aspect of the claim. It is clearly not a justified head of claim under Rule (6) for the reasons given. I therefore dismiss this head of claim. Issue (4) The County Court claim 58. This matter can be dealt with very shortly. The claim made to Barnet Crown Court on 7 September 2016 was on the basis that due to the Council’s dilatory approach, delay and prevarication and their having failed to “expeditiously and with any reasonable speed agree compensation” it was in breach of the compulsory purchase process. That, it was alleged, was contrary to common law, and despite repeated written requests from the Claimants no payment had been made and no compensation had been agreed some eight months after the property vested in the Council.59. As I have said above, all leaseholders were provided at an early stage with two booklets which set out in clear and understandable terms what compulsory purchase means, the steps that affected owners need to take and how they should go about obtaining further advice and assistance. The Council’s Regeneration Strategy booklet is an impressive and helpful document in which the author(s) can, in my judgment, be justifiably proud. It was specifically directed to all those affected by this scheme and in addition to explaining the CPO procedure and the occupiers’ rights in explicit detail, also gave details of other sources of information. Further, Mr Yazdiha is a property investor who undoubtedly has considerable experience in the residential property market. Also, although there is no record anywhere in the papers relating to the County Court claim that the Claimants were being legally represented, it is clear that he was in touch with Perrin Myddleton both before and after service of the notice. 60. I therefore find it extremely difficult to comprehend why Mr Yazdiha chose to take that route. He was certainly advised by the Council that the County Court was the wrong forum and indeed in his response to Mr Barrett’s email of 21 June 2016 he said:“I believe I am aware of the CPO process and the rules governing the Council acquisition of the property but in any event I do appreciate the clarification…You will appreciate that I have already had one meeting with Mr Joao DaSilva and what I am trying to convey …is that this meeting took place several months ago and the Council has confirmed the vesting of the property in the Council since January 2016 and despite this and to date my elderly father-in-law and myself have still not received any form of prior offer of compensation or indication or communication from the Council. If we had had this then we could at least have received 90% of the disputed amount pending the final figure being resolved via negotiated agreement or via the Tribunal Process …” (my emphasis)61. Further, the claimants would most certainly have been told the same if they had either a compensation surveyor or a solicitor (or both) formally acting for them. The timing of service of the County Court claim also, as strenuously pointed out by the Council, coincided precisely with the point at which the claimants signed and returned the unfortunately titled ‘Receipt of Advance Payment of Compensation’ form, but it was not referred to in the claim.62. The fact that the leaseholders in all the other privately-owned flats in the block have agreed compensation provides to me further support (if indeed it were needed) for my conclusion that the claimants’ actions in taking the matter to court without any advice or professional representation was ill considered and unnecessary.63. There can be absolutely no merit in the claimants’ argument that the Tribunal should determine that the Council pay the £10,000 filing fee. That fee was not caused by the compulsory acquisition of the property, and the Claimants’ choice to incur it was not a reasonable step in mitigation of the loss they sustained. The Council, on the question of costs incurred in defending the claim, sought the sum of £2,144.10, but I have no jurisdiction to deal with those costs. Disposal64. This decision disposes of the issues before me, and I determine that the Council shall pay the balance of the compensation as follows:Value of the property at 19 January 2016 £275,000.00Basic loss payment £ 20,625.00 Disturbance SDLT £3,750 Legal & professional fees (to include Dunsin’s fee) £6,250