[2023] UKUT 217 (LC)

This reference arises out of the compulsory acquisition of a parcel of land which previously provided the sole access from the A566 to the Cheshire Lounge, a now derelict public house in the green belt adjoining junction 7 of the M56 on the southern outskirts of Manchester. The acquiring authority and respondent to the reference is National Highways which acted pursuant to the A556 (Knutsford to Bowden Improvement) Development Consent Order 2014 (‘the Order’).

The claimant, Castlefield Property Ltd, was not the owner of the Cheshire Lounge on 10 November 2014 when the respondent entered and took possession of the reference land. It acquired its interest only later, pursuant to a conditional purchase contract which it entered into with the previous owner on 10 August 2016. It was a term of that contract that the claimant would also acquire the benefit of the former owner’s remaining statutory rights to compensation.

The claimant completed its acquisition of the Cheshire Lounge on 2 June 2017, paying a price of £1,232,500 for the public house, including its car park and gardens and an adjoining field previously used for car boot sales. By that time two important events had already occurred (both in March 2017). The first was the opening of a replacement access to the Cheshire Lounge site and the stopping up of the original access over the reference land. The original access was over a short stretch of public highway. The new access is by a significantly longer and less prominent route over the land of a neighbouring owner, the Tatton Estate, which National Highways was also entitled to acquire pursuant to the Order. The second event of significance was the grant of planning permission for the redevelopment of the Cheshire Lounge site as a destination bar and restaurant. The claimant purchased the site intending to build and operate a new 262 cover restaurant as part of its successful ‘Albert’s’ brand; the grant of planning permission caused the purchase contract to become unconditional.

In 2014, before taking possession of the reference land, National Highways had informed the original owner, DT Property Investments LLP (‘DT’), that it intended to complete the acquisition of the land required for the replacement access from the Tatton Estate and to execute a deed of easement granting legal rights of way over the new access for the benefit of the owner of the Cheshire Lounge site. In the event that has not happened; in July 2015 National Highways instead entered into a confidential agreement with the Estate that it would do its best to avoid acquiring any of the Estate’s land, leaving the terms of any easement over the new access to be negotiated between the owner of the Cheshire Lounge and the Estate. We were told that the claimant was aware of this agreement before it completed its purchase of the site, but that it was reassured when it was informed that it was National Highways’ policy not to allow such negotiations to become unreasonably prolonged before it would exercise its own power to acquire the land, or the necessary rights over it, by compulsion.

National Highways initially insisted to the claimant that no further grant of rights was necessary and that it could rely on the Order as providing the only legal right of way it needed. It then left the claimant to negotiate unsuccessfully with the Tatton Estate for rights of way and other easements over the new access. Eventually, in July 2022, National Highways agreed terms with the Estate for a tripartite deed of easement conferring rights over the new access on both it and the claimant on the basis that the route would remain in the ownership of the Estate; unfortunately those terms were not agreed with the claimant which considered them unsatisfactory and no deed in the form offered by the Estate has ever been executed.

In anticipation of the hearing of this reference, negotiations took place between the parties and on 12 May 2023, two working days before the hearing was due to commence, the terms of a draft deed of easement satisfactory to the claimant were agreed between it and National Highways. National Highways also gave a written undertaking to acquire the Estate’s land over which the new access passes and to grant rights in the agreed terms to the claimant once it has vested that land in itself.

Thus, when the hearing opened on 16 May 2023, more than nine years after the reference land was taken by National Highways and almost six years after the claimant had acquired the Cheshire Lounge, the claimant still had no documented right of way over the new access. That has not meant that it has been unable to make use of the access, which has been open and available for use since 2017, but it is now accepted by National Highways that it would not have been reasonable to expect the claimant to proceed with its intended development of the site without the certainty of an executed document recording its rights and obligations over the new access. It is also accepted by the claimant that if the undertaking now offered by National Highways is recorded in an order of the Tribunal there is sufficient certainty about its rights over the access to remove that obstacle to development.