[2025] UKUT 325 (LC)

For the authority, Ms Clutten did not dispute that the claimant has succeeded in his claim overall. She submitted, and I accept, that it was the valuation consequences of two alternative approaches that led to the vast difference in valuations, and the valuation experts agreed much in the alternative. They are free of criticism.

The claimant’s planning case, however, failed. That would not ordinarily justify a divided award but here, she submitted, the claimant’s planning witness Mr Dear failed to comply with his obligations to the Tribunal, and advanced a case that was fundamentally unsustainable.

Ms Clutten also referred to the conclusions I came to on Mr Dear’s evidence (paragraphs [45-48] of the compensation decision), and his conduct in the witness box ([48]).

She submitted that all of the above gives rise to a special reason why the usual rule should be departed from. The authority’s position is that the above reasons would justify an order of costs in its favour on the planning issues, but having regard to the overall result, an appropriate order is that each party is to bear its own costs in relation to planning evidence.

Mr Williams KC, for the claimant, disagreed, submitting that Mr Dear’s evidence was not wholly rejected, in that the claimant’s position on commercial space [59] succeeded, and that I did not accept the authority’s position on housing mix (although I note that was as a result of Mr Alston’s fair acceptance noted at [54]). The scheme which I eventually adopted, known to the parties as ‘3A’ was first suggested by Mr Dear in his second report.

Mr Williams KC referred to the Court of Appeal’s decision in Purfleet Farms Limited v Secretary of State for Transport, Local Government and the Regions [2002] ECWA Civ 1430, where Potter LJ (at [29]) said this:

“…the proper approach of the Tribunal for the costs of a successful claimant (i.e. a claimant who is awarded more than the amount of an unconditional offer by the respondent) should be that he is entitled to his costs incurred in the proceedings in the absence of some ‘special reason' to the contrary. Whether such special reason exists in any given case is a matter for the judgment of the Lands Tribunal. Plainly it may exist where wasted or unnecessary costs have been incurred for procedural reasons as a result of the conduct of the claimant (e.g. abandoned issues, unnecessary adjournments, or failure to comply with directions of the Tribunal). However, so far as the nature and substance of the case advanced by the claimant is concerned, special reasons should only be regarded as established where the Tribunal considers that an item of costs incurred or an issue raised was such that it could not on any sensible basis be regarded as part of the reasonable and necessary expenses of determining the amount of the disputed compensation. This would apply not only to a claim advanced without any statutory basis but to other examples of manifestly unreasonable conduct which may give rise to unnecessary expense in the course of the proceedings. It means, in my view, that, following the hearing of a compensation reference in the Lands Tribunal in which the claimant has been successful, a special reason for departing from the usual order for costs should only be found to exist in circumstances where the Tribunal can readily identify a situation in which the claimant's conduct of, or in relation to, the proceedings has led to an obvious and substantial escalation in the costs over and above those costs which it was reasonable for the claimant to incur in vindication of his right to compensation”.

In the present case, planning evidence was necessary to establish the assumed planning permission on which compensation would be paid. While Mr Dear’s scheme was rejected, there were also issues with the authority’s scheme such as the rear building line, the inclusion of commercial space, and the mix of units.

Both sides cited examples where they say the other’s expert failed to comply with the Tribunal’s practice directions, orders, or their obligations as experts, and submitted copies of fairly depressing correspondence to that effect. I am not persuaded they lead me anywhere having regard to the overall picture.

Whilst Mr Dear might not rush to the witness box in the future, I do not see anything in his conduct which led to an overall increase in costs, and I am mindful of the wider picture of the level of compensation awarded to the claimant in the light of the case advanced by the authority. While I placed little weight on his evidence, it did not generate wasted or unnecessary costs to any material degree.

On this issue, I make no differentiation between the exercise of my discretion for the period up to the date of the claimant’s offer, and the obligations imposed on me under s.4 for the period after the offer, under which there is no special reason for me to depart from the usual rule. The claimant shall have its costs, including its costs in respect of the planning evidence.