[2025] UKUT 312 (LC)

The LCA makes provision for the assessment of compensation for land which has been compulsorily acquired. Section 14 identifies certain assumptions which may be made regarding planning permission when the value of the land taken is determined under rule (2) in section 5. The LCA was amended with effect from 30 January 2025, but we are required to apply it in the form in force at the valuation date and the references which follow are to that form.

Section 14(2) provided that account may be taken (a) of any planning permission in force on the valuation date for development on the reference land or other land, and (b) of the prospect of planning permission being granted on or after that date for development “whether on the relevant land or other land”. Section 14(3) provided that it may also be assumed that planning permission was in force on the valuation date for any development that was “appropriate alternative development”. Section 14(4) then explained:

“(4)

For the purposes of this section, development is “appropriate alternative development” if —

(a)

it is development, on the relevant land alone or on the relevant land together with other land, other than development for which planning permission is in force at the relevant valuation date, and

(b)

on the assumptions set out in subsection (5) but otherwise in the circumstances known to the market at the relevant valuation date, planning permission for the development could at that date reasonably have been expected to be granted on an application decided —

(i)

on that date, or

(ii)

at a time after that date.”

The assumptions referred to in section 14(4)(b) and which are set out in section 14(5) were: that the scheme underlying the acquisition had been cancelled on the launch date; that no action had been taken by the acquiring authority wholly or mainly for the purposes of the scheme; and that there was no prospect of the same scheme, or any other project to meet the same or substantially the same need, being carried out in the exercise of a statutory function, or by the exercise of compulsory purchase powers. These are referred to collectively as “the cancellation assumption”. It is agreed between the parties that the “launch date” for the purpose of the cancellation assumption is 25 November 2013, that being the date on which the Government deposited a hybrid bill (which ultimately became the High Speed Rail (London-West Midlands) Act 2017 (the 2017 Act)) with Parliament seeking powers for the construction and operation of Phase 1 of HS2.

Section 14(4)(b) therefore contemplates a planning permission which on the valuation date could reasonably have been expected to have been granted for development on the land, alone or together with other land, on the stated assumptions, “but otherwise in the circumstances known to the market”. No assumptions other than those specifically identified are required to be made and the circumstances must otherwise be taken to have been as they were in reality on the relevant date. Nor is it permissible to depart from the reality principle by speculating about what would have been likely to have happened between the cancellation date and the valuation date if the scheme had indeed been cancelled (Fletcher Estates (Harlescott) Ltd v Secretary of State for the Environment [2000] 2 AC 307, at p. 324; Secretary of State for Transport v Curzon Park Ltd [2023] UKSC 30, at [62]-[64]).

Primary responsibility for determining and certifying what is appropriate alternative development lies with the local planning authority, with a right of appeal to this Tribunal. Section 17 (which has also been heavily amended since the valuation date) permits the acquiring authority or the landowner whose land has been taken to apply to the local planning authority for a CAAD. The CAAD was to identify every description of development which the planning authority considered was appropriate alternative development and provide a general indication of any conditions and obligations to which planning permission for that development could reasonably have been expected to be subject. If the local planning authority considered that there was no appropriate alternative development it was required to issue a certificate containing a statement to that effect (often referred to as a nil, or negative, certificate). Where an authority failed to issue a certificate within the time allowed by the statute, or any extension agreed with the parties, it was taken to have issued a nil certificate (section 18(3)).

Section 18(1) provides a right of appeal to the Tribunal against a local planning authority’s decision on an application under section 17. When determining such an appeal, the Tribunal must consider the matters to which the certificate relates as if the application under section 17 had been made to it in the first place (section 18(2)). Subject to the qualification in paragraph 18 below, the Tribunal stands in the shoes of the local planning authority, applying its own judgment to the issues which arise, as if it was determining an application for planning permission. In accordance with section 38(6) of the Planning and Compulsory Purchase Act 2004, the Tribunal will therefore determine the application in accordance with the statutory development plan unless material considerations indicate otherwise. While it may properly have regard to the views of the local planning authority, it will not adopt a view of the law, including an interpretation of planning policy, which it considers to be mistaken, nor will it adopt the authority’s view on matters of planning judgment if it forms a different view. None of this was contentious.

The same right of appeal under section 18 is available where the local planning authority has not issued a certificate within the time allowed and so is deemed to have issued a nil-certificate, as occurred in this appeal.