Planning permission cannot be assumed for the purposes of valuation under the Land Compensation Act 1961, the House of Lords has ruled.
In the compulsory purchase case of Spirerose Ltd (in administration) v Transport for London (formerly London Underground Ltd) [2009] UKHL 44 the planning authority had “resolved” to grant permission but no valid certificate had been issued and the valuation was conducted without one.
The law lords over-ruled the Court of Appeal decision that the compensation should reflect the market value based on the site with planning permission.
Lord Walker said that to transform a “probability” of planning permission into a certainty on the footing that the civil standard of proof – the balance of probabilities – had been satisfied distorted the nature of the valuation exercise required by the 1961 Act.
“The Court of Appeal had found that if planning permission would, on the balance of probabilities, be available then compensation should be assessed as if the land actually had the benefit of that consent,” says Malcolm Dowden, solicitor LexisPSL.
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