Part VIII                         

Abortive orders

Existing law

Introduction

                    8.1             This Part is concerned with the circumstances in which a compulsory purchase order may be withdrawn or become abortive, at any time between the first notice date and the completion of the purchase; and the rights of those interested to compensation for loss suffered in consequence.

                    8.2             In considering the existing law, a distinction must be drawn between the positions respectively before and after service of notice to treat. English law has never recognised any right to compensation for losses caused by threatened CPO proposals which are withdrawn or abandoned before notice to treat. The position after notice to treat depends on statutory provisions which have been subject to recent amendment, and are reviewed below.

Historical Background

                    8.3             Under the 1845 Act, other than by agreement and subject to any special provision in the enabling statute,[1] there was no general power to withdraw a notice to treat, once served; the acquiring authority were bound to proceed with the purchase, or pay damages.[2] The Acquisition of Land (Assessment of Compensation) Act 1919, section 5(2) changed the position by setting out specific requirements for the notice of claim, and providing that after delivery of a notice of claim the acquiring authority had six weeks to withdraw any notice to treat served on the claimant. The acquiring authority would be liable to pay compensation to any claimant for any loss or expenses occasioned by the notice to treat having been given and withdrawn.

                    8.4             The Lands Tribunal Act 1949 established the Lands Tribunal as the normal forum for determination of compensation. Section 5 modified the provisions of the 1919 Act to deal with a case where no claim was served; in that event withdrawal of the notice to treat was allowed up to six weeks after the Tribunal’s determination, and compensation was limited to losses incurred before the time when a notice of claim should have been served. The provisions as so modified were consolidated in the 1961 Act, section 31.

                    8.5             There was still no statutory time limit for the validity of the notice to treat, nor any provision for compensation if it was not pursued without being formally withdrawn. Case law established that a notice to treat could be treated as abandoned in certain circumstances, but the consequences were not spelt out.[3]

                    8.6             This uncertainty was left unresolved by the 1965 Act. Section 5 re-enacted the relevant parts of the 1845 Act relating to notice to treat, but made no change in relation to withdrawal or abandonment. However, amendments made by the 1991 Act clarified the position, by providing for a notice to treat to lapse if unimplemented after three years, and for the payment of compensation for consequential losses.[4]

                    8.7             The modern law, accordingly, is contained in 1961 Act, section 31 (withdrawal of notice to treat), and 1965 Act, section 5(2A)-(2C) (notice ceasing to have effect).

Outline of existing law

Before notice to treat

                    8.8             At present, there is no restriction on the authority’s right to withdraw or abandon a compulsory purchase order before confirmation, or subsequent service of a notice to treat or making a vesting order; nor is there any right to compensation if it does so.

                    8.9             Equally, there is no statutory requirement on either the authority or Minister to carry out the steps necessary for confirmation of the order within any set time. The acquiring authority is advised by a Departmental Circular in these terms:

There should be no delay between the making and submission of an order and an authority should, so far as is reasonably practicable and possible, make advertise and submit a fully documented order as soon as they have resolved to make one. Failing that, they should aim to make the order at the earliest possible date following their resolution.[5]

                8.10             Once an order has been submitted to the Secretary of State for confirmation together with the required supporting documentation, the Secretary of State as confirming authority “may confirm the order either with or without modifications.”[6] There is no statutory requirement placed on the Minister to confirm or refuse the order within a set time[7].

After notice to treat

Right to withdraw

                8.11             The 1961 Act, section 31, gives the authority the right to withdraw notice to treat: (1) within 6 weeks of a properly formulated claim for compensation;[8] or (2) if no such claim is received, within 6 weeks of the determination of compensation by the Tribunal (unless the authority has entered into possession).[9] 

                8.12             The right to compensation is given by sub-section (3):

Where the acquiring authority withdraw a notice to treat under this section, the authority shall be liable to pay compensation to the person to whom it was given for any loss or expenses occasioned to him by the giving and withdrawal of the notice, but if the notice is withdrawn under subsection (2) of this section, not for any loss or expenses incurred by the claimant mentioned therein after the time when, in the opinion of the Lands Tribunal, a proper notice of claim should have been delivered by him.[10] 

                8.13             The Lands Tribunal has held that a notice to treat can be withdrawn by agreement, otherwise than under the procedures specified in sub-sections (2) and (3). It is thus open to the parties to agree to the withdrawal of a notice to treat on payment to the claimant of compensation.[11]

                8.14             Cases under the 1845 Act established that, where an authority had served notice to treat in respect of part of land held by a landowner, and the landowner has served counter-notice requiring acquisition of the whole,[12] the authority was entitled to withdraw the notice.[13] That withdrawal does not seem to give rise to a right to compensation, although expense may well have been incurred. Withdrawal of a notice to treat will not of itself affect the continuing validity of the order. Thus, following a section 8 withdrawal, so long as the time limit has not expired for service, the authority may serve fresh notice.[14]

Notice to treat ceasing to have effect

                8.15             The 1965 Act provides that a notice to treat ceases to have effect three years after service, if action has not been taken to implement it (s 5(2A)),[15] unless the time is extended by agreement (s 5(2B)). Where a notice to treat ceases to have effect, compensation for any loss is payable under section 5(2C), which provides:

Where a notice to treat ceases to have effect by virtue of (2A) or (2B) of this section, the acquiring authority-

(a)shall immediately give notice of that fact to the person on whom the notice was served and any other person who, since it was served, could have made an agreement under subsection (2B) of this section, and

(b)shall be liable to pay compensation to any person entitled to such a notice for any loss or expenses occasioned to him by the giving of the notice and its ceasing to have effect.

General vesting declaration

                8.16             The Vesting Declarations Act confers power on an acquiring authority to elect to execute a general vesting declaration, rather than proceed by service of notice to treat under the 1965 Act. This replaces the notice to treat and the conveyance with one procedure which, on a fixed date, automatically vests title in the land with the acquiring authority, except in relation to certain minor interests. There is no provision for withdrawing a deemed notice to treat under a vesting declaration; the Act expressly provides that the 1961 Act power is not exercisable.[16] However, where in the case of divided land notice of objection to severance has been served, the authority does then have the right to withdraw the deemed notice.[17]

Advance payment

                8.17             Provision for the advance payment of compensation, where possession is taken before compensation is settled, is made by section 52 of the 1973 Act. The advance payment is equal to 90% of the authority’s estimate of compensation, if no amount has been agreed.[18] Provision is made for repayment, if the authority’s estimate exceeds the compensation as finally determined or agreed (subs (5)):

(5) Where the amount, or aggregate amount, of any payment under this section made on the basis of the acquiring authority’s estimate of the compensation exceeds the compensation as finally determined or agreed, the excess shall be repaid; and if after any payment under this section has been made to any person it is discovered that he was not entitled to it, the amount of payment shall be recoverable by the acquiring authority.

                8.18             As noted above, under 1961 Act, section 31 a notice to treat may be withdrawn following the receipt of a claim, even where the authority have taken possession. However, neither the 1961 Act nor the 1973 Act makes any specific provision for repayment of any advance payment made before withdrawal of the notice to treat. It has been held, however, that there is to be inferred an obligation to repay any excess over the compensation ultimately found due:

Looking at [subsection (5)] as a whole, the obvious purpose is to contrast the position at the time of the advance payment with the position when compensation is finally determined or agreed. If at the time it is found that there is either an excess or no entitlement, then I think the right to payment arises. If this were wrong, then…the principles of restitution are broad enough to provide an appropriate remedy.[19]

Human Rights Act 1998

                8.19             Failure to complete CPO procedures within a reasonable time may be a breach of the European Convention of Human Rights (under either Article 6 or Article 1 of the First Protocol). Damages may be awarded, including non-pecuniary loss.[20]  Remedies for such breaches are now available in the English courts under the Human Rights Act 1998.[21]

Proposals for change

The CPPRAG Review

                8.20             The Review noted the current patchwork of provisions relating to the consequences flowing from abortive CPOs. It suggested that:

There is clearly a case in equity for a landowner to be compensated for any costs (other than those directly attributable to his opposition to the proposal) or other losses incurred which are directly attributable to the acquiring authority’s decision to make the compulsory purchase order, irrespective of whether the land is ultimately acquired from him or not.[22]

                8.21             The Review also recommended that such costs or losses should be claimable from:

…the later of the date when the order became operative or the date when a specific cost was incurred or loss arose.[23]

Policy Statement

                8.22             As has been seen,[24] the Policy Statement proposed to extend the categories of “statutory objectors” entitled to notice of the proposals to: [25]

… all persons who have any private interest in any of the land included in the relevant compulsory purchase order, or have (apart from the order) a right to occupy any of that land, or are entitled to any right restrictive of the use of any of that land.[26]

                8.23             It followed the recommendations of the CPPRAG Review, in proposing that there should be a right to compensation for any losses resulting from an abortive proposal to acquire, starting from the date of the first notice of the proposal:

… [T]he date on which the acquiring authority notify those directly affected of the making of the compulsory purchase order should be defined as the date from which appropriate losses can be reimbursed and as the date from which such claimants have a duty to mitigate their losses. This should apply in relation to any actual and justifiable loss or expense irrespective of whether the relevant compulsory purchase order is subsequently confirmed or implemented. However, the defined date should be regarded as a baseline and, as CPPRAG pointed out, any particular loss should only be reimbursable from the date, thereafter, on which it is first incurred.[27]

… It should apply uniformly irrespective of the reasons for not proceeding with the order and in respect of all costs reasonably incurred up to the date on which the acquiring authority notifies the claimant that the scheme has been abandoned, as well as any unavoidable costs arising beyond that date.[28]

                8.24             The Government’s legislative intent was expressed as twofold:

                                            (1)             Procedural:

to provide a notification procedure for the withdrawal of compulsory purchase orders; and

to require (within a stated period), registration as a local land charge of information relating to the making, withdrawal, confirmation, cancellation or refusal to confirm a compulsory purchase order;[29] and

                                            (2)             Compensatory:

to confirm that compensation is payable where the threat of compulsory purchase subsequently fails to materialise because the compulsory purchase order is not confirmed, is withdrawn, is quashed or is not implemented within the appropriate time limits after confirmation (Law Commission).[30]

                8.25             The ODPM in its Policy Response Document more recently indicated that the Law Commission is considering, amongst other matters, “compensation for actual losses if a scheme does not proceed.”[31]

Commonwealth comparisons

                8.26             The ODPM’s proposals are in line with reforms made in Australian law. In its 1980 Report, the Australian Law Reform Commission expressed the view that in principle, if the government decided not to proceed with an acquisition, compensation should be paid for any loss suffered. The ALRC fixed the starting date as the first formal declaration of the proposal:

To require government to underwrite losses sustained by people who buy and sell on the basis of mere expectation seems both wrong in principle (the government has not caused those losses) and impracticable (the task of causally relating loss to expectation would be great). If on the other hand, there has been a formal government proposal for the use of the land it is unreasonable that losses caused by such a proposal should be uncompensated simply because no formal acquisition step has been taken.[32] 

It recommended accordingly that, where a declaration is revoked, any person who had an interest in the land to which the declaration relates should have a right to recover as compensation:

Such amount as will justly compensate him in respect of any loss or damage suffered, or expense reasonably incurred by him as a result of the making of the declaration for the acquisition of land pursuant to that declaration.[33]

                8.27             This proposal was given effect by LAA (Cth), section 96, which applies where a “pre-acquisition declaration” [34] is revoked or ceases to have effect.[35] In such a case, where:

(b) a person who, when the declaration was in force, was an owner of an interest affected by the declaration, suffers loss as a direct, natural and reasonable consequence of the making of the declaration; and

(c) within 3 years after the declaration is revoked or ceases to have effect, the person claims compensation in accordance with section 97;[36]

the Commonwealth is liable to pay to the person as compensation such amount as will justly compensate him or her for the loss.[37]

                8.28             Similar provisions are found in recent state legislation. For example, the Lands Acquisition and Compensation Act 1986 (Victoria), (“LACA (Vic)”) provides for the cancellation of the proposal or its lapse after a specified period from the notice of intention to acquire.[38] It gives a right to compensation for pecuniary loss or expenses suffered in consequence of a notice of intention to acquire, where the authority determines not to proceed, or does not proceed within the time prescribed. Compensation is limited to losses in the period between the giving of notice to acquire and the time of the notice to proceed or of the lapsing of the notice to acquire.[39] There is a separate right to compensation for loss caused by temporary occupation by the authority.[40]

                8.29             Likewise, the Land Acquisition (Just Terms Compensation) Act 1991 (NSW), (“LA(JTC)A”), section 14(1) imposes an obligation to proceed with expedition:

As soon as practicable after the expiration of the minimum period of notice of a proposed compulsory acquisition, the authority of the State must:

(a) acquire the land by compulsory process or by agreement; or

(b) withdraw the proposed acquisition notice. [41]

 The acquisition notice is to be taken as withdrawn if the land is not acquired within the 120 days from the notice of intention to acquire, or any agreed extension. [42]

                8.30             This provides the trigger for a right to compensation:

(1) If a proposed acquisition notice is withdrawn (or taken to be withdrawn) under this Act, an owner of the land concerned is entitled to be compensated by the authority of the State who gave the notice for any financial costs or any damage actually incurred or suffered by the owner as direct consequence of the giving of the notice and its later withdrawal.

(2) Compensation is not payable under this section in respect of any change in the value of the land.[43]

The purpose of subsection (2) presumably is to exclude a claim for alleged losses due to a fall in the market during the life of the CPO proposal. It is probably unnecessary, since it seems unlikely in any event that such a loss would be regarded as a “direct consequence” of the giving of the notice and its withdrawal.[44]

                8.31             Another modern example is found in the Canadian Expropriation Act 1985, which ties the period of claim to the registration of the notice of intention, and also covers partial abandonment:

(2) Where an intention to expropriate an interest or remainder of an interest in land has been abandoned, the compensation payable by the Crown to the owner thereof is the amount of any actual loss sustained by the owner, after the time when the notice of intention was registered and before the time when the abandonment of the intention, or the intention to expropriate a more limited interest, as the case may be, was confirmed, in consequence of the registration:

(a) of the notice of intention, where the intention to expropriate the interest has been abandoned; or

(b) of the notice of intention in so far as that notice relates to the remainder of the interest, where the intention to expropriate the remainder has been abandoned.[45] 

main issues

                8.32             The main issues are:

                                            (1)          When should the entitlement begin? 

                                            (2)          Who may claim?

                                            (3)          In what circumstances does the entitlement arise? 

                                            (4)          What should be the basis of compensation? 

When should the entitlement begin?

                8.33             The Policy Statement proposes that the starting date for the right to compensation should be “the date on which the acquiring authority notify those directly affected of the making of the compulsory purchase order.” (We have referred to this as “the first notice date”.)[46] This is consistent with the approach of the Australian statutes.

Who may claim?

                8.34             As explained above, the Policy Statement proposes to extend the definition of “statutory objector” to cover all interests or rights in the land, including not simply those with interests in the land, but also those with no more than a right to occupy any of that land, or a right restrictive of the use of any of the land.

                8.35             It might seem appropriate for the right to compensation on withdrawal or abandonment of a compulsory purchase order to be extended to those who would be entitled to compensation if the order were implemented. It is the corollary of their obligation to mitigate their loss from the same date.[47] In practice, of course, those with lesser interests may find it less easy to prove any loss. For example, occupiers without compensatable interests, who under the 1973 Act have a right to compensation for business loss,[48] are unlikely in practice to be adversely affected by the mere making of the order. Nor, consistent with their obligation to act reasonably, are they likely to be able to justify running down a business before at least confirmation of the order. However, this should not affect the principle.

                8.36             Those with no more than an easement or right over the subject land may well be in a different category. Their right to compensation does not arise unless and until their interests are interfered with.[49] In those cases, since even implementation of the order does not confer a right to compensation, there seems no reason to confer a right at an earlier stage. Accordingly, we would not extend the right to compensation to such interests.

                8.37             We think a reasonable compromise, and a reasonably precise test, is to give the right to compensation to all those entitled to individual notice of the making of the order.[50] This, under the current proposals, will include all those with a direct interest or right of occupation, but not those entitled simply to an easement or restrictive covenant.

In what circumstances should the entitlement arise?

Abortive orders – definable events

                8.38             The first step is to define the circumstances in which a compulsory purchase order is to be treated as becoming “abortive”. On the basis of the earlier discussion (apart from agreement or special statutory provision), there are, in summary, seven definable events which might lead to an order being regarded as becoming abortive, following the first notice date:

                                            (1)             Where the order is formally withdrawn by the acquiring authority before confirmation;

                                            (2)             Where confirmation is refused by the Secretary of State;

                                            (3)             Where  the order is quashed by the High Court;

                                            (4)             Where, after the “operative date”,[51] the authority fails to implement it (by notice to treat or vesting declaration) within the statutory time limit;

                                            (5)             Where, following notice to treat or vesting declaration, a notice is served under the divided interests rules, and the authority exercises its right to withdraw;

                                            (6)             Where the authority exercises its right to withdraw the notice to treat within 6 weeks of a proper claim for compensation (or, in default of a proper claim, of determination);[52] and

                                            (7)             Where, following notice to treat, the authority fails to take possession within the statutory time limit.

                8.39             As has been seen, only (4) and (6) are subject to rights to compensation under the present law.[53] We propose that there should be a right to compensation on any of the events listed in (1) to (7). The authority should be under an obligation to give notice of such an event to all those who were entitled to notice of the making of the order, with details of their right to compensation.[54]

                8.40             For this purpose of drafting the new provisions, it is necessary to define the circumstances in which an order becomes abortive, by reference to specific circumstances. This in turn makes it desirable to formalise the rules as to when a compulsory purchase order, or a subsequent procedural act, can be withdrawn. We would not propose any substantive change to those rules, other than to require a formal notice of withdrawal, to be served on the same interests, and in the same way, as notice of the making of the order.

                8.41             Thus, in line with the existing law,[55] we propose that the authority be permitted to withdraw a compulsory order at any time up to implementation (by service of notice to treat or execution of vesting declaration). By contrast, a notice to treat could only be withdrawn (a) as permitted by the 1961 Act, section 31 (following notice of claim or determination), (b) by agreement, (c) under the “divided interest” provisions,[56] or (d) under any special statutory provision permitting withdrawal; (b) to (d) will also apply to a vesting declaration. We do not propose a separate provision for withdrawal of notice of entry, in view of the short time-scale now proposed.[57]

                8.42             Where a notice to treat or vesting declaration is withdrawn under these proposals, we think that this should be treated as a withdrawal of the order itself. Even if, under the short time limits now proposed, it were theoretically possible for the authority to re-start the implementation process, we see no reason why the owners should be left in any uncertainty.

Other circumstances

                8.43             Such a scheme assumes that the order is withdrawn or ceases to have effect at a defined point in time. It does not provide a remedy for cases where, before the operative date, the order is simply not pursued, or not pursued expeditiously. The Australian statutes lay down relatively tight timetables for completion of the procedures following the initial proposal; failure to comply results in lapse of the order and triggers the right to compensation.[58] This approach would be difficult to apply to the English procedure before confirmation, because the provision for objections and public inquiries, is more protracted, and less predictable. Also, to the extent that delay is caused by the confirmation procedure, it is largely out of the control of the acquiring authority (on whom liability would fall).

                8.44             There are three relevant periods:

                                            (1)             From making of the order to submission to the confirming authority This is within the control of the authority, and could be subject to a specific time limit (say two months from the first notice date). However, it is unlikely that significant loss will have occurred at this stage;

                                            (2)             From submission until confirmation This is outside the control of the acquiring authority. It is for Government to decide, as a matter of policy, whether it wants to place itself under time constraints or to put in place some form of binding default procedure. It is probably impracticable to do so, not least because each CPO differs in its nature, extent and complexity, and the weight of objection will vary from case to case, but also the time-scale within which inquiries or hearings can be established will depend on a multiplicity of factors;

                                            (3)             From confirmation to operative date This may be delayed by legal challenge, which is again outside the control of the authority.

                8.45             There could be a general statutory duty on the acquiring authority and the confirming authority to complete the procedures expeditiously. However, it is difficult to make provision for a trigger mechanism for a right to compensation, particularly for (2) and (3). We have considered whether those interested in the land should be able to apply to the Lands Tribunal, if their position is prejudiced by unreasonable delay in completing the procedure. The Tribunal could have power to require the authority to elect to acquire the interests, or to withdraw the order, thereby triggering the right to compensation for withdrawal. However, it would be difficult for the Tribunal to judge whether the delay is “unreasonable”, where, for example, that depends on the length of a public inquiry, or internal Government procedures.

                8.46             In any event, this problem is part of the wider problem of “blight”, which is being considered separately by the Government.[59] As we have already noted, in an extreme case, there may be a remedy for unreasonable delay under the Human Rights Act 1998.[60] We make no specific proposals at this stage, but invite views, and examples of difficulties experienced in practice.

What should be the basis of compensation?

                8.47             As noted above, the Policy Statement envisages that compensation should cover any loss or expense directly attributable to the proposal and its abandonment, subject to the ordinary duty of the claimant to mitigate his loss. This seems correct in principle. As has been noted, where a notice to treat lapses following the time limit under section 5 of the 1965 Act, the recipient is entitled to compensation for “any loss or expenses occasioned to him by the giving of the notice and its ceasing to have effect”. A similar form of wording could be used for loss caused by the order as a whole ceasing to have effect. We do not think it necessary to spell out the basis of compensation in any greater detail, since the circumstances may vary considerably. However, we would anticipate the right being subject to the general principles stated in the Compensation Report, including the principle of “fair compensation”, and the “duty to mitigate loss”, although this is probably implied.[61]

acquisitions for enforcement purposes

                8.48             There remains a problem drawn to our attention by local authorities with housing and environmental health functions. Compulsory purchase orders are sometimes used to assist enforcement of repairing or maintenance obligations of owners of residential property.[62] Compulsory powers are often used as a means of final resort because other statutory powers have failed.[63] The authority may indicate that the order will be withdrawn if the owner undertakes to carry out the work himself.

                8.49             This practice is supported by Government:

Some authorities have adopted a practice of offering undertakings to owners that they will not implement compulsory purchase orders if the owner improves the property and/or brings it into acceptable use within a specified period of time. Undertakings of this nature may be offered before or at the local inquiry held into the order and may be helpful in establishing that compulsory purchase will only proceed as a last resort in a case where an owner has proposals for a property but fails to carry these out.  . . . Where an authority has given an undertaking it should give the owner every reasonable assistance to carry out his proposals, in the hope that implementation of the order will not be necessary.[64]

                8.50             The City of Westminster is a case in point. There the authority use CPOs made under the Housing Act[65] as an integral part of their private sector housing strategy. Westminster’s CPO housing policy is (we are told):

                                            (1)             to give first priority to occupied properties where tenants are experiencing poor living conditions, or bad management of their homes, or both;

                                            (2)             to give second priority to long-term empty properties which are in poor condition and do not make a contribution to the overall housing stock in the authority’s district;

                                            (3)             but where an owner gives a time limited binding undertaking to refurbish a substandard property and return it to residential use, the CPO is not implemented (even if it is in its later stages).[66]

In such cases, CPOs are only implemented as a last resort. The Council is not anxious to acquire properties (and the liabilities attached to them); they prefer to find ways in which building owners will voluntarily refurbish and reuse their housing accommodation.

                8.51             Authorities who use compulsory purchase powers in this way have objected to the imposition of an obligation to pay compensation where the order is withdrawn solely because its objective will be achieved in other ways. We agree that such cases should be exempted from the proposed new right to compensation for abortive orders. We would welcome views on the precise scope of any such exemption: for example, should it apply to any order made for the purpose of improving existing property, or should it be tied to particular statutory powers (for example for enforcement of duties of landlords to keep properties in repair)? Should it be confined to cases where the order is withdrawn for reasons directly related to the achievement of the improvement (rather than say a failure for technical reasons or lapse of a time limit)?

                8.52             We propose provisionally that the exemption should not be limited to any particular statutory context, but should apply generally to the use of compulsory purchase powers to secure the improvement or proper maintenance or management of existing property. The authority should be able to certify in the order that it is made wholly or mainly for that purpose. Where such a certificate is given, and the authority thereafter decides to withdraw the order before implementation, no right to compensation will arise. The exemption will only apply where the order is withdrawn by the authority, and not where it is quashed or fails for other reasons. We invite views as to whether there should be any further protection against abuse by the authority, for example a power for the Tribunal to award compensation where it is shown that the authority has acted unreasonably. On balance we think this can be left to the ordinary control of judicial review.

dispute resolution

                8.53             As under the existing provisions, disputes in respect of compensation will be referred to the Lands Tribunal. They will be subject to the same limitation period as other statutory rights to compensation.[67]

Proposal 18 - Abortive orders

                                           (1)             An order will be treated as having become abortive in respect of the subject land or any part of it or interest in it:

                                                                   (a)              if it is withdrawn by the acquiring authority under paragraph (2) below; or

                                                                   (b)              in the circumstances set out in paragraph (3) below.

                                           (2)              Withdrawal of orders and notices:

                                                                   (a)              At any time before implementation (by service of a notice to treat or execution of a vesting order) in respect of the subject land or any part of it, the acquiring authority may formally withdraw the order in respect of the land or that part by serving notice of withdrawal in the same manner, and on the same persons, as would apply to notice of making of the order. 

                                                                   (b)              After implementation (as above), the authority may withdraw from the purchase (with the effect that the order itself becomes abortive to the extent of the interests affected) by notice served on all those entitled to service of the relevant notice to treat or vesting declaration, in the following circumstances (and no other):

                                                                                            (i)             by agreement;

                                                                                          (ii)             under any special statutory provision permitting withdrawal;

                                                                                        (iii)             as permitted by the divided interest procedures; or

                                                                                        (iv)             (in the case of a notice to treat) within 6 weeks of a proper[68] claim for compensation, or, in default of a proper claim, within 6 weeks of determination of compensation.[69]

                                           (3)             The compulsory purchase order shall also be treated as becoming abortive in the following circumstances:

                                                                   (a)              Where confirmation is refused by the Secretary of State;

                                                                   (b)              Where the order is quashed by the High Court;

                                                                   (c)              Where, after the “operative date”, the authority fails to implement it in respect of that interest or right (by notice to treat or vesting declaration) within the statutory time limit; or

                                                                   (d)              Where, following notice to treat, the authority fails to take possession within the statutory time limit.

                                           (4)             Where an order becomes abortive under the paragraph (3), the authority shall forthwith give notice of that fact and of the right to compensation under this Proposal, to all the persons entitled to be served with individual notice of making.

                                           (5)             Where an order becomes abortive under this Proposal, any person who was entitled to be served with individual[70] notice of making of the order, or any person served with a notice which is later withdrawn, may claim from the acquiring authority compensation for any loss or expenses occasioned to him by the making of the order and its becoming abortive, or by the withdrawal of the notice.

                                           (6)             There shall be no right to compensation under this proposal where:

                                                                   (a)              an order is withdrawn by the authority, if the authority certified in the order that it was made wholly or mainly for the purpose of securing the improvement, maintenance or management of existing property; or

                                                                   (b)              where, following the service of a blight notice under the 1990 Act, s 150, notice to treat is deemed to have been withdrawn under section 156(2) of that Act.[71]

                                           (7)             Where notice is given that an order has become abortive or that an order or notice has been withdrawn, the acquiring authority shall, at the same time as giving the notice, cause the register of local land charges to be amended accordingly.[72]

Consultation  issue (AA) – Abortive orders

(1) Do consultees agree that a right to compensation should arise in the circumstances defined in this proposal?

(2) In particular, do they agree:

(a) that the right to compensation should be defined by reference to those entitled to individual notice of the making of the order? If not, how should the right be limited, or defined?

(b) that there be an exception, as proposed, for cases where the authority certifies that the order is made for the purpose of securing the improvement, maintenance or management of existing property? If so, should the Tribunal be able to disallow the exemption where the authority has acted unreasonably?

(c) that there should be no right to compensation under this provision,[73] arising simply out of delay in completing the compulsory purchase procedures?  (If consultees disagree, it would be helpful to have examples of cases where such a right might have been appropriate, and an indication as to how it could be defined.)

(d) Do consultees have any other comments on the detail of this proposal?