The Law Commission

PART 9

ABORTIVE ORDERS

9.1     Not every compulsory purchase order that is made results in compulsory acquisition of the subject land. It may be that the acquiring authority decides, on re-consideration, that it no longer wishes to pursue its initial objectives, or that it should carry them out in a different way. It may be that circumstances change such that the project as originally envisaged by the acquiring authority is no longer realistic or desirable. The effect of compulsory purchase being "aborted", whether by express action by the acquiring authority or otherwise, is the subject of this Part. 9.2     English land law has never recognised any specific right to compensation for losses caused by proposals for compulsory purchase which are withdrawn or abandoned before service of notice to treat. Those affected prior to that date have had to rely on the strictly limited statutory provisions concerning "blight", now to be found in the Town and Country Planning Act 1990.^[1] The blight provisions (enabling a landowner to require the promoter of a scheme to purchase the affected land at open market value) apply only in tightly defined circumstances and, as Government has itself recognised,^[2] contain serious anomalies. Reform of blight law under planning legislation falls outside our terms of reference. 9.3     Under compulsory purchase law an objector ordinarily has no redress where an acquiring authority makes a compulsory purchase order but then fails to submit it to the confirming authority. The intended acquisition is simply allowed to lapse leaving the affected landowner with no recompense either for resulting financial losses, such as the cost of any professional advice, or for the anxiety it will inevitably have caused. Likewise, once an order has been confirmed it may be allowed to lapse by the acquiring authority before implementation (by notice to treat or vesting declaration), without any compensation rights accruing to the landowners affected. 9.4     As we explained in the Consultative Report on Procedure,^[3] the CPPRAG Review considered 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.^[4]

9.5     Government subsequently accepted that there should be reform in two respects.^[5] First, there should be a procedure for the notification of withdrawal of CPOs to those affected, and information relating to the making, withdrawal, confirmation, cancellation or refusal to confirm a CPO should be registrable as a local land charge.^[6] Secondly, compensation should as a matter of principle be payable where the threat of compulsory purchase fails to materialise because the order is not confirmed, is withdrawn, is quashed, or is not implemented within the appropriate time limit after confirmation.^[7] 9.6     In this Part, we consider how these objectives can best be achieved, reviewing the current procedure relating to "abortive" CPOsand the liability of acquiring authorities to compensate those affected by a failure to carry through the project as formerly intended. In Part 3(8) above we deal with the issue of local land charge registration. 9.7     We are not concerned in this Report with any losses incurred prior to the date when the acquiring authority makes the CPO. While we accept that there may be circumstances where losses may be fairly attributable to the threat of compulsory purchase following, for example, the authority's resolution to make a CPO, these are in our view more appropriately addressed by the law of blight. 9.8     We recognise that implementation of our recommendations may create an overlap of remedies available to those affected by compulsory purchase proposals. The Town and Country Planning Act 1990 provides that land in respect of which a CPO has been made and submitted for confirmation, or in respect of which an order has been confirmed but no notice to treat has yet been served, may fall within the definition of "blighted land" and the statute thereby confers the right on its owner to serve notice on the authority to purchase.^[8] We accept that it would be desirable for compensation for compulsory purchase to dovetail neatly with remedies for blight, but insofar as it does not (and blight is outside the scope of our terms of reference), we would suggest that a bar on obtaining compensation twice over for the same loss should suffice at least as an interim measure.

Existing Law

9.9     Under current law, service of notice to treat is the defining moment in the process of compulsory purchase. Although the matter is not entirely free of doubt, an acquiring authority is apparently under no enforceable obligation to seek confirmation of the order once it has been made. Prior to service of notice of treat, there is no compensatory liability (excepting liability for blight) on the acquiring authority if it withdraws or abandons its CPO. This can lead to a lengthy period of profound uncertainty during which landowners and other affected persons do not know whether the authority will proceed to exercise the powers it has striven to obtain. Following service of notice to treat, however, there is much better protection for affected parties, as statute intervenes by making express provision for withdrawal of such notice and by conferring compensation rights on its recipient.

Before notice to treat

between making of order and submission to confirming authority

9.10     Section 2(2) of the Acquisition of Land Act 1981 provides that "A compulsory purchase order authorising a compulsory purchase by an authority other than a Minister shall be made by that authority and submitted to and confirmed by the confirming authority in accordance with Part II of this Act." We believe that this provision has given rise to some confusion as to whether submission is mandatory or discretionary. In particular, it has given rise to an understanding by ODPM that, once a CPO has been made, it must be submitted by the acquiring authority for confirmation. This construction is based on the mandatory words "shall be" which appear to qualify "made", "submitted to" and "confirmed". 9.11     We do not consider however that this is a correct interpretation of the provision. It is necessary to construe the sub-section as a whole, and to take account of its purpose and its context. Three separate stages of the process are contemplated: making, submission and confirmation. An acquiring authority is manifestly under no duty to make a CPO. A confirming authority is likewise under no duty to confirm an order which is submitted to it. Both making and confirmation are clearly matters within the discretion, exercisable in accordance with the powers conferred by statute, of the relevant authorities. What section 2(2) is saying is that where an acquiring authority decides to make an order, and where a confirming authority decides to confirm an order submitted to it, then the relevant authority must make, or confirm, that order in compliance with the provisions contained in Part II of the 1981 Act. 9.12     The same logic must inexorably apply to submission of the order, once made, by the acquiring authority to the confirming authority. It is up to the acquiring authority to decide whether, having made the order, it should submit it for confirmation. If it decides to submit, then it must submit in accordance with Part II of the Act. Section 2(2) dictates the procedure to be followed once the acquiring authority has made the decision to make or to submit, or the confirming authority has made the decision to confirm. That statutory procedure is mandatory. The making, submission or confirmation is not.^[9] 9.13     It is therefore open to an acquiring authority, subsequent to making a CPO, to decide not to proceed further by submitting it for confirmation. It must of course make any such decision in accordance with its public law duties and obligations, and a decision not to proceed may be susceptible to challenge by judicial review. But there is no statutory requirement that, once made, a CPO must then be submitted for confirmation. 9.14     We understand from ODPM that as a matter of practice, and in order to protect third parties, the Secretary of State adopts the approach that he or she is entitled to require submission so that the issue of withdrawal may be determined definitively. Once the order has been submitted for confirmation, and the Minister as confirming authority is therefore possessed of the unconfirmed order, the Minister must set up an inquiry or hearing if there is a valid objection.^[10] At the inquiry the authority may then choose to apply for withdrawal or offer no evidence. Having "[caused] an inquiry to be held" the Minister then has power to award costs to a successful objector.^[11] The Secretary of State takes the view that if this process were not adopted, an 'innocent' objector would have no means of recouping his wasted expenditure, albeit that an award of "costs" may result in less generous reimbursement than under a "losses or expenses" formula. 9.15     This pragmatic approach is not without difficulty. First, it may mean putting both parties to the unnecessary expense of preparing for and attending an inquiry which will almost certainly be an open and shut affair. Secondly, although an acquiring authority may have power to make (and advertise) an order, and to submit it for confirmation, there is no enforceable obligation that it should do so. 9.16     Both legislation and case law therefore fail to deal adequately with the question whether an authority may allow an order to lapse. In the context of making local plans under planning legislation, the courts have held that the consequences of abandonment and withdrawal are the same: the proposals disappear and it would be purposeless to put them through the statutory procedure (including a public inquiry).^[12] It may be that the same would apply in the context of compulsory purchase.

during submission to the confirming authority

9.17     ODPM Circular 06/2004 recently replaced Circular 02/2003.^[13] Circular 02/2003 implied that the acquiring authority may withdraw the CPO post-submission and prior to any inquiry.^[14] The latest Circular speaks, however, not of an order having been "withdrawn", but of an authority having indicated "formally that it no longer wishes to pursue the order".^[15] It is probably the case that once the order has been submitted, it then becomes a matter solely for the confirming authority, and the acquiring authority is functus officio until the order has been confirmed.^[16] In the interim, any application to withdraw would have to be made to the confirming authority, and that authority may refuse such an application. In our view, it would be sensible if the position could be clarified by legislation.

between confirmation and service of notice to treat

Lapse or abandonment

9.18     Once an order has been confirmed, the acquiring authority must give notice of that fact.^[17] An order becomes operative when its confirmation is first published.^[18] At this juncture, the acquiring authority must decide whether to implement the order by notice to treat or by vesting declaration or a combination of both. Power to serve notice to treat or make a vesting declaration must be exercised within three years of the order becoming operative.^[19] It appears that the authority may therefore allow the order to lapse before implementation, although no compensation entitlement flows.

Withdrawal

9.19     It is less clear whether an acquiring authority may unilaterally withdraw an order subsequent to its confirmation (but before service of notice to treat). There is no legislative provision for withdrawal (or compensation), and there is an argument for saying that the authority is functus officio (because to hold otherwise would be to allow the acquiring authority to negate the confirmation).

After notice to treat

9.20     Where notice to treat has been served, the Land Compensation Act 1961 confers limited powers on the acquiring authority to withdraw such a notice, and stipulates the consequences for the CPO if notice to treat is served but then allowed to lapse.

withdrawal of notice to treat

9.21     By section 31 of the 1961 Act, an acquiring authority may withdraw notice to treat which has been served on a claimant:

(1) within six weeks of delivery of a properly formulated claim for compensation by that claimant;^[20] or

(2) if no such claim is delivered, within six weeks of the determination of compensation by the Lands Tribunal (unless the authority has entered into possession of the land by virtue of the notice to treat).

9.22     Notice to treat may be withdrawn under section 31, notwithstanding the fact that the acquiring authority has entered on and taken possession of the land.^[21] In R v Northumbrian Water Ltd, ex p Able UK Ltd,^[22] Carnwath J, as he then was, held that this was so because entry under the procedure contained in section 11 of the Compulsory Purchase Act 1965 did not affect the legal or equitable ownership of the land. 9.23     By section 31(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 expense 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.

9.24     The amount of any compensation will be determined by the Lands Tribunal in the event of disagreement between the parties.^[23] The expression "any loss or expenses" is wide enough to include any type of actual loss flowing directly from receipt of the notice (for example, being unable to develop or let the land) but it does not cover damages for personal inconvenience or anxiety or time expended.^[24] 9.25     Where an acquiring authority serves notice to treat in respect of part only of land, and the landowner serves counter-notice requiring acquisition of the whole (pursuant to the procedure concerning divided land^[25]), the authority is then entitled at common law to withdraw the notice to treat.^[26] Such withdrawal, being outside section 31, does not, however, give rise to the right to compensation. 9.26     Section 31 of the 1961 Act does not apply to deemed notices to treat:

(1) Under section 54(2) of the Land Compensation Act 1973 (valid counter-notice in respect of divided agricultural land);^[27]

(2) Under section 7(1) of the Compulsory Purchase (Vesting Declarations) Act 1981 (constructive notice to treat when vesting declaration executed);^[28]

(3) Under section 139(3) of the Town and Country Planning Act 1990 (where a response notice indicating willingness to comply with a purchase notice has been served);^[29]

(4) Under section 143(1) of the Town and Country Planning Act 1990 (where the Secretary of State confirms a disputed purchase notice or it is confirmed by default);^[30]

(5) Under section 146(3) of the Town and Country Planning Act 1990 (where the Lands Tribunal declares an agricultural counter-notice valid);^[31]

(6) Under section 154(2), (5) of the Town and Country Planning Act 1990 (where an objection to a blight notice not upheld by Lands Tribunal and blight notice valid in whole or in part);^[32]

(7) Under section 156(1), (2) of the Town and Country Planning Act 1990, blight notice may be withdrawn and deemed notice to treat will be deemed to be withdrawn. That withdrawal is not made under section 31 of the 1961 Act^[33], and no compensation is payable in respect of the withdrawal;^[34]

(8) Under section 160(2) of the Town and Country Planning Act 1990 (blighted part of agricultural unit).^[35]

9.27     Where an authority withdraws notice to treat under section 31 of the 1961 Act, the CPO will itself be unaffected. Subject to the requirement that notice to treat must be served within three years of the order becoming operative, the authority may therefore serve a second, or even a third, notice to treat. In Ashton Vale Iron Co Ltd v Bristol Corporation,^[36] a case concerning the procedure for divided land, the Court of Appeal held that when a notice to treat is validly withdrawn following service of a counter-notice by the affected landowner, the acquiring authority may re-serve notice to treat any number of times provided that the time limit for service is still valid. By parity of reasoning, it is surely open to the acquiring authority to re-serve notice to treat following withdrawal under section 31. On expiry of the period of six weeks referred to in the statute, however, the acquiring authority is no longer entitled to withdraw notice to treat.

lapse or abandonment

9.28     Once the notice to treat ceases to have effect a different set of compensation provisions will apply. Section 5(2A) of the Compulsory Purchase Act 1965 provides that a notice to treat ceases to have effect three years after service, if certain action has not been taken,^[37] unless the time is extended by agreement.^[38] 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.

9.29     In default of agreement, compensation is determinable by the Lands Tribunal.^[39] Lapse in these circumstances terminates that element of the order, as section 4 of the 1965 Act precludes exercise of any further implementation power. It seems to us, on a strict interpretation of the Act, that compensation is restricted to the consequences of service and lapse of the notice to treat and does not include any costs incurred by a landowner prior to service of the notice to treat. 9.30     A notice to treat may be withdrawn pursuant to the agreement of the parties, outside the statutory procedures. It is open to the parties in such circumstances to agree payment of compensation.^[40]

After general vesting declaration

9.31     The effect of a vesting declaration is to vest title in land (except certain minor interests) in the acquiring authority, on a fixed date, without need for actual notice to treat or formal conveyance.^[41] There is no provision for an authority unilaterally withdrawing a deemed notice to treat under the vesting declaration procedure, and the Compulsory Purchase (Vesting Declarations) Act 1981 expressly provides that the statutory power of withdrawal contained in section 31 of the 1961 Act is not exercisable.^[42] Withdrawal of deemed notice to treat is however permissible where the divided land procedure has been invoked.^[43]

Deficiencies

9.32     As we have already explained, the CPPRAG Review identified deficiencies with the existing law in relation to the compensation entitlements of landowners where compulsory purchase was threatened but not ultimately implemented, and Government has accepted the case for reform.^[44] Government has accepted reform not only in this respect but also to ensure proper notification of withdrawal of compulsory purchase orders to those affected. We believe that the deficiencies can be summarised as follows. They relate essentially to the period before service of notice to treat. Section 31 of the Land Compensation Act 1961 provides a largely satisfactory compensation regime applicable where notice to treat is withdrawn by the acquiring authority. 9.33     First, the powers of acquiring authorities to withdraw compulsory purchase orders are not clearly set out in statute. Secondly, the circumstances in which an order is deemed to be withdrawn (for example by abandonment) are insufficiently clear. Thirdly, acquiring authorities are not currently required to notify those affected where an order is either withdrawn or deemed to be withdrawn. Fourthly, there should be a statutory right to compensation on actual or deemed withdrawal of a CPO.

Provisional proposals

9.34     In the Consultative Report on Procedure we set out our provisional proposals for change.^[45] 9.35     We proposed the express conferment on acquiring authorities of power to withdraw the CPO at any time before implementation (that is, before service of notice to treat or execution of a vesting declaration) in respect of the land or part of the land in the same manner, and on the same persons, as would apply to notice of making of the order. 9.36     After implementation, power to withdraw (exercisable by serving notice on those entitled to service of notice to treat or vesting declaration) should be restricted. It should apply only by agreement between the parties, under any special statutory provision permitting withdrawal, as permitted by the procedures for divided land, or pursuant to section 31 of the Land Compensation Act 1961. 9.37     Withdrawal would render the CPO "abortive", and thereby engage the right to compensation. The same consequence would flow in four specific circumstances:

(1) Where confirmation of the order is refused by the confirming authority;

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

(3) Where, after the operative date, the acquiring authority fails to implement it by notice to treat or vesting declaration within the prescribed period; and

(4) Where, following service of notice to treat, the acquiring authority fails to enter on and take possession of the land within the prescribed period.

9.38     If any of the four specific circumstances arise, rendering the order abortive, the authority should forthwith give notice of that fact (and of the correlative right to compensation) to all those entitled to individual notice of making of the order. 9.39     Each person entitled to individual notice of making of the order, and each person served with a notice which is later withdrawn, may then claim compensation from the acquiring authority for any loss or expenses occasioned by the making of the order and its becoming abortive or by the withdrawal of the notice. 9.40     No compensation should, however, be payable in two instances:

(1) Where the authority withdraws an order, having certified in the order that it was made wholly or mainly for the purpose of securing the improvement, maintenance or management of existing property;

(2) Where, following service of a blight notice under section 150 of the Town and Country Planning Act 1990, notice to treat is deemed to have been withdrawn under section 156(2) of that Act.

9.41     Finally, where notice is given that an order has become abortive, or an order or notice has been withdrawn, the acquiring authority should be required to cause the amendment of the register of local land charges.

Consultation and Recommendations for reform

Compensation liability

9.42     In our Consultative Report on Procedure we asked generally whether a right to compensation should arise in the circumstances defined in our provisional proposal.^[46] A substantial majority of consultees supported this proposal in general terms. It would be necessary, of course, for the claimant to prove, and to mitigate, their losses, but it was thought, as one consultee put it, that it would be unfair if no such compensation were available. Serious concerns were, however, expressed by two acquiring authorities as to the potential extent of liability they might incur in the event of an expansion of compensation entitlement. 9.43     The Law Society suggested that it would assist the mitigation of loss if the court had power to quash decisions to confirm CPOs in addition to the power to quash the order itself.^[47] We accept the logic of this view. We have already made a recommendation to this effect.^[48]

Who should be entitled to claim?

9.44     In our Consultative Report on Procedure we asked whether the right to compensation should be restricted to those entitled to individual notice of making of the order, or, if not, how the right should be limited or defined.^[49] There was general acceptance of the need to place some restrictions on entitlement to claim. 9.45     As we have explained in Part 2 above, Government has recently taken steps to amend section 12 of the Acquisition of Land Act 1981 so that notice of making of an order must now be served on a "qualifying person".^[50] This extends the class of persons entitled to individual service, removing the previous exclusion of those holding tenancies for a month or less. 9.46     One consultee argued that the right should be limited to those entitled to receive notice to treat, and one contended that it should be limited to those defined as "statutory objectors". The argument was also put that entitlement to claim should be assessed at the date of implementation. 9.47     We believe that it is important not to exclude any persons on a basis which may appear arbitrary, and that the class of claimants should not be unduly restricted. It does not by any means follow that because a person can establish that they fall within the defined class^[51] they will therefore be able to prove loss consequential upon the abortive order. Further, we consider that as a matter of principle parties should be able to claim for losses sustained at any time following the making of the order and that there should be no artificial limit based on the date of implementation. That is the basis of the reform we recommend.

Acquisitions for purposes of enforcement

9.48     We drew attention in our Consultative Report on Procedure to the manner in which CPOs are sometimes used by local authorities with housing and environmental health functions to assist in the enforcement of repairing or maintenance obligations owed by owners of residential property.^[52] We referred to the use made by the City of Westminster of CPOs as an integral part of their private sector housing strategy.^[53] 9.49     The specific problem we identified concerned withdrawal by such authorities of CPOs, or notices to treat, following an undertaking by the owner of property which has fallen into serious disrepair to refurbish that property.^[54] In such circumstances, where the owner has failed to comply with statutory notices to remedy, it seems objectionable to the authorities who are using compulsory purchase powers in this way that the owner should then be able to claim compensation from the authority. In effect, they would be seeking to profit from their own wrongdoing. 9.50     We asked whether consultees agreed that there should be an exception where the acquiring authority certifies that the order is made for the purpose of securing the improvement, maintenance or management of existing property, and, if so, whether the Lands Tribunal should be able to disallow the exemption where the authority has itself acted unreasonably. Responses were mixed: some concerns were expressed about the underlying principle and others about the detail of the machinery. Some consultees appeared to suggest that the use of compulsory purchase to secure compliance with repairing obligations was inappropriate, in that it is premature for an authority to make such an order if it is intended to give the owner latitude in order to comply. But there was also concern that merely agreeing with a claimant that an order should be aborted should automatically engage the right to statutory compensation. 9.51     We believe that this application of compulsory purchase should be kept within clear bounds. We consider that the concerns of principle can be met by making clear that the exemption will only operate where statutory notice has been served and has demonstrably been breached, giving rise to a court-based or other remedy. This will narrow its remit. We suggested in our provisional proposal that the mechanism for achieving exemption would be certification, in the CPO itself, of the purpose of the order. Consultees felt that that imposed an unfair burden on the claimant who then had to prove that they were not a wrongdoer. We accept this view, and our recommendation is modified accordingly. 9.52     First, we accept that if the authority is at fault, compensation should not be refused. If an order is made, but its confirmation is refused or the order or the confirmation is quashed because it is defective, the claimant should not be penalised. 9.53     Secondly, we consider it essential that the nature and extent of the breach being enforced should be clearly specified. We intend to recommend therefore that non-compliance with the following statutory notices or orders may allow acquiring authorities to invoke the exemption:

(1) Sections 189 and 190 of the Housing Act 1985 (requirement to repair dwelling etc unfit for human habitation and requirement to repair dwelling etc in state of disrepair, respectively);^[55]

(2) Section 215 of the Town and Country Planning Act 1990 (power to require proper maintenance of land);

(3) Section 48 of the Planning (Listed Buildings and Conservation Areas) Act 1990 (repairs notice prior to compulsory notice of acquisition of listed building); and

(4) Where a statutory order which has been served under sections 264 and 265 Housing Act 1985 (closure of dwelling etc unfit for human habitation and demolition of dwelling etc unfit for human habitation, respectively) has not been quashed on appeal.

This approach builds on the rubric for exclusion of loss payments under the new regime set out in the Planning and Compulsory Purchase Act 2004.^[56] It may be that in the future this list of enactments will need to be modified or extended, and it may be useful therefore if new legislation were to include a regulation-making power for this purpose.

Delay

9.54     Finally, we asked consultees whether they agreed that there should be no right to compensation arising simply out of delay in completing the purchase procedures.^[57] 9.55     Almost all the consultees responding on this issue agreed, not least because an acquiring authority has no control of timescales during the confirmation process, and it would therefore be unfair to impose liability to compensate. If unreasonable delay were to occur during the process, the appropriate remedy is likely to be by way of judicial review. 9.56     We have adjusted our earlier proposal to take on board the issues dealt with above, and to make the proposal clearer by differentiating withdrawal of orders and of notices to treat, and separating out the circumstances, mechanics and compensation consequences of withdrawal (actual and deemed). We have not made any specific recommendations concerning the effect of withdrawal of notice to treat on the continuing validity of the compulsory purchase order which the notice was intended to implement. It does, however, occur to us, although we accept it is a matter of some complexity depending on the scope and extent of the order concerned, that it would benefit transparency if acquiring authorities were entitled to withdraw the compulsory purchase order immediately following withdrawal of notice to treat.

Recommendation (26) – Abortive orders

Liability prior to making a compulsory purchase order

(1) Subject to the law relating to blight, an acquiring authority should be under no liability to pay compensation until, and save and insofar as, a compulsory purchase order has been made, and compensation should not be payable by the authority in respect of any loss or expense incurred before the date on which notice of the order being made is first published ("the first notice date").

Withdrawal of orders by the acquiring authority etc

(2) A compulsory purchase order should be capable of being withdrawn by an acquiring authority (by giving notice of withdrawal to those persons entitled to receive notice of making the order) at the following times:

(a) from the first notice date until the date on which it is submitted to the confirming authority for confirmation;

(b) from the date on which notice of its confirmation is first published until the date on which notice to treat is served or the date on which a vesting declaration is executed.

(3) An acquiring authority should be entitled to withdraw from the purchase of any subject land for a period of six weeks from the date on which a claim for compensation is made or (where no such claim is made) from the date on which compensation is determined by the Lands Tribunal.

(4) An acquiring authority should also be entitled to withdraw from the purchase of any subject land as permitted by section 8(1) of the Compulsory Purchase Act 1965, section 54(3) of the Land Compensation Act 1973, section 12 of and Schedule 1, para 4, to the Compulsory Purchase (Vesting Declarations) Act 1981, and any other statutory provision permitting withdrawal.

Deemed withdrawal of orders etc

(5) A compulsory purchase order should be treated as withdrawn:

(a) where the acquiring authority fails to submit the order to the confirming authority for confirmation within the prescribed time limit;

(b) where the confirming authority refuses to confirm the order; and

(c) where the order is quashed by the High Court.

(6) An acquiring authority should be treated as having withdrawn from the purchase of any subject land:

(a) where, after publication of the notice of confirmation, the acquiring authority fails within the prescribed time limit to serve notice to treat or to execute a vesting declaration;

(b) where a notice to treat ceases to have effect pursuant to section 5(2A) or section 5(2B) of the Compulsory Purchase Act 1965;

(c) where, after service of notice of entry, the acquiring authority fails to enter on and take possession of the land before the notice ceases to have effect.

Notice of withdrawal

(7) Where an acquiring authority withdraws a compulsory purchase order as set out in (2) above, the acquiring authority should be required to give notice of withdrawal to all qualifying persons (as defined in section 12 of the Acquisition of Land Act 1981, as amended).

...8) Where a compulsory purchase order is deemed to be withdrawn as set out in (5) above, the acquiring authority should be required to give notice of withdrawal to all qualifying persons as soon as is reasonably practicable.

(9) Notice of withdrawal should be in prescribed form and should set out the right to claim compensation.

(10) Once an order has been confirmed, notice of withdrawal may relate to the whole of the subject land or to such part as corresponds to the whole of an individual plot held by a qualifying person.

Compensation liability on withdrawal

(11) On withdrawal of an order, or on withdrawal from the purchase of any subject land, the acquiring authority should be liable to pay compensation to any qualifying person in respect of any loss or expenses caused by the making of the order or the withdrawal of the order or the withdrawal from the purchase as the case may be.

(12) The amount of any compensation should be determined (in default of agreement) by the Lands Tribunal, and assessed in accordance with the principles relating to consequential loss set out in the Compensation Code.

(13) Compensation should carry interest at the rate prescribed under section 32 of the Land Compensation Act 1961 from the date of notice of withdrawal until its payment.

Exclusions from compensation liability

(14) Where the order is withdrawn as at the time referred to in (3) above, compensation should not cover any loss or expense incurred after the time when, in the opinion of the Lands Tribunal, a proper notice of claim should have been delivered by the claimant.

(15) Compensation should not be required to be paid where a statutory notice which had been served in relation to the subject land under any of the following provisions had become operative, and had not been complied with, at the first notice date:

(a) Sections 189 and 190 of the Housing Act 1985 (requirement to repair unfit dwelling and requirement to repair dwelling in disrepair);

(b) Section 215 of the Town and Country Planning Act 1990 (power to require proper maintenance of land);

(c) Section 48 of the Planning (Listed Buildings and Conservation Areas) Act 1990 (repairs notice prior to compulsory acquisition of listed building).

(16) Compensation should not be required to be paid where a statutory order has been served in relation to the subject land under sections 264 or 265 of the Housing Act 1985 (closure and demolition of unfit dwellings) and has not been quashed on appeal.

(17) Compensation should not be required to be paid where, following service of a blight notice under section 150 of the Town and Country Planning Act 1990, notice to treat is deemed to have been withdrawn under section 156(2) of that Act.

(18) The Secretary of State should be empowered by regulations to add to or amend the list of exclusion circumstances.

Withdrawal of notices to treat

(19) Where a notice to treat has been served by an acquiring authority, that notice should be entitled to be withdrawn unilaterally (by notice of withdrawal) only in the circumstances set out in section 31(1), (2) of the Land Compensation Act 1961, or in (21) below, or by agreement with the recipient of the notice.

(20) Where a notice is withdrawn in such circumstances or by agreement, the order should remain valid (and further notices may be served) until the expiry of the period set out in section 4 of the Compulsory Purchase Act 1965.

(21) Where, in the case of land proposed to be divided, notice to treat in respect of part only of the subject land has been served by the acquiring authority, and the recipient of the notice has within the statutory time limit to be prescribed served notice of objection to severance under section 8(1) of the Compulsory Purchase Act 1965, the authority should have the right either:

(a) to withdraw the notice to treat, subject to paying compensation for any loss or expenses occasioned to the recipient by the giving and withdrawing of the notice; or

(b) to amend the notice to treat to cover the whole of the subject land (in which case compensation will be payable in the usual way for the land acquired).

(22) The provisions relating to withdrawal of notice to treat deemed to have been served under section 54(2), (3) of the Land Compensation Act 1973 (severance of agricultural land) and under section 12 of the Compulsory Purchase (Vesting Declarations) Act 1981, and Schedule 1, paragraph 4(1)(a) thereto, should continue to apply, and compensation should be payable for such withdrawal.

(23) Where notice is withdrawn under section 31(1), (2) of the Land Compensation Act 1961, the acquiring authority should be liable to pay compensation to the person to whom notice was given for any loss or expenses occasioned to him by the giving and withdrawal of the notice (in accordance with section 31(3), (4) of that Act).

(24) Such compensation should be assessed on the same basis and subject to the same rules and procedures as that applicable under (11) above.

Note 1    Section 149, Sched 13.    [Back]

Note 2    Compulsory Purchase and Compensation: delivering a fundamental change (DTLR, December 2001) App, paras 4.2-4.6. We refer to this paper elsewhere in this report as the Policy Statement.    [Back]

Note 3    Law Com CP No 169, para 8.20.    [Back]

Note 4    CPPRAG Review, para 188.    [Back]

Note 5    See Law Com CP No 169, para 8.24.    [Back]

Note 6    Policy Statement, para 3.9.    [Back]

Note 7    Policy Statement, para 4.21.    [Back]

Note 8    Town and Country Planning Act 1990, ss 149, 150 and Sched 13, para 22. The mere passing of a resolution by an authority to acquire premises by CPO, but where the order has not been made or sealed, falls outside Sched 13, para 22 because the order is not “in force” and there is no power to serve notice to treat: see Jones Son & Vernon v Sandwell MBC (1994) 68 P & CR 563 (LT).    [Back]

Note 9    See R (Hargrave) v Stroud District Council [2003] JPL 351 where the Court of Appeal, construing the Highways Act 1980, s 119(1), held that a council was under no duty to submit a public path diversion order for confirmation by the Secretary of State. Schiemann LJ stated, at 355, “If, as I think, the authority has a discretion as to whether or not to initiate the diversion process in the first place - by making the order under Highways Act 1980, section 119 - then one would expect it to have the power not to continue with the diversion process - by submitting the order - once it is furnished with reasons by the public for not doing so ... I see no policy reason why any such duty should be implied.”    [Back]

Note 10    Acquisition of Land Act 1981, s 13(2) formerly spoke of “any objection duly made”, but has been replaced by s 13A which sets out the procedure for dealing with any “remaining objection”, being a “relevant objection” which has not been withdrawn or legitimately disregarded (as substituted by the Planning and Compulsory Purchase Act 2004, s 100(6)). Remaining objections may now be determined by a written representations procedure as well as by inquiry or by hearing: see the Acquisition of Land Act 1981, ss 13A(2), (6) and 13B (as substituted). The decision to adopt the inquiry/hearing or written representations route is one for the confirming authority alone: see the Acquisition of Land Act 1981, s 13A(2), (3).    [Back]

Note 11    See the Acquisition of Land Act 1981, s 5 and the Local Government Act 1972, s 250(5).     [Back]

Note 12    See R (Persimmon Homes Ltd) v North Hertfordshire DC [2001] 1 WLR 2393, 2402 per Collins J.    [Back]

Note 13    This Circular in turn replaced DoE Circular 14/94 referred to in Law Com CP No 169, para 8.9.    [Back]

Note 14    Circular 02/2003, para 38 (timing of inquiry). This Circular was cancelled from 31 October 2004.    [Back]

Note 15    Circular 06/2004, para 43.    [Back]

Note 16    Confirmation of an order may be as submitted or with modifications: Acquisition of Land Act 1981, s 13(1), (2) (where no objection), s 13A (where objection remains), subject to s 14 (land not originally included in order).    [Back]

Note 17    Acquisition of Land Act 1981, s 15.    [Back]

Note 18    Acquisition of Land Act 1981, s 26(1).    [Back]

Note 19    Compulsory Purchase Act 1965, s 4. For consideration of reform of this provision see Part 4(1) above, at paras 4.31. 4.34 and 4.35, and Recommendation 11 (time limits).    [Back]

Note 20    The claim must comply with section 4(1)(b), 4(2) of the Land Compensation Act 1961. It must state “the exact nature of the interest in respect of which compensation is claimed, and give details of the compensation claimed, distinguishing the amounts under separate heads and showing how the amount claimed under each head is calculated.”     [Back]

Note 21    As they have a right to do under the 1965 Act, s 11 procedure (right of entry). See Law Com CP No 169, Part V, paras 5.23-5.28, for discussion of this topic.    [Back]

Note 22    (1996) 72 P&CR 95 (QBD).    [Back]

Note 23    Land Compensation Act 1961, s 31(4).    [Back]

Note 24    LCC v Montague Burton Ltd [1934] 1 KB 360, 364 per Avory J. Compensatable loss is restricted to loss and expense incurred by the claimant in consequence of service of the notice to treat and withdrawal of that notice. Expenses incurred before the notice are not recoverable.    [Back]

Note 25    See Part 7 above.    [Back]

Note 26    King v Wycombe Railway Co (1860) 29 LJ Ch 462.    [Back]

Note 27    Land Compensation Act 1973, s 54(4).    [Back]

Note 28    Compulsory Purchase (Vesting Declarations) Act 1981, s 7(3). Where deemed notice to treat is withdrawn in response to a notice of objection to severance, it operates “notwithstanding section 7(3)”: Compulsory Purchase (Vesting Declarations) Act 1981, s 12 and Sched 1, para 4.    [Back]

Note 29    Town and Country Planning Act 1990, s 139(5).    [Back]

Note 30    Town and Country Planning Act 1990, s 143(8).    [Back]

Note 31    Town and Country Planning Act 1990, s 146(6) allows for withdrawal of deemed notice to treat but not under section 31 of the Land Compensation Act 1961.    [Back]

Note 32    Town and Country Planning Act 1990, s 167.    [Back]

Note 33    Ibid.     [Back]

Note 34    Town and Country Planning Act 1990, s 156(4).    [Back]

Note 35    Town and Country Planning Act 1990, s 167.    [Back]

Note 36    [1901] 1 Ch 591 (CA).    [Back]

Note 37    As inserted in section 5 of the Compulsory Purchase Act 1965 by the Planning and Compensation Act 1991, s 67. The action to be taken comprises agreement or award or payment or payment into court of compensation, execution of a general vesting declaration, entry on and taking possession of the land, or reference of compensation to the Lands Tribunal: see further Part 4(1), para 4.7 above.    [Back]

Note 38    Compulsory Purchase Act 1965, s 5(2B). Failure to take action within the time limit may be by design or by default: the consequence will be the same.    [Back]

Note 39    Compulsory Purchase Act 1965, s 5(2D).    [Back]

Note 40    Williams v Blaenau Gwent BC (1994) 67 P&CR 393 (LT).    [Back]

Note 41    Compulsory Purchase (Vesting Declarations) Act 1981, ss 7-9, and see Part 3(7) above.    [Back]

Note 42    Compulsory Purchase (Vesting Declarations) Act 1981, s 7(3).     [Back]

Note 43    Compulsory Purchase (Vesting Declarations) Act 1981, Sched 1, para 4(1)(a),4(2) specifically disapplying section 7(3) of the same Act. In such circumstances, the withdrawal takes effect under the 1981 Act, not under section 31 of the 1961 Act, and no compensation is therefore payable pursuant to the earlier statute.    [Back]

Note 44    DTLR Policy Statement, App, paras 3.75, 3.76 and see Law Com CP No 169, paras 8.20-8.25.     [Back]

Note 45    Law Com CP No 169, paras 8.32-8.47 and Proposal 18.    [Back]

Note 46    Law Com CP No 169, Consultation issue (AA)(1).    [Back]

Note 47    Under the procedure contained in Part IV of the Acquisition of Land Act 1981.    [Back]

Note 48    See Part 2(4) above and Recommendation 3(3).    [Back]

Note 49    Law Com CP No 169, Consultation issue (AA)(2)(a).    [Back]

Note 50    See Part 2(3) above.    [Back]

Note 51    By the “defined class” of persons entitled to claim we mean those who are “qualifying persons” as defined in Acquisition of Land Act 1981, s12 (as amended). See further Recommendation 26(11) below.    [Back]

Note 52    Law Com CP No 169, paras 8.48 et seq.    [Back]

Note 53    Law Com CP No 169, para 8.50.    [Back]

Note 54    The practice whereby authorities give undertakings not to implement an order where an owner agrees to withdraw objection to its confirmation, and to carry out the works required, is recognised (although not specifically approved) by the ODPM in Circular 06/2004 at App E, para 17 (orders made under housing powers). The Bar Council has expressed to us some concern about the legality of such arrangements.    [Back]

Note 55    These provisions in the Housing Act 1985 (and ss 264, 265) are expected to be replaced in due course by a new system for enforcement of housing standards currently contained in the Housing Bill before Parliament.     [Back]

Note 56    See the Planning and Compulsory Purchase Act 2004, s 108 inserting a new section 33D into the Land Compensation Act 1973.    [Back]

Note 57    Law Com CP No 169, Consultation issue (AA)(2)(c).    [Back]