Lancaster City Council has won an appeal against a Lands Tribunal decision over Luneside East – and been awarded costs in the dispute with Thomas Newall Ltd, who have been seeking higher compensation monies for land on St. George's Quay.
The council acquired the land at Luneside East using compulsory purchase powers, in order to regenerate it. Although much of the money needed to obtain the land came from external regeneration funds, it was nevertheless public money.
In order to obtain land compulsorily, councils have to compensate the land owner for the loss of the land at an appropriate valuation to reflect its worth and expenses to compensate them for the disruption caused by the process. The calculation of these compensations has to be carried out by professional valuations, in accordance with statutory guidance.
The council provided a fair compensation sum for the land and disruption, but subsequent to receiving that amount the owners TNL Ltd sought to claim that the value of the property and the losses for disruption were much higher.
As a result, the city council has had to spend the last five years defending a case for increased compensation in the Lands Tribunal and latterly in the Court of Appeal.
"The council has a duty to ensure that public money is not wasted by paying more compensation than necessary," the Council said in a statement.
"After the Lands Tribunal cases the council succeeded in proving that the original claim (which was in excess of £6 million) was excessive and that its original valuation of around £2 million was correct.
"However, because the award was slightly over the £2 million already paid, a further significant sum of public money would have had to be paid to TNL to cover their costs. The council upon taking sound legal advice considered that it was in the public interest to pursue an appeal against the Tribunal's decision, as it believed that parts of the decision were flawed in law.
"The judgement in the Court of Appeal, issued up on the 11th July 2013, agreed that the Lands Tribunal had in several parts of its determination erred in law.
"The consequences of this decision are that the council will be able to request the Lands Tribunal to remake the costs award made against it, and in effect, reverse it, making TNL Ltd liable for the council's costs.
"In addition the Court of Appeal has ordered TNL Ltd to pay the council's legal costs in bringing the appeal.
"Although a lengthy and costly process, the redevelopment of Luneside East is now taking place and the public purse has been protected from having to pay out monies far in excess of the amounts properly agreed for the land acquisition."