Compulsory Purchase and Surplus Land - Court of Appeal Test Case

Large infrastructure projects often require the compulsory purchase of swathes of privately-owned land by public authorities - but what happens if land so acquired turns out not to be needed after all? The Court of Appeal tackled that important issue in the context of London’s Crossrail development.

Using powers under The Crossrail Act 2008, extremely valuable land in central London had been compulsorily acquired by Crossrail Limited with a view to construction of a ticket hall. Some of the land was surplus to requirements and planning permission had been obtained for the site’s residential development.

Under the terms of the relevant land disposal policy, the company was required in certain circumstances to give former owners of the surplus land first refusal if they wished to buy back their property at market value. The former leaseholder of a flat in a block that had been compulsorily acquired and demolished had expressed an interest in exercising that right. However, he was informed by the company that the policy did not apply to him and that the site would be placed on the open market.

The policy stated that, if more than one former owner put in competing bids for a site, the land concerned would be disposed of on the open market.  In deciding that that provision applied to the instant case, Crossrail pointed out that expressions of interest had been received from two other former owners. The leaseholder had since formed a consortium with the other interested parties but his judicial review challenge to the company’s decision was nevertheless rejected by a judge.

In dismissing his appeal against that ruling, the Court found that the judge was entirely correct in his interpretation of the policy. Given the clearance of the site, none of the former owners would be stepping back into a property of remotely the same character as that which they had previously owned. If granted a right of first refusal, they would have the opportunity to acquire parcels of land that did not in any way correspond to the size and situation of their former holdings. A straightforward reading of the policy supported the company’s case that it was entitled to dispose of the entire site at the best price that could be obtained.

Pritchett v Crossrail Limited. Case Number: C1/2015/3852