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HS2 Compulsory Land Acquisition – Court of Appeal Cautionary Tale

If you receive notice that your commercial property is to be compulsorily purchased to make way for a public infrastructure project, the only wise course is to take legal advice immediately. A Court of Appeal case concerning the HS2 railway project revealed the dire consequences of even inadvertent delay.

The case concerned a distribution company which was the tenant of four units on a business park that lay on the proposed HS2 route. The company was sent a notice to treat under Section 65 of the Compulsory Purchase Act 1965. The notice announced the Secretary of State for Transport's intention to compulsorily acquire one of the company's units, but not the others, and invited the company to enter into negotiations.

The letter containing the notice was addressed to the 'company secretary', although the company did not have, and was not obliged to have, an officer bearing that title. As a result, the letter was delayed in the company's post room for some time and, for a further crucial period, it lay unopened on the desk of the manager who would ordinarily deal with such matters.

The manager was away on business at the time and only opened the letter after his return to the office, some 11 days after the notice was sent. A further three weeks passed before the company served counter-notices requiring the Secretary of State to acquire all four of the units on the basis that it would suffer considerable harm if required to sell only part, rather than the whole, of its landholding.

The Act, however, required the counter-notices to be served on the Secretary of State within 28 days of the date on which the notice to treat had been served on the company. On the basis that that deadline had been missed, the Secretary of State refused to accept the counter-notices as valid.

In rejecting the company's challenge to that decision, the Upper Tribunal (UT) found that the 28-day time limit began to run when the notice to treat was delivered to the company's premises. The counter-notices had thus been served out of time and the UT found that it had no power to extend the deadline.

Challenging that outcome before the Court of Appeal, the company argued, amongst other things, that time began to run not when the notice was delivered, but on the date the manager obtained knowledge of its existence by opening the letter. The Court could, however, detect no error of law in the UT's conclusions and dismissed the appeal.

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