The government has backed a landowner in a crucial legal case, opening the door to a substantial increase in the compensation bill it will need to pay businesses relocated to make way for the 2012 Olympics Games.
The Secretary of State for Communities and Local Government has backed building contractor Rooff’s appeal against a Newham council planning certificate in a move which effectively means the London Development Agency has been seeking to significantly underpay for Rooff’s land at Carpenter’s Estate in Stratford, east London.
The decision follows a four-year battle by Rooff to have its site valued as a potentially highly lucrative residential development opportunity close to the Olympics Park, rather than an industrial development opportunity.
A Newham council certificate had ruled that planning permission would only have been awarded on the site for B1 (business) and B2 (general industrial). The certificate was the basis for the values the London Development Agency sought to attach to the land when compulsory purchasing it to make way for the 2012 Olympic Park.
Rooff has argued over several appeals and inquiries however that because of the regeneration being brought about by the development of the 500-acre Olympic Park its land is instead suitable for a lucrative “landmark” development of mixed residential and business uses, as a key part of the regeneration of the area that is taking place in the area.
Rooff has sought a Section 17 award for residential development.
Following a four-day public inquiry in May, the Secretary of State this week backed Inspector Wendy McKay’s report which recommends the appeal be allowed and that the certificate issued by Newham be cancelled and a new “positive” certificate be awarded for a higher value mixed-use development incorporating residential and commercial.
The decision overturns a government decision made after a July 2009 public inquiry which rejected Rooff’s appeal initial appeal under the Land Compensation Act 1961.
The secretary of state then backed the inspector’s report that found that when the compulsory purchase order was launched on 16 November 2005, the only alternative development use for which planning consent would have been granted was B1 (business) and B2 (general industrial).
Rooff went to the High Court over this decision claiming the inspector’s reasoning was “unintelligible”, “inadequate” and gave rise to a “substantial doubt as to whether the inspector erred in law in many respects”.
At the High Court Rooff’s challenge was rejected by Mr Justice Blake who found that while the inspector’s report lacked the sufficient clarity, it could not be challenged as irrational, illogical or insufficiently reasoned.
In 2010 Rooff appealed claiming that the judge erred in failing to quash the decision after coming to a finding that the inspector’s reasoning was not sufficiently clear.
Rooff said the inspector’s reasoning was “elliptical”.
In April 2011, Lord Justice Carnwath backed Rooff and agreed that the argument should go back to the Secretary of State to decide whether to reconsider the entire case, potentially leading to a further enquiry.
A number of other significant landowners has been waiting to see what the outcome of the case is. It is likely that Newham will now accept that other sites coming forward in the area now should receive a Section 17 award enabling resi development, leading to a likely substantial increase in the government compensation for sites compulsory purchased to make way for the Games.
The decision was forwarded on 21 September to Eversheds acting on behalf of the Greater London Authority and Newham council.
Trowers & Hamlin advises Rooff. Savills advises Rooff on Compulsory Purchase Order matters.