AWE owned a 19.5 acre site to the south of Leighton Buzzard (“Area 15C”). A 400kV overhead electricity line (OHEL) extended from east to west across the centre of Area 15C. The line was subject to a terminable wayleave.
In 2004 Area 15C was included in the Bedfordshire Local Plan Review as a potential site for residential development. AWE promoted it, along with land to the north, north-east and west, and it was approved by South Bedfordshire District Council in September 2006.
AWE set out a development brief based on the OHEL being removed, which showed development along a 54 metre strip below the line, along with an alternative scheme on which the line was retained but the strip was left undeveloped.
Following the planning application, the matter was referred to a Public Inquiry.
On 20 July 2007, shortly before planning permission was granted, AWE entered into two contracts for the sale of Area 15C to George Wimpey South Midlands Ltd and Persimmon Homes Ltd.
One contract (the “pylon land contract”) was for the 54 metre strip. It was conditional on removing the OHEL and was priced at £5,361,246 plus VAT (indexed at RPI from the date of the contract till payment). The other contract was for the land to either side of it. It was also subject to indexation but was unconditional.
In December 2007 planning permission was granted for Area 15C. This included conditions based on the removal or retention of the line.
On 11 March 2008 AWE served notice on NG to terminate the wayleave.
On 15 September 2008 AWE served a notice to remove.
NG responded by applying to the Secretary of State for a Necessary Wayleave to retain the line under the provisions of the Electricity Act 1989.
In November 2009 the case was heard before an Inspector.
On 21 June 2010 the Secretary of State granted the wayleave. As a consequence, the pylon contract fell away.
In the intervening years between the owner agreeing a conditional sale price for the land and the granting of the wayleave, land values had fallen and consequently the price originally agreed for the strip of land was much higher than its development value on the open market, which had fallen to £3,195,000.
The Decision
The Upper Tribunal (Lands Chamber) ruled that the compensation should be measured in accordance with the contract price, rather than its current value, reasoning that:
“since all that was required to make the contract price payable was the removal of the line it is clear that it was the grant of the wayleave that caused the claimant to be deprived of the amount that was payable.”
And Finally..
Although National Grid appealed against the decision, on 3 March 2014 their case was unanimously dismissed by the Court of Appeal.
Arnold White Estates Ltd vs National Grid Electricity Transmission Plc [ 2013] UKUT 005 (LC)
Source: Upper Tribunal (Lands Chamber) Decision, 16 April 2013
