Crowley & Anor (t/a Contraband Discount Stores) v Liverpool PSDA Ltd & Anor, Court of Appeal - Lands Tribunal, February 14, 2007,  EWLands ACQ_47_2005
|Resolution Date:||February 14, 2007|
|Issuing Organization:||Lands Tribunal|
|Actores:||Crowley & Anor (t/a Contraband Discount Stores) v Liverpool PSDA Ltd & Anor|
ACQ/47/2005 LANDS TRIBUNAL ACT 1949 COMPENSATION Compulsory purchase acquisition of retail premises in connection with major city centre regeneration project valuation method whether total extinguishment or notional relocation suitability of alternative premises value of existing lease (rule 2) disturbance (rule 6) Land Compensation Act 1961 s.5 compensation awarded £700,000 IN THE MATTER of A NOTICE OF REFERENCE BETWEEN SUSAN CROWLEY and IAN RONALD GEORGE JARVIS Claimants (Trading as CONTRABAND DISCOUNT STORES) and LIVERPOOL PSDA LIMITED and Acquiring LIVERPOOL CITY COUNCIL Authority Re: 1st and 2nd Floor Premises, 63 Hanover Street, Liverpool L1 3DY Before: P R Francis FRICS Sitting at: Liverpool Civil and Family Courts, 35 Vernon Street, Liverpool L2 2BX on 10, 12, 13 and 17 19 October 2006 Vincent Fraser QC, instructed by C M Brand, solicitor of Heswall, for the claimants David Elvin QC, Tim Mould QC and Charles Banner, instructed by Berwin Leighton Paisner, for the acquiring authority © CROWN COPYRIGHT 2007 The following cases are referred to in this decision: Director of Buildings and Lands v Shun Fung Ironworks Ltd  2 AC 111 Optical Express (Southern) Ltd v Birmingham City Council  2 EGLR 141 Halil v London Borough of Lambeth  RVR 181 The following cases were also referred to in argument: Kwik Save Stores Ltd v Stockton on Tees Borough Council LT ref ACQ/132/2002 (Unreported) Lamba Trading Ltd v City of Salford  3 EGLR 186 Waters v Welsh Development Agency  2 P & CR 29 Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands  AC 565 Bede Distributors Ltd v Newcastle upon Tyne Corporation (1973) 26 P & CR 298 DECISION Introduction
1. This is a reference to determine the compensation payable by Liverpool PSDA Ltd and Liverpool City Council ("the acquiring authority" or "the council") under the Liverpool City Council (Paradise Street Development Area, Liverpool) Compulsory Purchase Order 2003 (the CPO) to Miss Susan Crowley and Mr Ian Ronald George Jarvis (the claimants), who jointly traded as Contraband Discount Stores from 1st and 2nd floor premises at 63 Hanover Street, Liverpool L1 3DY (the subject premises).
2. Mr Vincent Fraser QC of counsel appeared for the claimants and called Miss Crowley who gave evidence of fact relating to the claimants' business and the background to the claim. He also called Mr Paul Moran MRICS, a director of Mason Owen & Partners, who gave evidence of fact relating to the compensation awarded to Kwik Save Ltd who were head lessees and former occupiers of the ground and part of the first floor of 63 Hanover Street, and Mr Malcolm William Irving BSc FRICS MCIArb, joint senior partner in Irving Rice, Chartered Surveyors and Commercial Property Consultants who gave factual evidence relating to his search, on the claimants' behalf, for suitable alternative premises. Mr David Barry Lyons FRICS, Chartered Surveyor of Southport and Mr Charles Lazarevic BSc MBA FCA MAE, partner in charge of the Dispute Analysis and Investigations Team, Moore Stephens, Chartered Accountants of London, respectively gave expert valuation and accountancy evidence.
3. Mr David Elvin QC, Mr Tim Mould QC and Mr Charles Banner of counsel appeared for the acquiring authority and called Mr Michael John Burchnall MBE BA (Hons) MCD, Assistant Executive Director for Regeneration at Liverpool City Council who gave evidence of fact relating to the scheme and planning background, and Mr Guy Sutton Butler BSc (Hons) MRICS a Development Manager at Grosvenor Ltd, the council's development partner, who gave factual evidence relating to his company's involvement in the scheme, and the steps taken to relocate parties affected by the CPO. Mr Andrew Gerald Massie BSc (Hons) MRICS IRRV MCIArb, a partner in Keppie Massie, Chartered Surveyors of Liverpool gave expert valuation evidence, and expert accountancy evidence was given by Mrs Alison Ewing FCA, a Senior Manager in the Forensic and Investigation Services Department of Grant Thornton UK LLP based in Manchester.
4. On 11 October 2006, I undertook an accompanied inspection of the site of the former premises and external inspections of three of the properties offered to the claimants for potential relocation of the Liverpool business, one of the storage units considered suitable by the council, the temporary storage premises at Wallasey occupied by the claimants following closure of 63 Hanover Street, and external and internal inspections of the premises in Birkenhead that had been a further Contraband outlet until 31 May 2006.
5. Closing submissions in writing were received by 20 November 2006. The Claim
6. Contraband Discount Stores had, prior to dispossession by the CPO, operated as a retailer of domestic products at discount prices from the subject premises and two other locations basement premises at 242-246 Grange Road, Birkenhead and an out-of-town retail unit at Market Deeping, Cambridgeshire. The claim was predicated on the basis that despite the claimants' best efforts, it had been impossible to identify suitable alternative premises from which to trade in Liverpool that at the same time provided sufficient and accessible on-site or reasonably convenient nearby storage to service both the Liverpool and Birkenhead outlets. As a result, it had eventually become necessary to totally extinguish the businesses carried on in both of those locations (Liverpool closing 20 September 2004 with entry being taken 1 October 2004 (the valuation date for the purposes of this reference), and Birkenhead closing 31 May 2006), but the Market Deeping business continues.
7. Included with the copy of the Notice of Reference lodged with this Tribunal on 30 March 2005 and served upon the council, was a notice of claim (subsequently said by Mr Lyons to have been provisional due to the time constraints set out in the Agreement For Sale) in the sum of £1,057,696.24 (at which time Birkenhead was still trading). This included a claim for the value of the Liverpool lease of £25,000 under section 5, rule (2) of the Land Compensation Act 1961 ("the 1961 Act"), the remainder being disturbance items under rule (6). A revised and increased claim was submitted on 3 January 2006, accountants having had the opportunity to clarify a number of aspects relating to disturbance. There was a further revised claim, signed on the claimants' behalf by Mr Lyons and Mr Lazarevic on 15 June 2006, incorporating a trading loss for Birkenhead for the period between October 2004 and 31 May 2006.
8. By the date of the hearing some further revisions had been made (including a reduction in the value of the leasehold interest in the subject premises to £20,000), and the claim was made on two alternative bases. Firstly, that the closure of the Birkenhead store was a direct result of the CPO, and secondly, if it were to be found by the Tribunal that that was not the case, the losses relating to Liverpool alone. The claims can be summarised thus: ITEM Combined stores £ Liverpool only £ Value of Lease (Liverpool) 20,000 20,000 Disturbance: Pre-possession losses 171,040 171,040 CPO related costs 48,403* 91,218 Value of business 1,658,856 1,118,895 Deductions (248,782) (216,115) Post possession losses 148,879** 121,597 Total, excluding leasehold interest 1,768,396 1,276,635 Total value of claim 1,788,396 1,296,635 *The parties agreed this figure on the combined store basis only if the Tribunal finds for the claimants in respect of the Birkenhead losses. ** This figure was agreed by the parties only if the Tribunal finds that all the Birkenhead post possession losses were a valid head of claim.
9. The acquiring authority based its principal case upon the assumption that the claimants could have relocated, and valued the compensation at £240,000; £120,000 relating to the value of the lease, and a like sum for disturbance, set out by Mr Massie as: Professional fees for locating and acquiring alternative premises, say £ 15,000 Removal costs £ 25,000 Fitting out/special adaptations £ 50,000 Double overheads £ 10,000 Directors/staff time £ 5,000 Temporary loss of profits £ 10,000 Publicity and advertising etc £ 5,000 Total disturbance £120,000
10. If it were found that the claimants' Liverpool business could not relocate and that part of the business had to be extinguished (it not being accepted that any of the Birkenhead losses or its reason for closure were due to the CPO), Mrs Ewing summarised the council's position as: Value of leasehold interest in 63 Hanover Street (Rule 2) £ 120,000 Other losses: Pre-possession losses £ 35,053 CPO related costs £ 48,403 Value of the business £ 356,200 Deductions £(351,568) Post possession losses £ 121,597 Total disturbance (Rule 6) £ 209,685 Total value of claim £ 329,685 Facts
11. Separate statements of agreed facts and issues remaining to be resolved were produced by the expert valuers and the accountants. From these, together with my inspections and the evidence, I find the following facts. The subject premises
12. Hanover Street was a secondary trading location lying immediately to the south east of the main city-centre shopping area, and contained a limited number of shops on each side of the street, together with bars, a meeting house and some period buildings converted to offices. No 63 was situated on the north west side of the road, approximately midway between its junction with Lord Street, and Paradise Street. It comprised a 3 storey steel and reinforced concrete framed and glazed building, constructed in about 1963, and the whole was held by Kwik Save Stores Ltd under the terms of a full repairing and insuring headlease for 99 years from 24 June 1970. They occupied the ground floor as a discount supermarket, and a part of the first floor for an office and training room. The rent was geared to 92.5% of open market rental value and was subject to review at 7 yearly intervals. The review at 24 June...
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