Unlawful exercise of power to carry out a compulsory purchase of land (UK, Supreme Court)

12 May 2010, London (2010) UKSC 20. R v. Wolverhampton City Council and another concerned the compulsory acquisition of a parcel of land by the Wolverhampton City Council, to make it easier for retailer Tesco to realise a development project; in return Tesco had undertaken to regenerate a derelict area called 'the Royal Hospital Site'. Tesco was competing with Sainsbury's, who was also interested in a project in the same area; Tesco's offer to regenerate a derelict site enticed the City Council to favour it through the compulsory acquisition. The Court held that it was unlawful for the Council to take into account Tesco's undertaking to regenerate a derelict area, when deciding to make the compulsory purchase.

The Town and Country Planning Act of 1990 empowers local authorities to acquire compulsorily any land in their area of authority if it thinks that the acquisition will facilitate the carrying out of development on the land, and if it thinks that the development is likely to contribute to the well-being of the overall area for which it is responsible.

Lord Collins ruled that, while it was legitimate for a local authority to take into account 'off-site' benefits of a proposed development, the benefit had to be related or connected with the development itself. There had to be a 'real rather than a fanciful' connection between the off-site benefits and the development for which the compulsory acquisition is made. In the case before the Court, there was no real connection between the development proposed by Tesco that the Council had sought to facilitate through the compulsory acquisition, and the area on the other side of town that Tesco had promised to regenerate. Although the regeneration of a derelict area was a benefit, it was not a benefit to the development for which the compulsory acquisition was made, as legal principles required. 

 Lord Walker on the other hand referred to the benefit as 'extraneous'  and compared the local authority's act of compulsory acquisition with choosing a new chief executive from a short list of apparently equally well qualified candidates by holding a closed auction for the office.

To read the judgement click here