For landowners and developers, the presence of electricity apparatus can significantly impact the value and development potential of their land. Recalling the landmark case: Arnold White Estates Ltd (AWE) v National Grid Electricity Transmission plc (NGET) can offer valuable insights into claiming compensation for overhead electricity lines.
The case at a glance
AWE owned Area 15C, a 19.5 acre site in Leighton Buzzard, earmarked for residential development. However, the land was constrained by a 400kV overhead electricity line (OHL), held under a terminable wayleave.
When promoting the site for allocation in the Bedfordshire Local Plan Review, AWE presented two development schemes:
- A plan incorporating the removal of the OHL, allowing full use of the land below it.
- An alternative scheme in which the line was retained, leaving a 54 metre undevelopable strip below it.
On 20 July 2007, shortly before planning permission was granted, AWE entered into contracts with George Wimpey South Midlands Ltd and Persimmon Homes Ltd for the sale of Area 15C.
One contract (the “pylon land contract”) was for the 54 metre strip. It was conditional on the OHL’s removal 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 on either side of the strip. This was also subject to indexation but was unconditional.
In December 2007 planning consent was granted for Area 15C. This included conditions relating to the removal or retention of the line.
However, the Secretary of State granted a Necessary Wayleave, allowing the infrastructure to remain, and rendering the conditional contract void.
The compensation battle
With land values falling between the signing of the contract and the final ruling, AWE argued that the compensation should reflect the original agreed sale price, rather than the current market value.
The Upper Tribunal (Lands Chamber) ruled in AWE’s favor, stating:
“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.”
The Court of Appeal upheld this ruling in 2014, reinforcing that compensation should reflect the true financial impact on landowners.
Key pointers for developers and landowners
- Utility constraints can drastically affect land values and this needs to be factored into development strategies.
- Compensation claims should be based on actual financial loss, rather than market fluctuations.
- TheAWE ruling strengthened the argument for compensation based on contract terms, rather than fluctuating land values.
Looking back at cases like Arnold White Estates v NGET can help landowners and developers to navigate disputes over electricity apparatus, and to receive fair compensation for development restrictions on their land.
