Transport for London (formerly London Underground Limited) v Spirerose Limited

The appeal was heard by the House of Lords and the issue was whether, in cases where land has an unrealised potential for development but the success of an application for the requisite planning permission is probable, but not a certainty, compensation for compulsory purchase should be assessed on the basis that planning permission would be granted, or whether the amount that such an assessment would produce should be discounted to reflect the lack of certainty. The House of Lords held that the assessment of compensation should take into account that lack of certainty and that, accordingly, this appeal should be allowed. The court found that the Tribunal and the Court of Appeal erred in treating a probability as a certainty and that the compensation should be assessed on the basis of hope value. The court held that the Pointe Gourde principle could not be used to establish an assumption that planning permission would be obtained. The House of Lords found that the authorities relied on by the Tribunal did not provide a basis for such a conclusion. The House of Lords also found that the Court of Appeal's approach was inconsistent with its own conclusion that a finding of probability leads not to hope value but to valuation on an assumption that planning permission would certainly have been obtained. The House of Lords held that it was not the role of the court to re-write legislation by adding additional assumptions of planning permission. The House of Lords held that for the court to depart from the normal method of valuation of land which has potential development value by adding an assumption that planning permission will be obtained by analogy with those provisions which do provide for assumptions was not a permissible exercise of statutory construction.