Zumred Quadir Khan v Stockton-on-Tees Borough Council
Decision date: 21 December 2017
Neutral citation: [2017] UKUT 432 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal determined compensation for compulsory acquisition of a dilapidated two-storey house (13 Tarring Street) with valuation date 5 Dec 2014. The tribunal accepted a market value in reasonable condition of £50,000 but, after deducting realistic refurbishment/residual allowances, fixed the property's value at the valuation date at £15,000, dismissed a speculative loss-of-rent claim, and awarded boarding-up costs of £288. The statutory basic loss payment of 7.5% was held to apply to the market value of the acquired interest (here £1,125), and parties later agreed recoverable costs of £1,845 to be paid by the acquiring authority.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The statutory basic loss payment of 7.5% is to be calculated by reference to the market value of the acquired interest (its value "for the purpose of deciding the amount of compensation") and not by reference to other claim items such as professional fees, boarding costs or disturbance. In valuing modest, dilapidated properties a short residual (market-based) approach should reflect what an average purchaser would pay, and contractor-style refurbishment quotes that exceed likely purchaser investment may be inappropriate.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment indicates that evidence of transactions from much earlier market peaks (e.g. 2007–2008) may have limited weight where significant market fluctuation occurred before the valuation date, and that without-prejudice discussions remain privileged and should not be given weight absent clear waiver.