Pro Investments Limited v London Borough of Hounslow
Decision date: 6 September 2021
Neutral citation: [2021] UKUT 201 (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 concerned valuation and compensation for land (Capital Court) taken under Hounslow's Lionel Road South CPO, with the Tribunal required to fix open market value on the statutory no-scheme assumption and decide recoverable CAAD-related and early redemption costs. The Tribunal applied a residual appraisal (checked against comparables), concluded a market value of £10,250,000 at 1 September 2016, and awarded total compensation of £11,245,413 including specified CAAD and finance costs. The decision was final on all matters except the costs of the reference.
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: medium
When valuing land on the statutory no-scheme hypothesis, evidence from scheme-affected transactions and scheme-world sales must be adjusted (or treated with caution) because they reflect the presence of the scheme; for high-density development sites the residual method is an appropriate primary approach with comparable evidence used as a sense-check where comparables are hard to adjust to the counterfactual. The Tribunal may also admit post-hearing written submissions as substitute evidence with party consent where material has been exchanged.
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 Tribunal criticised expert evidence that functioned as party mouthpieces on non-expert matters (e.g. detailed cost proofs), and observed that transactions influenced by the scheme—such as off-market sales to the scheme developer—carry limited weight in no-scheme valuations. It also indicated that developer contingency may properly be absorbed within developer profit rather than allowed as a separate deduction in residual appraisals in appropriate cases.