Aysin Behchet v London Borough of Southwark
Decision date: 12 May 2015
Neutral citation: [2015] UKUT 182 (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 case concerns compensation for compulsory acquisition of the freehold of 91 Kennington Park Road, a derelict Grade II listed house vested on 20 March 2008. The Tribunal had to decide open market value at vesting, whether an auction sale of a building lease indicated freehold value, and which claimed costs were recoverable. The Tribunal accepted the claimant’s inspected agent evidence and fixed open market value at £800,000 (after sales costs), awarded a basic loss payment of £60,000 and allowed specified reinvestment, counsel and valuation fees while disallowing pre‑reference costs and certain counsel fees.
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
An auction sale of an interest can be a transparent guide to market value only if the interest sold is comparable to the unencumbered freehold; where lease terms or other differences are material the auction price should carry reduced weight. Contemporaneous local agent evidence based on inspection may be decisive when auction or residual valuation approaches are unreliable.
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 observed that indexation may help comparability but the choice of index matters and indexing an auction price may reflect movement only in the indexed interest rather than the freehold. It also commented that the residual valuation method is fragile where refurbishment costs and developer profit are uncertain and should be treated with caution.