Property Owners Not Entitled to Share in Saving Achieved by Wayleave

The Upper Tribunal (UT) has rejected a claim by the owners of a property that their compensation for the grant of a wayleave authorising the retention of electricity lines over their land should include a share in savings achieved by avoiding more costly alternative routes for the lines.

The wayleave had been granted for 15 years in favour of an electricity supplier under Paragraph 6 of Schedule 4 to the Electricity Act 1989, authorising the retention of a high-voltage overhead line and a second, low-voltage line. The electricity supplier accepted that the property owners were entitled to compensation equal to the resulting diminution in the value of their property, which was agreed to have been £43,800. However, the property owners also sought compensation for loss of commercial value and for disturbance.

They contended that a sum of £200,000 would have been agreed for the retention of the lines in a commercial negotiation with an electricity supplier lacking statutory powers, given that the cost of providing new lines over an alternative route would have been around £675,000. Had the wayleave not been granted, they would have been in a strong negotiating position with a telecommunications company in respect of access to a mast which received electricity via their land. The electricity supplier submitted that the proper measure of their loss was the extent to which the value of their property had been diminished as a result of the grant of the wayleave. Its need for the wayleave and the extent to which it might have benefited from the grant, including by avoiding the greater expense of an alternative route, were irrelevant considerations.

The UT noted that the principle of equivalence – that an owner should be paid neither less nor more than their loss – requires that an assessment be made of the value of the interest to the owner, and that any special value it may have to the acquiring authority must be disregarded. The figure of £200,000 assumed that, before the grant of the wayleave, the property owners' interest had a value that depended on the electricity supplier's need to run its electricity lines across their land. The UT also observed that, had the high-voltage line not been available to serve the mast, the telecommunications company would have been entitled to insist that the electricity supplier provide one.

The UT concluded that the cost of providing an alternative line to supply electricity to the telecommunications provider and other customers served by the high-voltage line, and the sum the electricity supplier might have paid to avoid that cost, were irrelevant. They could only be used to measure the value of the property owners' land to the electricity supplier, not its value to them. Without the electricity supplier's distribution network and the needs of its customers, the property owners' land had no additional commercial value for the transmission of electricity.

However, the UT found that the property owners were entitled to £5,000 in compensation for disturbance, reflecting the cost of fencing off their garden for safety reasons from a field where one of the poles supporting the high-voltage line was sited. Their total compensation therefore came to £48,800.