St John Ambulance v Teignbridge District Council

Factual and Procedural Background

The Appellant, a charitable body owning a community hall since 1939, decided to sell the property in early 2015. The property was marketed with an asking price of £125,000, and sealed bids were invited. A nomination was made by a local community group (the Friends) to include the property on the Respondent's List of Assets of Community Value (LACV). The property was listed on 4 June 2015, after which the Appellant cancelled a sale agreement with a prospective purchaser who had offered £135,135.13 subject to contract. The moratorium provisions under the Localism Act 2011 were triggered, delaying the sale process. Subsequently, the property was sold at auction in October 2016 for £80,000. The Appellant claimed compensation from the Respondent for losses allegedly caused by the listing and moratorium periods, including capital loss, deferred consideration, costs, and interest. The Respondent refused the claim following a review, leading to this appeal before the First-tier Tribunal.

Legal Issues Presented

1. Whether compensation under Regulation 14 of the Assets of Community Value (England) Regulations 2012 is payable for loss or expense caused by the inclusion of an asset on the LACV, including diminution in value.
2. Whether the Appellant has established, on the balance of probabilities, that the loss claimed was caused by the listing and moratorium periods.
3. The correct interpretation of the scope and application of Regulation 14 regarding compensation claims.
4. Whether certain heads of claim, including costs and interest, are recoverable and compliant with statutory time limits.
5. Whether the claim or any part of it is time barred under the Regulations.

Arguments of the Parties

Appellant's Arguments

• The sale would have completed at £135,000 but for the listing and moratorium, causing a capital loss.
• Costs incurred due to duplication and delay caused by the moratorium are recoverable.
• Regulation 14 does not exclude claims for diminution in value; the statutory language supports compensation for loss of value.
• Precedent decisions relied upon by the Respondent are inconsistent and do not preclude diminution claims.
• The purchaser withdrew due to listing, not merely community opposition, and was unaware of the nomination at bidding.
• Interest claims reflect the opportunity cost of delayed receipt of sale proceeds, calculated on a conservative rate of 6.118%.
• Internal management costs and costs of granting a lease to the community group are recoverable expenses.
• Claims for appeal costs should be recoverable as part of the overall loss.

Respondent's Arguments

• The diminution in value claim is not recoverable as a matter of law under Regulation 14.
• The property was a community facility before listing; the listing only confirms status and does not cause diminution.
• The purchaser’s bid was made without knowledge of the nomination, which should have been disclosed earlier; non-disclosure rendered the bid defective.
• The market value of the property as a community facility is closer to £80,000, as evidenced by the auction price and offers from the community group.
• Allowing compensation based on an artificially high price would be unfair and contrary to the statutory purpose.
• Costs claimed for the second sale and internal management are not attributable to the listing or moratorium and are not recoverable.
• Interest claims are not supported by the Regulations and are time barred.
• The claim includes new heads of loss not properly submitted within statutory time limits and should be rejected.
• The purchaser’s position is unclear, and the Appellant bears the evidential burden to prove the claim.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Chadwick v Rossendale Borough Council (CR/2015/0006)	Obiter comment that compensation for diminution in value by reason of listing may not have been intended by legislature.	The court found the decision was obiter and not determinative; it was not considered helpful in this case.
Whitehead v Tunbridge Wells Borough Council (CR/2017/0002)	Considered claims for loss flowing from failed sales; did not exclude diminution claims but failed on causation.	The court distinguished this case from Chadwick and found no statutory bar to diminution claims in principle.
Re Eastwood [1975] Ch 112	Internal management costs may be recoverable if they would otherwise have been outsourced.	Supported the recoverability of internal costs claimed by the Appellant.
Sidewalk Properties Ltd v Twinn [2015] UKUT 0122	Reinforced the principle that internal costs can be compensable if they replace outsourced work.	Applied in allowing recovery of internal management costs.
R v Exeter City Council exp Glidden [1985] 1 All ER 493	Legal principle that a person should not benefit from their own wrong.	Referenced by Respondent to argue non-reliance on purchaser's bid made without disclosure.
F C Shepherd v Jerrom [1987] QB 301	Same principle as above regarding benefit from one's own wrong.	Supported Respondent’s submission on non-reliance on defective bid.

Court's Reasoning and Analysis

The Tribunal examined the scope of Regulation 14 of the Assets of Community Value (England) Regulations 2012, focusing on whether compensation is payable for loss or expense caused by the act of inclusion of an asset on the LACV, including diminution in value.

The Tribunal rejected the Respondent’s narrow interpretation that compensation is limited to losses arising solely from procedural compliance after listing. It found that Regulation 14(2) is broad enough to cover losses arising at the point of listing, provided they would not have been incurred but for the listing.

While earlier decisions (Chadwick and Whitehead) were considered, the Tribunal found them distinguishable and not determinative on the issue of diminution claims. The Tribunal emphasized the statutory language and supporting materials such as the Explanatory Memorandum and Guidance, which contemplate compensation for loss of value due to listing.

On causation, the Tribunal found it more likely than not that the sale to the Purchaser would have completed at £135,135.13 but for the listing. The evidence showed the Purchaser withdrew due to the listing, despite some ambiguity and delayed disclosure of the nomination.

However, the Tribunal was not satisfied that the difference between the £135,000 bid and the £80,000 auction price represented a loss solely attributable to the listing on the valuation date. The lack of formal valuation evidence reflecting the market value with knowledge of the listing undermined the claim for capital loss.

Regarding the claim for interest on delayed receipt of sale proceeds, the Tribunal accepted in principle that foregone investment income could be compensable but found the Appellant failed to prove that such loss was actually incurred or wholly caused by the moratorium delay.

The Tribunal distinguished between costs incurred due to the listing and those arising from the Appellant’s decisions, rejecting recovery of costs related to the second sale and internal costs unrelated to the listing. It allowed recovery of certain abortive sale costs, internal management time directly attributable to the listing, and costs related to granting a licence to the community group, subject to time limits.

The Tribunal also rejected claims for interest awards and appeal costs due to lack of statutory power and procedural non-compliance respectively.

Finally, the Tribunal found the compensation claim was not time barred as the claim was made within the statutory 13-week period following the last compensable loss or expense.

Holding and Implications

The Tribunal ALLOWED THE APPEAL IN PART and awarded compensation to the Appellant in the sum of £5,042.75. This sum represents certain abortive sale costs, internal management costs attributable to the listing, and costs related to the short-term licence granted to the community group.

The Tribunal rejected the principal claim for capital loss of £55,135.13 and interest claims due to insufficient evidence and statutory limitations. It also rejected claims for costs related to the second sale and appeal costs for procedural reasons.

The decision clarifies that compensation under Regulation 14 can include loss or expense arising from the act of listing itself, including diminution in value claims, but such claims require robust valuation and causation evidence. The ruling emphasizes the importance of statutory compliance and evidential rigor in compensation claims under the Assets of Community Value regime.

No new precedent was established beyond the interpretation of Regulation 14’s scope and application to compensation claims.