The law as it stands at the moment was branded by Lord Nicholls of Birkenhead as 'complex and obscure'.
The owners of plots of land at Nash, near Newport, Gwent, failed in a last ditch, House of Lords bid to win more money in respect of the 1997 compulsory purchase of their land for use as a nature reserve in the wake of the development of the Cardiff Bay Barrage.
They had challenged an Appeal Court ruling which backed a Lands Tribunal decision in November 2000 that they were not entitled to extra compensation.
The Lands Tribunal found that the scheme underlying the compulsory purchase was the Cardiff Bay work and held that under land compensation rules the effect on the value of the nature reserve plans should not be taken into consideration.
Today five law lords unanimously upheld the earlier rulings. However, Lord Nicholls opened the leading judgment in the case saying: 'Unhappily the law in this country on this important subject is fraught with complexity and obscurity.'
Nevertheless, backing the earlier decisions he described compulsory purchase as 'an essential tool in a modern democratic society.'
It facilitated planned and orderly development, he said.
When the case was before the Court of Appeal Lord Justice Carwath had called for 'urgent reform' of the law on compensation for compulsory acquisition, which he said currently involves a 'tortuous journey through obscure statutes and apparently conflicting case-law.'
The land at the centre of the case comprised 225 acres of low-lying farmland adja cent to the Severn Estuary which formed part of 1,000 acres acquired by the Welsh Development Agency for the development and maintenance of a wetlands reserve involving the creation of saline pools, reed-beds and managed grassland.
The nature reserve stemmed from the scheme to construct the Cardiff Bay barrage, lying 15 km to the west the plan being that it would compensate for the loss of bird habitats in Cardiff Bay.
However, the land owners claimed that the loss of the bird habitats in Cardiff Bay had given their land a value in excess of agricultural value on the basis that, together with the rest of the 1,000 acres, it constituted the most suitable area for the nature reserve which it was necessary to establish as a compensatory measure. In the circumstances they claimed that their land was worth more than they were offered.
But today Lord Nicholls said that both the Lands Tribunal and the Court of Appeal in the earlier decisions had been right to consider that the acquisition of the land hadnot been solely for the purpose of a nature reserve but had been an integral part of the barrage project. In those circumstances the owners were not entitled to a higher level of compensation.
Lord Brown, although agreeing said: 'I would acknowledge the present highly unsatisfactory state of the law and echo Lord Justice Carnwath's plea in the court below for fresh parliamentary consideration of this important area of the law.'
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