C O N T E X T 9 1 : S E P T E M B E R 2 0 0 5 35 The processes at (i), (ii) and (iv) were put on hold while issue (iii) was dealt with. This was originally due to be heard at Worcester County Court but was transferred to the High Court of Justice, Chancery Division, Companies Court and was heard in July 1992. The court ruled was that the CPO was not a proceeding for the purposes of the administration of the company and that the CPO could therefore proceed. Items (i) and (ii) were then heard at Canterbury magistrates’ court in October 1992 when the applications were rejected, with costs awarded to the city council. In the meantime the Department of the Environment raised some objections to the CPO (despite the fact that it had approved a draft), some of them prompted by the building owners. The objections included the facts that (i) the repairs notice had not been served on the freeholder; (ii) the repairs notice had been served quoting the 1971 Act when the 1990 Act was in force; (iii) an incorrect section of the 1990 Act had been quoted in the CPO. These points were countered by the following arguments on behalf of the council: (i) the repairs notice had been served on another company in the same group, which shared the same company secretary and in accordance with the details given in the requisition for information completed and signed by the same company secretary; (ii) proforma notices had been used on the express advice of the DoE, the owner had not objected and they had not been prejudiced; (iii) the owner had not objected and they had not been prejudiced. After much negotiation the DoE accepted that the CPO could proceed at the council’s risk of challenge, and this course was chosen. The alternative was to start again with the consequent time delays. The matter progressed to an inquiry in June 1994. The inspector heard all the evidence but noted that he could not consider the issue of minimum compensation since it had been the subject of a decision in the magistrates’ court. That decision was subsequently overruled by the secretary of state, resulting in the necessity for a re-opened inquiry to consider this point (which effectively meant that the owner had two separate chances to object to the minimum compensation clause). This further inquiry was held in September 1995. The decision of the secretary of state to confirm the CPO with minimum compensation was made in December 1995. There were then some delays while the council considered the financial implications of proceeding with the CPO. In particular efforts were made to try to assess (i) the unrepaired value of the property; (ii) the compensation payable under ‘minimum compensation’; (iii) the compensation to the shop occupier for the loss of the lease (unexpectedly, the occupier subsequently left in advance of the notice to treat being served); (iv) the costs of repair; (v) the value of the property in good condition. Notice to treat was served in August 1998 and the notice of entry was served in July 2001, when the council finally took possession. Between 1990 and 1998 the owners took steps which could be interpreted as deliberate tactics to frustrate the CPO including: (i) appearing to instruct builders to carry out the works required by the repairs notice (but not actually doing so); (ii) putting the building on the market (with an unrealistically high asking price) in an effort to make the council think that the matters would be resolved by a new owner; (iii) changing the ownership of the building (to another company in the group). Often these techniques coincided with court hearings, and were put forward as reasons to delay proceedings in the hope that the matter would be resolved. On each occasion the council rejected such requests on the grounds that the owners had not fulfilled any previous undertakings (hence the need for the repairs notice and CPO in the first place). The taking of possession set up a whole new set of problems as the issue of compensation remained to be resolved (with no prospect of the council being able to back out at that stage). At one stage, concerns were expressed that not only was the compensation for the purchase an unknown figure, but there was also the issue of compensation due to the company trading in the shop (a related company in the group). Helpfully, however, the occupier of the building suddenly stopped trading and vacated the property before the council took possession, so the issue of compensation for loss of trade never came up. In the meantime the council was taking advice as to what ‘minimum compensation’ would be likely to mean. The advice was that valuations would be based on the value of the building in repaired condition (with the existing level of use), less the costs of reasonable repairs. Surveyors were employed to draw up a The buildings fronting the alleyway were left empty as decay took hold.
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