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Seaside Holiday Park Owners Win Compensation Test Case

In a guideline ruling of particular interest to seaside landowners, a tribunal opened the way for the owners of a holiday village to seek millions of pounds in damages after public harbour construction works caused a shift in tidal flow which damaged sea defences.

seaside townPursuant to an Act of Parliament, the harbour was built by a port authority about 3.5 kilometres away from the village, which comprised more than 900 holiday caravans. Its owners claimed that the resultant movement in tides undermined sea defences which protected cliffs and a beach which adjoined the village. Part of the beach was lost and the defences had to be substantially repaired and modified.

In those circumstances, the owners sought about £15 million in compensation from the port authority. In ruling in the owners’ favour on a number of preliminary issues, the Upper Tribunal (UT) found that they were entitled to seek damages under Section 10 of the Compulsory Purchase Act 1965 in respect of any ‘injurious affection’ of their land arising from the harbour works.

The UT found that, were it not for the statutory authorisation of the works, the owners could have launched a claim in nuisance against the port authority. It also ruled that, in principle, the owners were entitled to seek recovery of the costs of the remedial works as well as compensation in respect of any diminution in the value of their land. The cause of action under the Act did not accrue until physical damage to the owners’ land became apparent and their claim was therefore not out of time.

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