Local authorities have wide powers to restrict public access to buildings or structures which they consider dangerous. However, a Supreme Court case involving closure of a seaside town’s crumbling pier underlined that those who suffer loss of trade as a result of such emergency action are usually entitled to compensation.
The local council employed powers under the Building Act 1984 to shut the pier on the basis that it presented an unacceptable risk to the public. A corporate tenant that ran a bingo hall and amusement arcade on the pier assigned its potential cause of action under Section 106 of the Act to a company (the assignee) which duly launched a compensation claim against the council.
In resisting the claim, the council argued that the tenant was aware of the perilous condition of the pier and should have taken its own steps to exclude its employees and visitors from the structure. Its failure to do so was said to amount to a default that precluded a successful claim under the Act. That defence did not persuade the High Court or the Court of Appeal and the assignee’s claim was upheld.
In dismissing the council’s appeal, the Supreme Court noted that responsibility for repair and maintenance of the pier lay not with the tenant but with its landlord, the owner of the structure’s freehold. Any default by the tenant was unconnected to the obligations imposed by the Act. The ruling entitled the assignee to compensation for business interruption in the period between the closure and the council’s decision being embodied in a court order.