The Supreme Court has today found against Wolverhampton City Council over it use of compulsory purchase powers to acquire Sainsbury’s land for a Tesco development.

This brings to an end two years of litigation on the site on Raglan Street. Wolverhampton used CPO powers to acquire the majority land holding of supermarket Sainsbury’s in the site in order allow rival Tesco to bring forward a development on the same site.

Sainsbury’s owned 86% of this site, with Tesco owning most of the remainder. Both wished to develop on the site and the council decided to give both outline planning permission. Unless the council used its CPO powers on the site, neither plan could proceed.

Tesco also controls a site in Wolverhampton city centre called the Royal Hospital site. It told the council that it would redevelop the RHS site if the council exercised its CPO powers on the Raglan Street site so it could also proceed with that development. The council did this.

The Supreme Court – which took over from the House of Lords on 1 October 2009 – said it was wrong to use an unconnected development as a reason to CPO Sainsbury’s land.

Ashley Damiral, associate at law firm CMS Cameron McKenna – who advised Sainsbury’s – said: “This judgement will have far reaching consequences for regeneration schemes across the country that involve the use of local authority compulsory powers for planning purposes.”

He added: “The judgment defines the scope of planning compulsory purchase powers, with reference to planning obligations principles. It also makes clear that compulsory purchase and related land disposal decisions by a local authority must be taken separately.”

• Wolverhampton Development Company to be wound up
• Tesco loses appeal over £150m Liverpool scheme
• One North East to buy Vaux Brewery site from Tesco
• Manchester issues CPO for Britannia-owned fire station
• Thames Gateway approves Tesco mixed-use scheme