In a recent case (Sainsbury’s Supermarkets Ltd v Wolverhampton City Council and Tesco Stores Ltd) the Court of Appeal dismissed Sainsbury’s challenge to the Council’s resolution to make a compulsory purchase order in favour of Tesco’s competing scheme.

The case is interesting in that the Court held that the Council could take into account cross-subsidies being provided by each scheme.

In this case each supermarket had obtained an outline planning permission to develop the same site. The Council resolved to make a CPO in favour of Tesco’s scheme. The Council preferred that scheme as it provided a cross-subsidy for the development of another site in the area. The Court of Appeal agreed that the Council was entitled and in fact was required to consider the proposed cross-subsidy as it provided a “wider benefit”.