Respondents purchasing appellant’s land by way of compulsory purchase order — Parties agreeing terms by later agreement — Appellant applying to Lands Tribunal for determination of compensation — Limitation Act 1980 precluding application based upon original date of entry — Whether later agreement merely “gloss” on original statutory provisions or contractually binding in own right so as to come within limitation period — Appeal allowed
In March 1992, the respondent local authority made a compulsory purchase order in respect of part of the appellant’s land in order to carry out road improvements. The order was confirmed by the Secretary of State for Transport in October 1994, and, in January 1995, a notice to treat and a notice of entry were served on the appellant. The terms upon which the parties would assess compensation, and the way in which the land was to be transferred, were agreed by letter in February 1996.
In January 2002, the appellant issued a notice of reference to the Lands Tribunal to determine the amount of compensation. The tribunal held that the council had entered onto the land in August 1995, and that, since the application had been made more than six years after that date, it fell outside the limitation period as determined by section 9 of the Limitation Act 1980.
The appellant appealed that decision on the ground, inter alia, that its claim for compensation was saved by virtue of the 1996 agreement. Clause (4) of that agreement held that the respondents should pay to the appellant “by way of consideration for the loss of the land compensation to be agreed but assessed in accordance with the statutory Compulsory Purchase Code…”. The respondents maintained that the wording indicated that the agreement was merely a gloss on the original purchase terms under the statutory provisions, and did not serve to supplant the parties’ statutory rights.
Held: The appeal was allowed.
The significance of the date of entry was that it fixed the date for the assessment of compensation (see Birmingham Corporation v West Midland Baptist (Trust) Association (Inc) [1970] AC 874) and that interest ran from the date of possession. There was no appeal from the Lands Tribunal determination that the respondents had entered onto the land pursuant to the notice of entry in August 1995, and, on that basis, the notice of reference fell outside the limitation period.
However, the appellant’s claim was saved by the enforceable contractual agreement of February 1996. Clause (4) constituted a clear contractual obligation upon the respondents to pay to the appellant “by way of consideration” an amount calculated by a particular method. The fact that that method of calculation replicated the one used in the statutory code did not deprive the clause of contractual effect.
On an ordinary reading of the 1996 agreement, the appellant had obtained enforceable contractual rights, notwithstanding any statutory limit that would have arisen apart from the agreement. As a result, the reference to the tribunal took effect as a matter of arbitration under section 1(5) of the Lands Tribunal Act 1949, rather than as a determination of disputed compensation under section 1(3).
Edward Davidson QC (instructed by Morgan Cole) appeared for the appellant; Andrew Tait QC and Shourav Lahiri (instructed by the solicitor to Kent County Council) appeared for the respondents.
Vivienne Lane, barrister