Section 9(1) of the Limitation Act 1980 (“the 1980 Act”) provides as follows: “An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
In Hillingdon London Borough Council v ARC Ltd (No 1) [1999] ChD 139 CA, the Court of Appeal held that compensation for compulsory purchase payable as a result of entry onto land pursuant to section 11 of the Compulsory Purchase Act 1965 was “a sum recoverable by virtue of any enactment” even though the amount of compensation had not been agreed or determined at that point. A claim for compensation, therefore, may be barred under section 9(1) of the 1980 Act.
Later, however, in Hillingdon London Borough Council v ARC Ltd (No 2) [2000] 3 EGLR 97, a differently constituted Court of Appeal held that the acquiring authority in that case was estopped by convention from relying upon the expiry of the six-year time limit, having regard to ongoing negotiations between the parties. The court pointed out that estoppel in this context must involve a shared assumption and communication.
These two decisions have now been followed at first instance by the court in Saunders v Caerphilly County Borough Council [2015] EWHC 1632 (Ch); [2015] PLSCS 180. In this case, the claimant had been the owner of a strip of freehold land compulsorily acquired for highway purposes, notice to enter having been served in 1991. Over twenty three years later, despite protracted negotiations, the amounts of compensation had not been agreed. The claimant then applied for an order that the defendant should refer the matter to the Lands Chamber of the Upper Tribunal. The defendant contended that the claims were barred by the 1980 Act.
The court first held that, on the basis of Hillingdon, the ambit of section 9(1) of the 1980 Act was wide enough to embrace the claims formulated by the claimant. In reality, he was seeking to recover a sum of money, namely the amounts of compensation to be determined by the Upper Chamber. It then went on to hold that, by virtue of a number of factors, the defendant was estopped by convention from taking the limitation defence.
One such factor in particular was a letter written to the claimant by the defendant’s head of legal services amounting to a clear communication that if the amounts of compensation were not agreed, they would be referred to the Upper Tribunal. Implicit in that indication was that no limitation point would be taken.
John Martin is a planning law consultant