Lands Tribunal awarding compensation and costs of hearing for compulsory purchase of land – Court of Appeal referring matter back to tribunal for reconsideration – Tribunal increasing compensation and awarding costs of first and second hearing – Council paying compensation and costs – Plaintiff claiming interest on amount of costs – Whether plaintiff entitled to interest on amount of costs of first award running from date of first award – Judgment for the plaintiff.
The Lands Tribunal made an award totalling £650,000 as compensation in respect of a compulsory purchase order. The tribunal ordered that the defendant council were to pay costs taxed on the High Court scale. Subsequently the Court of Appeal ordered that the assessment of compensation be remitted to the Lands Tribunal for reconsideration, but did not disturb the order for costs made by the tribunal. After reconsideration the tribunal made a fresh award totalling £2.16m and ordered the council to pay the costs of the reference "including those relating to the initial hearing". The benefit of the award was assigned to the plaintiff bank. The defendant duly paid the increased award with interest and the costs of both hearings before the tribunal. The plaintiff issued a writ claiming interest on the amount of the costs from the dates the first and second awards had been made respectively, until payment of those costs had been made. The plaintiff then made an application for summary judgment.
The plaintiff contended that the costs awarded by the Lands Tribunal were "a sum directed to be paid" by each award, were therefore within section 20 of the Arbitration Act 1950 and accordingly carried interest as from the date of the award at the same rate as a judgment debt. The council contended that section 20 of the 1950 Act did not apply because the section was expressly "subject to any enactment which prescribes the rate of interest" and it was therefore subject section 11(1) of the Compulsory Purchase Act 1965 and section 32 of the Land Compensation Act 1961 which did not provide for payment of interest on costs. In the alternative the council contended that an award of costs was not "a sum directed to be paid" within section 20 of the 1950 Act and that if the awards did carry interest, it only ran from the date of the second award.
Held Judgment for the plaintiff.
1.The words "subject to any enactment which prescribes the rate of interest" in section 20 of the 1950 Act did not apply because they only referred to the rate of interest and not to the entitlement to interest in principle and also because they referred to the rate of interest on any compensation and not the interest on costs. Therefore section 11 of the 1965 Act and section 32 of the 1961 Act did not have the effect of disapplying section 20.
2. An award for costs to be taxed constituted a sum "directed to be paid" within the meaning of section 20 of the 1950 Act: see Hunt v RM Douglas (Roofing) Ltd [1990] AC 398. Therefore the awards of costs were within the scope of section 20.
3. Nothing was done in the course of the proceedings which had the effect of abrogating or putting into suspense the award of costs made at the conclusion of the first hearing. Therefore the plaintiff was entitled to judgment for interest on the amount of the costs of both awards from the dates of which the first and second awards had been made respectively until the date of payment of those costs.
Jonathan Gaunt QC (instructed by Burges Salmon, of Bristol) appeared for the plaintiff; Adrian Trevelyan-Thomas (instructed by Sharpe Pritchard, London agents to Kent County Council) appeared for the defendants.