Compensation – Works by statutory undertaker – Surveyor’s fee – Compensating authority installing new water main across claimant’s land pursuant to statutory powers under Water Industry Act 1991 – Claimant retaining surveyor to negotiate compensation claim – Whether fee claimed by surveyor reasonable – Whether authority to pay fee on basis of surveyor’s standard hourly rate plus expenses or different sum calculated according to Ryde’s scale – Judgment for claimant
The claimant held a mixed livestock farm on a farm business tenancy. In May 2008, the compensating authority commenced works to install a new water main across his holding, pursuant to its statutory powers under section 159 of the Water Industry Act 1991. The formal notice stated that the works would be completed within six months. However, they were delayed because difficulties were encountered arising from the need to cross a railway line and to comply with environmental legislation to protect dormice.
In November 2008, the claimant instructed a surveyor in respect of compensation matters relating to the scheme. The parties entered into lengthy correspondence as to the basis on which the surveyor’s fee was to be calculated, but they failed to reach agreement. The scheme was substantially completed in October 2009, 12 months behind schedule. The claimant’s surveyor submitted a detailed statement of claim for compensation to the authority in January 2010, in the sum of £24,274. Following negotiations, which resulted in the undertaking of further reinstatement works by the authority’s contractors, a total compensation figure of £12,940 was agreed for all matters, save for the fees payable to the claimant’s surveyor for his work in negotiating the claim. The fees issue was referred to the tribunal for determination.
The claimant contended that he was entitled to his surveyor’s fees on a quantum meruit basis in the sum of £3,219.50, excluding VAT; that reflected the surveyor’s firm’s standard terms and conditions for professional work and his standard hourly charge rate of £120 per hour, plus out-of-pocket expenses. The authority contended that the fees should be calculated on the basis of Ryde’s scale (1996) plus 20%, that being the basis on which other landowners’ compensation claims relating to the main had been agreed. It also contended that regard should be had to the CPR, particularly CPR 44.3 and 44.5, relating to the award of costs.
Held: The tribunal found in favour of the claimant.
CPR 44.5 was not relevant to the ascertainment of a reasonable surveyor’s fee, incurred in consequence of the exercise of statutory powers by an undertaking such as the compensating authority. Para 12.2 of the tribunal’s Practice Directions, stating that its costs discretion would usually be exercised in accordance with the principles operating in the High Court and county courts, applied only to the costs of any proceedings in the tribunal and not to decisions of the tribunal on substantive issues that fell to be determined in the proceedings.
It was not appropriate to calculate the claimant’s surveyor’s fee according to Ryde’s scale. Following the official abandonment of that scale in 2002, surveyor’s fees now fell to be calculated according to the RICS Guidance Note on the calculation of fees relating to the exercise of statutory powers in connection with land and property; accordingly, fees should in all cases be proportionate to the size and complexity of the claim, and be commensurate with the time, effort and expertise required to deal with the case: Matthews v Environment Agency [2002] 3 EGLR 168 considered. Therefore, the fee did not fall to be calculated, as it was under Ryde, by reference to a scale of percentages applied to the leel of compensation eventually agreed. Any relationship between the fee calculated on such a basis and the size and complexity of the claim, or the time, effort and expertise required to deal with the case, would be coincidental.
The claimant’s original statement of claim was reasonable. Representation by an associate partner, at the hourly rate of £120 applied to the time taken, and expenses based on 50p per mile, was proportionate to the size and complexity of the claim and commensurate with the time, effort and expertise required to deal with the case. The claimant’s surveyor had been justified in seeking to agree a time-related fee with the authority’s surveyor rather than one calculated by reference to the officially abandoned Ryde, and to charge for the time he spent doing so. There were no sound reasons for contesting his proposed charges and, accordingly, his fees payable by the compensating authority would be determined in the sum of £3,219.50. Since VAT was recoverable by the claimant, that should not be the subject of compensation.
The claim was determined under the written representations procedure.
Sally Dobson, barrister
