Respondent acquiring land by way of compulsory purchase order — Lands Tribunal determining compensation payment — Appellant beating respondent’s unconditional offer but falling short of full amount of claim — Lands Tribunal failing to award full costs to appellant — Appeal dismissed
The respondent Secretary of State compulsorily purchased an area of land from the appellant for the purposes of constructing the Channel Tunnel Rail Link. Under section 5 of the Land Compensation Act 1961, the compensation award was to be the open market value of the land. The Lands Tribunal determined the value at £475,000 per acre. The respondent had argued for £460,000 per acre, and the appellant for £638,015 per acre.
Although the appellant had beaten the respondent’s sealed, unconditional offer, the tribunal ordered the respondent to pay only three-quarters of the appellant’s costs, on the ground that it found the appellant’s suggested value to be particularly high. The appellant appealed.
Held: The appeal was dismissed.
A finding by the tribunal that the appellant’s assessment of value was particularly high would not, in itself, have been sufficient reason for the tribunal to disallow part of its costs. In general terms, the proper approach for the award of costs to a successful claimant (which would include a claimant who was awarded more than the respondent’s unconditiononal offer) would have been that the claimant was entitled to its costs, incurred in the proceedings, in the absence of some “special reason” to the contrary.
It was for the tribunal to decide whether such special reasons existed, but such reasons would have included costs that could not, on any sensible basis, have been regarded as part of the reasonable and necessary expenses of determining the amount of the disputed compensation. In assessing the disputed value of land, argument and difference of opinion as to comparable sites was a legitimate exercise of the court process. Valuation was an inexact science. It was therefore rarely appropriate to make an adverse costs order against a claimant on the basis that what the court found to be an unacceptable valuation had led the claimant to submit what was eventually found to be an “exaggerated” claim. However, the tribunal did have the power to make such an order where it concluded that such arguments and discussions had been introduced unreasonably, and a significant amount of the tribunal’s time wasted as a result.
In the instant case, the tribunal considered that the proceedings were unnecessarily complicated and lengthened by submissions made by the appellant’s expert witness. Comparisons to other sites were found to be lacking in utility and were rejected. The tribunal’s reasons for reducing the appellant’s costs had not, therefore, been based upon the fact of whether the costs awarded were closer to the figure submitted by the appellant or the respondent, but upon the fact that the appellant’s unnecessary and unhelpful submissions had escalated their costs.
Michael Barnes QC (instructed by Mayer Brown Rowe & Mawe) appeared for the claimant; Guy Roots QC and Robert Walton (instructed by Ashurst Morris Crisp) appeared for the respondent.
Vivenne Lane, barrister