Compensation – Part I of Land Compensation Act 1973 – Claim for diminution in value of land consequent upon works of construction and extension to three roads – Reference to Lands Tribunal (LT) — Whether LT lacking jurisdiction to determine claims by reason of claimant’s earlier acceptance of cheque in settlement of claims – Whether settlement relating to part only of claims – Preliminary issue determined
In 1996, the claimant submitted three claims for compensation to the defendant council, under Part I of the Land Compensation Act 1973, in respect of a depreciation in value of his property consequent upon works of construction and extension to three roads. The defendants made a reference to the Lands Tribunal (LT) to determine the amount of the compensation, but, meanwhile, negotiations proceeded between the parties, resulting in an offer by the defendants of £6,000, plus interest, as compensation in respect of the “scheme”, which was defined to include two of the roads in question. They also sent a formal notice of receipt that the claimant was to sign, stating that he accepted that sum in full and final settlement of his claim “in relation to the Scheme under Part I of the Land Compensation Act 1973”. Following the calculation of interest, the claimant agreed a sum to settle his claim and cashed the defendants’ cheque for £7,665.53, but did not sign or return the formal notice of receipt.
The defendants sought the claimant’s consent to withdraw the LT reference. The claimant objected, contending that £7,665.53 did not reflect a realistic settlement. Although an impending LT hearing was cancelled, the claimant made a further reference in 2008. The defendants contended that the LT had no jurisdiction to determine the claim since it had already been settled following the claimant’s previous acceptance of the cheque. That question was determined as a preliminary issue.
Decision: The preliminary issue was determined.
If a dispute arose between two parties, and one of them submitted to the other a cheque for a certain sum, proposing a settlement in that sum upon a certain basis, and if the other party, without demur or qualification, accepted the cheque and paid the money into its account, it would be held to have entered into a contract of compromise on the terms offered: Bell v Galynski [1974] 2 Lloyd’s Rep 13 applied. Looking at the relevant documents, the defendants’ earlier correspondence suggested that they wanted to settle the entirety of the claim. However, the later, more formal documents, including the offer letter and notice of receipt, expressly referred only to the claimant’s claim in respect of two of the roads and did not mention the third. The matter should be determined by reference to those more formal documents. Therefore, the defendants should be held to have offered the relevant sum in settlement not of the entirety of the claimant’s claim, but of the claims relating to two of the roads only. The parties had compromised those claims such that the LT had no jurisdiction to determine them, but it did have jurisdiction to determine the claim in respect of the third road.
The matter was dealt with by way of written representations only.
Sally Dobson, barrister