England and Wales Lands Tribunal

[2000] EWLands ACQ_81_2000 (03 August 2000)

ACQ/81/2000

COMPENSATION - notice of reference - preliminary issues - whether compensation already subject of binding contract - Limitation Act 1980, s 9 - whether claim-statute barred - whether acquiring authority estopped from relying on limitation - held binding contract - no estoppel - claim dismissed

LANDS TRIBUNAL ACT 1949

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN LLANELEC PRECISION ENGINEERING CO LTD Claimant

and

NEATH PORT TALBOT Acquiring

COUNTY BOROUGH COUNCIL Authority

Re: Land at Cadoxton Road, Neath

Before: The President

Sitting at 48/49 Chancery Lane, London WC2A 1JR

on 12, 13 and 17 July 2000

The following cases are referred to in this decision:

Hillingdon London Borough Council v ARC Ltd [1999] Ch 139

Munton v GLC [1976] 1 WLR 649

Mercer v Liverpool, St Helen's and South Lancashire Railway [1903] 1 KB 652, [1904] AC 461

Harding v Metropolitan Railway Co (1872) 7 Ch App 154

London Borough of Hillingdon v ARC Ltd (No.2) (16 June 2000, unreported)

Co-operative Wholesale Society v Chester-le-Street District Council [1996] 46 EGLR 158, [1998] 38 EGLR 153

Lillis v North West Water Ltd [1999] RVR 12.

Kammins Ballroom Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850

Williams v Blaenau Gwent County Borough Council (No.2) [1999] 2 EGLR 195

Appearances: Nicholas Nardecchia, instructed by Messrs Morgan Cole, Solicitors of Cardiff for the Claimant

Milwyn Jarman, instructed by Carole Anne John, Head of Legal Services, Neath Port Talbot County Borough Council for the Acquiring Authority


 


DECISION ON PRELIMINARY ISSUES

Introduction

1. This is a decision on two preliminary issues that arise on a claim for compensation for the compulsory acquisition of land at Cadoxton Road, Neath. The reference was stated to relate to 1.2 acres of land, but it is now accepted on behalf of the claimant that it should relate to 0.4661 acre of land and an easement for the construction and maintenance of a viaduct on 0.3326 acre, which were acquired, along with other parcels of land, by the acquiring authority's predecessor, West Glamorgan County Council, under the County of West Glamorgan (Neath Inner Urban Bypass) Compulsory Purchase Order 1986. The claimant is the successor in title to Mecalec Engineering Co Ltd, who were served with notice to treat on 22 January 1987 and later went into receivership. The acquiring authority subsequently accepted Llanelec as claimant. Neath Port Talbot County Borough Council succeeded to the County Council's functions on 1 April 1996.
2. West Glamorgan County Council served notice of entry on Mecalec and entered on the land on 25 February 1987. They constructed a viaduct from a new roundabout on Cadoxton Road southwards over the A465 and the river Neath to an area called Fair Field, which was thereby opened up for development. The works were completed in 1989.
3. There were negotiations on compensation during the period 1988 to 1990, but these appear to have come to nothing, principally because the County Council did not accept that Llanelec were entitled to any compensation for disturbance. Negotiations resumed in 1992, and they reached a point at which the County Council's officers were offering to recommend £28,000 including £5,000 for disturbance, and Llanelec's surveyor Mr Ieuan Jones asking for £40,000 including the £5,000 for disturbance. In May 1993, Mr W J John, a director of Llanelec instructed Mr Jones to accept the £28,000 and on 24 May 1993 he accordingly wrote to the County Council to that effect. The County Council approved the terms, and from August 1993 to 1 March 1995 the County Council's solicitor and Llanelec's solicitors, Morgan Bruce, were in correspondence about the grant of easements across the land in respect of certain existing pipes belonging to British Gas and the Welsh Water Authority. The first of the two principal matters in dispute is whether the agreement on the £28,000 compensation resulted in an enforceable contract.
4. The second principal matter arises if there was no contract. In Hillingdon London Borough Council v ARC Ltd [1999] Ch 139 the Court of Appeal held that section 9 of the Limitation Act 1980 applied to references to the Lands Tribunal under the Land Compensation Act 1961. The limitation period expired in the present case on 23 February 1993, 6 years after entry. The reference to this Tribunal was not made by the claimant until 13 January 2000, nearly 13 years after the date on which, in terms of section 9, the cause of action accrued, and nearly 7 years after the expiry of the limitation period.
5. The acquiring authority have taken the limitation point. The claimant, however, says that the authority is estopped from relying on limitation. Mr Nicholas Nardecchia, for the claimant, submitted that an estoppel by convention arose from a shared assumption that the 6 year period of limitation did not apply and negotiations between the parties on the basis of this assumption, and that it would be unjust and unconscionable to allow the authority to go back on this shared assumption. He also put the case on the basis of promissory estoppel or waiver. Whether the claim is statute-barred is the second preliminary issue that now arises for decision.
6. Evidence on the factual issues was called on both sides. Mr Nardecchia called three witnesses, Courtney John, managing director of the claimant company, Ieuan Jones FRICS, the chartered surveyor who acted for the claimant up to July 1993, and Brian Williams, a tax consultant employed by Morgan Cole, who, previously under the name Morgan Bruce, have acted throughout as the claimant's solicitors. For the acquiring authority Mr Milwyn Jarman called Lucia Thomas, Senior Legal Officer with West Glamorgan County Council up to 31 March 1996; Ian Ritchie, Senior Valuer with the County Council up to 31 March 1996; Katrin Roberts, solicitor with Neath Port Talbot County Borough Council; Iorwerth Harding Griffiths BSc(Est Man), FRICS, Property Manager for the Borough Council; Gareth John Nutt, Head of Estate and Architectural Services for the Borough Council; and David Arthur Phillips Rees, Senior Development Solicitor to the Borough Council.

Whether there is an enforceable agreement

7. On the first issue, Mr Nardecchia advanced three arguments. The first was that, contrary to the assertion of the acquiring authority, there was no concluded agreement. This requires a consideration of the correspondence passing between the claimant's agents and the County Council. Secondly he said that, if there was an agreement, it was subject to contract and accordingly not binding. On this he relied on a letter said to have been sent to the County Council on 16 June 1992 by Mr Ieuan Jones, the surveyor acting for the claimant at that time. Mr Nardecchia's third argument was that, if there was an agreement, it was not enforceable because there was no document sufficient to satisfy the terms of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.
8. Leaving aside for the moment the disputed letter of 16 June 1992, the correspondence starts with a letter of 18 June 1992 from Mr Jones to the Legal Department of West Glamorgan County Council. The letter said -

"I have been advised by my client's solicitors Messrs Morgan Bruce, Swansea to recontact you in relation to submitting a claim for compensation for the above site."

Mr Jones enclosed a claim, which was expressed to be for -

"...firstly the total amount of land blighted by acquisition or easements such as under the bridge, secondly for severance and injurious affection and thirdly disturbance ...."

The total claim was £78,000.

9. Three months later, on 16 September 1992, the council not having replied to the letter, Mr Jones had a meeting with Mr Ian Ritchie, a valuer with the County Council, but they failed to make any progress towards an agreement. Mr Jones followed this up with a letter dated 24 September 1992, which addressed the question of disturbance, on which Mr Ritchie had said that he required to be satisfied. On 14 October 1992 Mr Ritchie replied. He referred to the question of disturbance saying that he would recommend, on a without prejudice basis, a payment for disturbance of £5,000; and then he said:

"To summarise, I am prepared to recommend my Council to acquire the Interests previously under discussion, as detailed below for the sum of £28,000.00 in full and final settlement of all Heads of Claim.

(a) Acquisition of Freehold Interest with Vacant Possession in 0.4661 acres or thereabouts of land.

(b) Easement in Fee Simple over 0.3326 acres of thereabouts for the construction and future maintenance of the viaduct together with access over the re-aligned access track."

10. Mr Jones replied on 20 October 1992 saying that he and his clients were grateful for the disturbance offer, but he asked that settlement should be agreed at £40,000 "on an under all heads of claim basis, together with my clients properly incurred legal costs, my fee under the 1991 Ryde's Scale and interest." In response to this letter Mr Ritchie wrote on 28 October 1992, saying that he was not persuaded to reconsider his offer, which he considered to be very fair and reasonable. He said that the offer should be regarded as a package which was dependent upon acceptance of the offers under disturbance and the other heads of claim.
11. Mr Jones wrote to the council on 2 November 1992, saying:

"Thank you for your letter dated 28 October 1992 the contents of which are noted. I confirm my clients are now taking legal advice in relation to a Lands Tribunal Appeal.

Please note that our offer to settle at £40,000 (forty thousand pounds) is 'without prejudice save as costs'."

This letter brought to an end that particular phase of the correspondence.

12. Some 6 months later, on 17 May 1993, Mr W L John, a director of Llanelec, wrote to Mr Jones instructing him to accept the council's offer, and on 24 May 1993, Mr Jones wrote to the council, saying:

"I have today received written confirmation from my client, Llanelec Precision Engineering Company Ltd of Cadoxton, that they are prepared to accept the sum of £28,000 (twenty-eight thousand pounds) in full and final settlement of all heads of claim for ...

A. Acquisition of the freehold interest with vacant possession being 0.4661 acres or there about of land.

B. Easement in feesimple over 0.326 acres or thereabouts for the construction and future maintenance of the viaduct together with access over the rear lined access track."

He gave the name of his client's solicitor.

13. Mr Ritchie replied:

"I refer to your letter of the 24th May, 1993 in respect of the above and note your client's agreement to the terms tentatively agreed by us in respect of this matter.

I shall seek the necessary approval of my Council at the next meeting of the Property Services Sub Committee to be held on 2nd July 1993 and shall instruct the County Secretary to proceed with the legal documentation with a request that the transaction be expedited.

Before I progress this matter further however, I should be grateful if you will clarify the area of easement to be 0.3326 acres as I believe the area in your letter has been inadvertently typed as 0.326 acres. Similarly references to the 'rear lined' access track should I am sure you will agree be 'realigned' access track."

14. Pausing there, it is clear that Mr Ritchie, who conducted the correspondence on behalf of the Assistant Director - Estates, Mr J A Howells, did not have the authority to enter into agreement with Llanelec. Approval of the Council was required. That had indeed been clear from his letter of 14 October 1992, in which he said that he was "prepared to recommend my Council" to acquire the land for £28,000 in full and final settlement. There was not, therefore, at this stage any concluded agreement, and I reject Mr Jarman's submission that there was. What there was, however, was an unequivocal acceptance on the part both of claimant (for whom Mr Ieuan Jones had express authority) and the relevant officer of the Council that the compensation for the compulsory acquisition should be £28,000 in full and final settlement of all heads of claim. Formally, there was an offer from the claimant of these terms and it required acceptance by resolution of the council.
15. On 16 June 1993 Morgan Bruce wrote to the council, saying:

"I understand, on a without prejudice basis, that my clients are close to reaching settlement with the Council in respect of the compulsory purchase compensation on their land at Neath.

In consequence, I am in the process of calculating the fees which we have incurred through establishing the company's right to a claim for disturbance ..."

They asserted that they had a right to reclaim their fees. The letter was headed "Without Prejudice", the only letter since the resumption of negotiations in Mr Ieuan Jones's letter of 18 June 1992 to be so headed. It is clear that the insertion of the words reflected the new matter which Morgan Bruce were raising - their own fees. In the event the question of the fees was not pursued beyond this letter and Mr Nardecchia did not suggest that any significance attached to this matter.

16. On 2 July 1993 the council resolved to approve the terms that had been agreed, and on 2 August 1993 the County Secretary wrote to Morgan Bruce as follows:

"NEATH INNER URBAN BY-PASS

LLANELEC PRECISION ENGINEERING COMPANY LIMITED TO

WEST GLAMORGAN COUNTY COUNCIL

I understand you act on behalf of the above mentioned company, in the sale of approximately 0.661 acres or thereabouts of land, shown coloured pink on the plan, together with a Grant of an Easement over the land shown coloured blue on the plan.

My Council has agreed to carry out the following accommodation works:-

1. The realignment of the access track and footway to the site, as constructed.

2. The adjustment of any services affected by the scheme.

3. The making good of disturbed surfaces.

Statutory interest will be payable upon the consideration of £28,000 and the Agents Fee of £575.25, from the date of entry which is 25th February 1987.

The Easement is required over the land covered blue to construct and maintain the Neath Viaduct together with access over the realigned access track.

I would be grateful therefore if you could now deduce title to your client's land. I await hearing from you."

(The area stated in the first paragraph (0.661 acres) was plainly a typing error for 0.4661 acres, and nothing turns on this.)

17. In the light of the previous correspondence it was clearly implicit in this letter that the council had approved the terms that had been agreed, and at that point, in my judgment, there was a concluded agreement between the claimant and the council. The subject-matter of agreement - the land and the easement identified in the compulsory purchase order and the notice to treat - was clear, and the £28,000 was agreed as being in full and final settlement of all heads of claim in respect of the compulsory acquisition of these interests.
18. Following the council's letter, there was some desultory correspondence on easements for pipes, owned by British Gas and Welsh Water, which ran through the land. They needed to be property located on a plan and formally provided for. In addition Morgan Bruce prepared a draft contract, but no significance attaches to this, in my view. Mrs Lucia Thomas, the solicitor who had the conduct of the matter for the council, said in evidence that claimants' solicitors often prepared draft contracts, but these were never executed by the council as to do so was unnecessary and would involve obtaining a committee resolution. Instead the practice was to move straight to a transfer.
19. Mr Nardecchia's second argument on the first issue was that, if agreement was reached in 1993 on compensation of £28,000, this was on the basis that such agreement was "subject to contract" and was thus not enforceable. He referred to Munton v GLC [1976] 1 WLR 649, Sherbrooke v Dipple (1980) 41 P & CR 173 and Cohen v Nessdale [1982] 2 All ER 97. The foundation of his argument was what purported to be the copy of a letter dated 16 June 1993. The letter, like a letter of 12 May 1992 from Morgan Bruce and the letter of 18 June 1992 from Mr Jones, was addressed to Mr Toghill of West Glamorgan County council and bore the same reference as those letters. It was in these terms:

"RE: Llanelec Engineering, Cadoxton Road, Neath (Neath Inner Urban Bypass)

I have been instructed by the above to act on their behalf regarding compensation for the above scheme.

Full details of the amount of land taken is not yet available but I hope to contact you soon with a written claim.

All negotiations are on a Without Prejudice basis and any compensation sums agreed are subject to formal contract."

The council have always maintained that there was no such letter on their files. Mr Ian Ritchie said in evidence that he had never seen it on the file, although all the other letters to which reference was made were there.

20. There are a number of surprising features about the letter. It was dated 2 days before the letter from Mr Jones to Mr Toghill on 18 June, which began in this way:

"I have been advised by my client's solicitors Messrs Morgan Bruce, Swansea to recontact you in relation to submitting a claim for compensation for the above site."

There had been a lapse of over 7 months from the date of the last letter from Morgan Bruce to the council about the acquisition, and the reference to recontacting, one would have thought, carried the implication that there had been no contact since then. There was no reference in the letter of 18 June, or any later letter, to the letter of 16 June. There was no evident need to write the letter of 16 June. It required no action or response on the part of Mr Toghill. There was no urgency, requiring Mr Toghill to gear himself up for an immediate response once a claim had been submitted. The letter was in a very different format from the other letters from Ieuan Jones & Co, each of which shows a consistency of layout. The typeface is different. Mr Jones said that this was because at that time they had a number of typewriters in addition to their wordprocessors, and it was possible that at the time there were two part-time secretaries, one of whom might have typed the letter. His practice was to dictate or to write letters and, once they had been typed, he would sign them and leave them for a secretary to post. He said that he was certain the letter was sent.

21. Mr Jones described the letter of 16 June 1993 as "the standard type of letter that I sent whenever I was instructed in CPO matters." Mr Courtney John said that Mr Jones told him that everything that left his office was marked "subject to contract". In a letter dated 31 December 1997, Mr Williams wrote to Mr Gareth Nutt, the Borough Council's Assistant Director, Estates:

"Since our meeting on 12th December 1997 I have met with Ieuan Jones and explained to him that you have been unable to trace a copy of his letter of 16th June 1992. He stated that it was his practice to send such a letter in CPO cases and he is adamant that the letter was sent in this case. If necessary he will testify to this effect at the appropriate hearing."

Mr Ritchie, however, who said that he had had other dealings with Mr Jones, said that Mr Jones did not invariably use the words subject to contract, and he had never had a letter from Mr Jones or anyone else like that of 16 June 1993 saying at the outset that all negotiations were subject to contract and without prejudice. During the earlier negotiations in 1989, one letter from Mr Jones dated 21 August 1989 was headed "Subject to Contract" and two others, dated 24 August 1989 and 6 September 1989, were headed "Without Prejudice". None of the letters from Mr Jones from 18 June 1992 onwards contained either of these headings, but the letter of 2 November 1992 contained a final sentence saying, "Please note that our offer to settle at £40,000 (forty thousand pounds) is 'without prejudice save as to costs'."

22. It is clear that Mr Jones had no consistent practice in using the words "Subject to Contract" and "Without Prejudice", and I am satisfied, in the light of the features about it that I have mentioned above, that the letter dated 16 June 1992 was in fact written not then but at some later time when the question whether there was an enforceable contract had become a live issue. I am in any event satisfied that it was not received by the authority until a copy was provided to it in 1996 or 1997. The agreement on the £28,000 was thus not subject to contract but was an enforceable agreement.
23. Mr Nardecchia's third argument was that there was no enforceable agreement because there was no document sufficient to satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Subjection (1) of that section provides:

"A contract for the sale or other disposition of an interest in land an only be made in writing and only by incorporating all the terms which the parties have expressly agree in one document or, where contracts are exchanged in each."

Subsection (8) provides:

"Section 40 of the Law of Property Act 1925 (which is superseded by this section shall cease to have effect."

Section 40(1) of the Law of Property Act 1925 was in these terms:

"No action may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto by him lawfully authorised."

Thus, whereas formerly it was sufficient if there was some memorandum or note of the contract, under section 2 there must be a document incorporating all the terms agreed by the parties.

24. In Munton v GLC [1976] 1 WLR 649, the Court of Appeal held that section 40 of the 1925 Act did not apply to the statutory contract that arose where, on the compulsory acquisition of land, notice to treat had been served and the parties had agreed on the price. Having referred to certain authorities Lord Denning MR said at 653 A-C:

"Once therefore a notice to treat has been served and there is an agreement on the price, a binding obligation is created which is equivalent to a contract between the parties. But I do not think this obligation is a contract such as to require the observance of section 40 of the Law of Property Act 1925. It is not an ordinary contract but a statutory contract which is not within the Act of 1925. That appears from Pollard v Middlesex County Council (1906) 95 LT 870 when Parker J said at p.871:

'It is quite true that statutory agreements arising out of notices to treat are not within the Statute of Frauds, and that oral evidence of them may therefore be admitted; ...'

This is followed in practice. Very rarely do the parties enter into an actual contract in writing. The local authority serves a notice to treat. There is agreement on the price. Then the matter is completed by the conveyance and payment of the money."

25. Immediately before this passage Lord Denning MR had referred to Mercer v Liverpool, St Helen's and South Lancashire Railway [1903] 1 KB 652, [1904] AC 461, and Harding v Metropolitan Railway Co (1872) 7 Ch App 154, and Mr Nardecchia submitted that neither of these authorities decided the point in Munton. They do not, and Lord Denning MR was not suggesting that they did. They establish the particular nature of the statutory contract that arises on a compulsory acquisition, and it was on the basis of this nature that the distinction was made between such a contract and an ordinary contract. There is no inconsistency between those two decisions and the conclusion in Munton.
26. Mr Nardecchia's principal argument was that the provisions of section 2 of the 1989 Act were so greatly different from those of section 40 that the decision in Munton v GLC had no application to this later provision. He pointed that section 2(5) contained certain express exceptions (short leases, sales by public auction and contracts regulated under the Financial Services Act 1986), and he argued that, since statutory contracts arising on the compulsory acquisition of land were not referred to as exceptions, they must be taken to be subject to section 2. I cannot accept his submissions. Section 2(1) is performing the same role as section 40(1), which it replaces, although it contains different requirements. Parliament must be assumed to have been aware of the decision in Munton v GLC, and if it had been intended that section, unlike its predecessor, should apply to contracts arising on the compulsory acquisition of land, this would have been stated in the section. The distinction drawn in Munton v GLC between the statutory contract and the ordinary contract applies just as clearly, in my judgment, in relation to section 2 as to its predecessor provision. There was no reason to include such statutory contracts within the exceptions in subsection (5) for the simple reason that they were not, on decided authority, contracts to which such a provision as section 2 applied. By contrast the exception in subsection (5) are types of ordinary contract (to use Lord Denning MR's term) to which, in the absence of this exclusion, subsection (1) would have applied.

Limitation and estoppel

27. Whether as the claimant argues the council are estopped from raising the limitation defence falls to be considered in the light of the evidence relating to this issue, and I now turn to this.
28. Mr John said that the land acquired was approximately 1.2 acres: that the acquiring authority had in fact taken more land than the 0.4661 acre and the easement over 0.3326 acre identified in the CPO. The council had thus taken more land than they should have done. Mr Jones had probably not measured it when he negotiated on the compensation. In 1993, the directors of Llanelec decided that, in view of the costs of Llanelec were likely to incur if the matter were referred to the Lands Tribunal, they should accept the council's offer of £28,000 as compensation. At that time Llanelec did not have the funds to pursue the matter further.
29. In 1994 Mr John became concerned about the amount of compensation that was to be paid for the company's land in view of certain transactions he had heard about relating to other land in the vicinity. Also Llanelec was at that stage in a better financial position. He therefore instructed Morgan Cole, Llanelec's solicitors, to re-open negotiations with the council. In addition to the question of the compensation, Llanelec were also concerned to purchase a small area of land at Cadoxton from the council. A deal on this was struck in 1996. At meetings with the council in 1996, Mr John had challenged them to say how they could justify a price of £23,000 for his land when they were seeking £175,000 for a similar area of land that he wished to buy from them. He denied that the council had insisted that there was a binding agreement. They simply refused to shift from the £23,000. He thought this was unfair: if the council's land was worth £175,000, his was worth at least that.
30. Mr Jones referred to the negotiation of 1988-89 and 1992-93, with which I have already dealt so far as is material. He said that he always understood Mr Howell's approach to be that, if the council made an offer which you did not like, you could go to the Lands Tribunal. For his part he always tried to settle matters in negotiation, aware that, if agreement could not be reached, there was the Lands Tribunal. He thought that the council's attitude was the same as his.
31. Mr Williams said that he first became involved with Llanelec in 1994 because on one occasion, when the director of a company in the Tarmac Group, he led negotiations to buy land for a road widening scheme with a landowner who claimed that the principle in Stokes v Cambridge applied in his case. It was because of this experience that he was brought in to seek to re-negotiate the compensation for Llanelec. Having investigated what the increase might be in the development value of the land opened up by the new bridge and the cost of the works, and having read the decisions in the cases of Stokes v Cambridge and Batchelor v Kent, he concluded that Llanelec could claim a substantial amount on the basis that their land constituted a ransom strip. He therefore wrote to the council on 7 April 1995 requesting a meeting to discuss the matter.
32. Initially the council refused to have a meeting, saying in a letter of 21 July 1995 that there was a binding contract. After that he had various telephone conversations with officers, and eventually the council agreed to a meeting, which took place on 10 October 1996. He was not present, but on the day before he had spoken on the telephone to Mr Graham James, the head of the Estates Department, who had said that the purpose of the meeting was to do a deal. During 1996 there were discussions between Llanelec on other matters, including the stopping up of an access road which provided one of the two access to Llanelec's site, and the purchase by Llanelec of land from the council to add to their holding in order to make the site attractive to a developer. Mr Williams said that he had suggested to Llanelec that they should try to combine the issues of compensation and the purchase of land from the council in order to get a higher price than had been offered.
33. Mr Williams said that he attended meetings between Llanelec and officers of the council on 4 November 1996, 10 June 1997, 12 December 1997 and 2 March 1999. At every meeting the officers said that there was a binding contract, but they were still prepared to talk. At the meeting of 2 March 1999, which had been agreed to be without prejudice, he raised the question whether the council would offer something between the £23,000 at which it had valued the land and the £293,000 which was his own valuation. Mr Harding Griffiths had then said that it would be difficult to increase the figure over £40,000, and Mr Nutt had said only that they might offer more on the steps of the court.
34. Lucia Thomas was employed by West Glamorgan County Council as Senior Legal Officer between 1 March 1994 and 31 March 1996. From July 1993 she dealt on the council's behalf with Morgan Bruce, Llanelec's solicitors, in relation to the land compulsorily acquired. She wrote to them on 2 August 1993 asking them to deduce title to the land, and there followed an exchange of correspondence. Easements in favour of British Gas and Welsh Water delayed progress. There was never any suggestion that the compensation was in any way in dispute, and in 1995 she received from Morgan Bruce a draft agreement stating the agreed compensation of £28,000 and drafts of the easements and title of Llanelec to the land.
35. Ian Ritchie was employed from 4 January 1983 to 30 September 1989 as Valuer, and from then until 31 March 1996 as Senior Valuer, with West Glamorgan County Council. From about July 1992 he was involved with negotiations on the compensation payable for Llanelec's land, and he met and corresponded and spoke on the telephone with Mr Ieuan Jones. Following the letter of Mr Jones of 24 May 1993 confirming the acceptance of the council's offer of £28,000, he reported to the council's Property Services Committee who, on 2 July 1993, approved the terms agreed. On 15 July 1993 he passed instruction over to the Legal Services Department to complete the transaction. When, in April 1995, he received a memo from the legal section attaching a copy of the letter of 7 April 1995 from Morgan Bruce, he was amazed. As far as he was concerned negotiations had concluded in June 1993 and there was a binding contract. The letter mentioned reference to the Lands Tribunal. At no time during his negotiation was any mention made of any extension of time in order to apply to the Lands Tribunal or for negotiation to continue beyond any time limit. In cross-examination he agreed that his attitude was to seek, if possible, to reach agreement, and, only if it was impossible, to refer the matter to the Lands Tribunal. He agreed that this was an almost invariable approach. At no time did he indicate that a reference to the Lands Tribunal was impossible or would not be entertained by the council.
36. Katrin Roberts was an articled clerk with Neath Port Talbot County Borough Council from September 1994 to October 1996 and has been employed as a solicitor by the council since January 1997. She said she first became involved with Llanelec in July 1996 when David Rees, Senior Solicitor with the council, took her to a meeting on 18 July 1996 with Mr Williams, Mr John and Mr John's brother. She understood that the purpose of the meeting was to listed to Llanelec's representations, and she recorded these in a note. The principal matter covered by the note was the question of Llanelec's purchasing land from the council for an access. It recorded that Llanelec said that they would settle the issue of compensation if the council sold the land required for access at a reasonable price.
37. Iorwerth Harding Griffiths BSc(Est Man), FRICS, said that he had over 30 years experience in property matters and had been employed as Property Manager by Neath Port Talbot County Borough Council since 1 April 1996. He said that he was present at the meeting with Mr Courtney John on 10 October 1996, at which Mr John set forth his views at great length. Mr John made points about a proposed access, which were new to him, and mentioned the deal on £23,000, which he, Mr John, was unhappy about. Mr Griffiths said that he made clear that he was not prepared to set the agreement aside. He said that he attended a meeting on 4 November 1996 with Llanelec's representatives. Also present were David Rees, Senior Development Solicitor and Graham James, Senior Valuer. At that meeting and at subsequent meetings on 19 December 1996, 10 June 1997 and 12 December 1997, the council always made clear their view that there was a binding contract. A note of the meeting of 4 November 1996 included under the heading "Llanelec's views", "3.CPO there is no time limit and there is no agreement on price which is not subject to contract," but he could not recall whether any of the council's officers had said anything about a time limit. In cross-examination he said that it did not seem to him to have any relevance. He was asked about a without prejudice meeting that had taken place on 2 March 1999. He said that discussions concerned the level of a sealed offer if the matter went to the Lands Tribunal. He had said that it was likely that the council would not make a sealed offer in excess of £40,000. His purpose was to make clear that Mr John could not expect a significant increase. He regarded the claim as frivolous, and as a valuer he thought Mr William's views were entirely off-beam.
38. Gareth John Nutt has held the post of Head of Estate and Architectural Services for Neath Port Talbot County Borough Council since 1996. He said that he had met Mr Williams on two or three occasions, be he had not kept a record of all the meetings because Mr Williams had described them as being off the record. His recollection was that Mr William had said that the council should consider re-opening negotiations because that would be less costly for them than if Llanelec referred the matter to the Lands Tribunal, but the authority's stance was that the question of compensation had been settled. He was referred to Mr William's note of the meeting of 2 November 1996, which recorded, "There was considerable discussion about the action CJ might take to cause embarrassment to the council," and he said in cross-examination that there was an indication that there could be some sort of campaign to embarrass the authority, so that if they had refused to meet this would have been used against the authority.
39. David Arthur Phillips Rees is a solicitor with over 30 years experience in conveyancing and property matters. Since 1 April 1996 he has been employed as Senior Development Solicitor to Neath Port Talbot County Borough Council. He said that the was asked in about July 1996 by his assistant Mrs Thomas to take over the conveyancing of the land being acquired from Llanelec because of disputes about the company's dealings with the council. He was contacted on the telephone by Mr Williams, and a meeting was arranged for 18 July 1996. At that meeting Mr Rees listened to the company's points. The central issue seemed to be that Llanelec needed access across Council land in order to sell part of their site for development purposes. They were aggrieved at the way in which the CPO had been conducted and felt that they had been deprived of their previous access rights. The council were now valuing the proposed access on a "ransom" basis which did not reflect the basis for the CPO compensation. Although Llanelec felt entitled to claim compensation for land included in the CPO based on the case of Stokes v Cambridge they stated that they were prepared to be reasonable and would not argue with the valuation that had been reached under the CPO procedure if the Council were prepared to give the necessary easements free of charge. Mr Rees thought that the access road easement and the CPO were two distinct matters which could not be merged but that they could look into the background in greater detail.
40. On 4 November 1996 Mr Rees attended a meeting at Llanelec's premises with Mr Harding Griffiths and Mr Graham James and he said that he well recollected that it was agreed that the CPO compensation should be dealt with as a separate issue and that the access should be the immediate focus of attention. There was a further meeting on 19 December 1996 at Port Talbot Civic Centre organised by Mrs Carole John in response to continued pressure by Mr Courtney John for a settlement of both the access road easement and the CPO in a combined deal. This proposal was once again rejected and the Council's officers insisted that the access rights should be acquired at market value. Ultimately terms were agreed for the sale to Llanelec of piece of land the necessary access easements and the issue regarding the CPO compensation was left in abeyance as far as Mr Rees was concerned until the sale and access right formalities had been concluded. It was only then that Mr Williams requested a meeting between himself and Mr Nutt with respective Legal Advisers. That meeting took place on 12 December 1997 and Mr Rees stated his firm view at that meeting that the negotiations on the CPO compensation were closed as far as the council were concerned. That view had been maintained consistently ever since as, Mr Rees said, the correspondence showed.
41. The law relating to estoppel, and in particular estoppel by convention, where an acquiring authority seek to rely on a limitation defence in resisting a claim for compensation, has recently been reviewed by the Court of Appeal in London Borough of Hillingdon v ARC Ltd (No.2) (16 June 2000, unreported). The issue in that case (as here) was whether discussions outside the limitation period between the claimants and the acquiring authority had given rise to an estoppel. The Court of Appeal, reversing the decision of the judge at first instance, held that they had not. The two key passages, for the purposes of the present case are to be found in the judgment of the court, which was delivered by Arden J:

"57. ...no authority has cited to us, apart from the decision of the judge in this case, whereby a party has been held disentitled from relying on a limitation defence merely because he has continued to negotiate with another party about the claim after the limitation period has expired and without anything being agreed about the manner in which the claim was to be resolved if negotiations broke down. What was happening here was that the parties were negotiating without any regard to the limitation period....

62. A shared assumption is not on the authorities sufficient to establish an estoppel unless it is communicated. It follows that if in this case there was no shared assumption to the effect that ARC had a valid claim that was not time-barred, there could be no communication by LBH that it was making any such assumption. It also follows from what we have said above that the communication required would in any event be not simply that ARC had a valid claim but also that LBH would not take any defence that might be open to it on the basis of a statutory limitation period."

42. Thus for the parties simply to negotiate without regard to the limitation period will not be sufficient to found an estoppel. What the claimant has to show is that there was a shared assumption that there was a valid claim and that the acquiring authority would not take any defence that might be open to it on the basis of statutory limitation period. Furthermore this shared assumption must have been communicated between the parties.
43. Mr Nardecchia relied on Co-operative Wholesale Society v Chester-le-Street District Council [1996] 46 EGLR 158, [1998] 38 EGLR 153, and on Lillis v North West Water Ltd [1999] RVR 12. In the Co-operative Society case the Court of Appeal upheld a decision of this Tribunal (Judge Marder QC, President) that on the evidence both parties to a compensation claim had proceeded on the basis of a common assumption that they were negotiating a valid claim for compensation without regard to the statutory limitation period and that it would be unconscionable to allow the acquiring authority to rely on the limitation period. In Lillis the Tribunal (Mr P H Clarke FRICS) decided the case on the following basis (at 18):

"Throughout the six year period from the date of entry by the company, which expired in February 1997, some four months before the initial decision in Hillingdon, it was thought to be the law that limitation did not apply to a reference to the Lands Tribunal to determine compensation on compulsory acquisition (except under the general vesting declaration procedure). It is axiomatic therefore that, unless there is evidence to the contrary, both parties must have been negotiating on the assumption that limitation did not arise. In my view it is not necessary to show that the parties actually considered limitation and reached a common assumption that it did not apply. It is not necessary for the claimant to show that the company actually considered the question of limitation during that six year period and decided not to raise it. In my view, it is sufficient that both parties, by their conduct in not raising the matter, treated limitation as irrelevant. The truth is, I am sure, that it did not enter the minds of the parties and their advisers at any time until Hillingdon was decided in June 1997. If they had thought about limitation it would have been to conclude that it simply did not arise until compensation had been quantified. It was irrelevant before compensation had been agreed or determined. I cannot accept counsel for the company's argument that because limitation was not considered by either party, it cannot have been a common assumption underlying the negotiations. It was an assumption held by both parties (even if only held subconsciously) and became a common assumption in their negotiations."

44. This decision, though not inconsistent with the Co-operative Society case, which preceded it and to which it made reference, is now in my judgment clearly at odds with the law as recently stated by the Court of Appeal in Hillingdon (No 2) in the passages that I have quoted above. In particular, in the light of that decision, it is indeed necessary for the party seeking to establish an estoppel to show that the parties actually considered limitation and reached a common assumption that it did not apply. There is moreover no rule that they must be assumed to have been negotiating on the basis that limitation did not arise.
45. In the present case the limitation period expired on 25 February 1993, 6 years after entry. On 2 November 1992, Mr Jones had written to Mr Ritchie:

"Thank you for your letter dated 28 October 1992 the contents of which are noted. I confirm my clients are now taking legal advice in relation to a Lands Tribunal Appeal.

Please note that our offer to settle at £40,000 (forty thousand pounds) is 'without prejudice save as to costs'."

The next communication was a telephone call from Mr Jones to Mr Ritchie on 10 May 1993, when Mr Jones said that he had a letter that was ready to be sent about accepting the council's offer. On 24 May 1993, by which time Mr Jones had received written instructions from Mr W J John to accept the offer, Mr Jones wrote the letter conveying the acceptance.

46. Mr Jones said, with reference to his letter of 2 November 1992 that he always tried to settle matters by negotiation, aware that, if agreement could not be reached, there was the Lands Tribunal. He said that Mr Howells, the Assistant Director of Property Services with the county council, with whom he had conducted the negotiations in 1989 and who was Mr Ritchie 's superior, always stated that, if you did not like an offer that was made, you could go to the Lands Tribunal, and Mr Ritchie also had the same approach. Mr Ritchie agreed in cross-examination that his attitude was to seek agreement if possible and, only if it was impossible, to refer the matter to the Lands Tribunal: that that approach was at the back of his mind in the present case; and that at no time did he indicate that a reference to the Lands Tribunal was not possible or would not be entertained by the council.
47. This evidence, in my judgment, falls well short of establishing that, up to the conclusion of negotiations in August 1993, the parties were acting on the basis of a shared assumption, communicated between them, that they were negotiating on a valid claim which could be referred to the Lands Tribunal and that the council would not take a defence based on statutory limitation. The evidence establishes no more than that, up to August 1993, the parties were negotiating without any regard to the limitation period. There is no evidence that the reference to "a Lands Tribunal Appeal" in Mr Jones's letter of 2 November 1992 (nearly four months before the limitation period expired on 25 February 1993) coloured the negotiations that resumed in May 1993. This seems to me to be the essential difference, in this respect, between the present case and the Co-operative Society case, in which discussions and correspondence between the valuers, some days before the limitation period was due to expire, clearly coloured the negotiations that were carried on afterwards: see, in the decision of the President, Judge Marder QC, [1996] 2 EGLR 143 at 144E, 144M and 147M-148A. There was no communication at all between Mr Jones and Mr Ritchie on the question of referring the matter to the Lands Tribunal outside the limitation period; and the mere fact that negotiations continued after the 6 years had elapsed is insufficient. I am in any event not satisfied that the parties - by which I mean the parties and their advisers - shared the same assumption on the question whether there was a limitation period and, if so, whether the council would eschew the limitation defence. It is to be noted that Mr Williams said in cross-examination that Rosemary Morgan, of Morgan Bruce, the claimant's solicitors, who had conduct of the case from July 1994 (or perhaps slightly earlier), had mentioned to him some time before the meeting of 4 November 1996 that there might be a 6 year time limit.
48. If there was no basis for an estoppel by convention up to August 1993, there was certainly none between then and 7 April 1995, when Morgan Bruce's letter sought to reactivate the question of compensation. During that period the parties were acting on the basis that compensation had been agreed and the formalities of transfer fell to be completed. Nor, in my judgment was there any basis for an estoppel by convention after 7 April 1995. The letter had been prompted by Mr Williams's reading of the decisions in Stokes v Cambridge and Batchelor v Kent CC. It sought an enhanced amount of compensation and the suggestion was made that the parties should, if necessary, agree a timetable for referring the matter to the Lands Tribunal. The council eventually replied to that letter on 21 July 1995 in these terms:

"Thank you for your letter dated 18 July 1995. With regard to your letter dated 13 April 1995, firstly the terms in relation to this transaction have been finalised by both parties and since the acquisition of the interest required for the Scheme is by way of Compulsory Purchase Order, I believe that there is a binding contract between both parties and that the transaction must proceed in accordance with the terms already agreed.

Secondly, the principle is established in both cases referred to has never been of relevance in relation to this case and I see no basis whatsoever, 'No Scheme World' where the value of the vendor's land could have contributed to an increase due to prospective ransom or hope value.

In the circumstances therefore, the suggestion for a meeting to consider enhancement in value is totally inappropriate and it is entirely a matter for your clients as to whether they wish to pursue this matter at a Lands Tribunal."

49. After that, although there were a number of meetings, arranged at the request of the claimants, I am satisfied that the council's officers (both before and after reorganisation) never deviated from their assertion that there was an enforceable contract. Mr Williams said that at every meeting the officer said that there was a binding contract. Why then, the claimants asked, did they agree to these meetings if there was nothing to discuss? On the evidence, I find that there were three reasons. In the first place, during 1996 and 1997 Llanelec were negotiating to buy land from the council. (It was what Mr John saw as an extortionate price being demanded by the council that made him angry about the amount of compensation for the land that had been acquired from his firm.) Mr Williams and Mr John sought at these meetings to combine the two matters, but I am satisfied that the council's officers always insisted that they be kept separate. Secondly, Mr Nutt said, and I accept, that the officers were concerned that there might be some sort of campaign to embarrass the authority if they had refused to meet Llanelec, with things being said to the press or to the local Member of Parliament. In fact Mr John did have a meeting in 1999 with the local MP, who subsequently wrote to a councillor on his behalf. Thirdly, there was the simple fact that there was a dispute about whether there was an enforceable contract and, from August 1998, whether in any event a claim for compensation was statute-barred. For the council to seek a negotiated solution to that dispute seems to me understandable and, indeed, commendable. But in seeking a negotiated solution the council was not acknowledging that there was a claim that could be pursued in the Lands Tribunal. Indeed they made clear that if notice of reference was given they would argue that there was a binding contract and, from August 1998, that the claim was statute-barred.
50. It was a cornerstone of Mr Nardecchia's argument on estoppel that, by continuing to insist that there was a binding contract, the council were maintaining that Llanelec had a valid claim. It was this that put the case in line with the Co-operative Society case and distinguished it from Hillingdon. The acceptance of the existence of a valid claim was the basis on which the Co-operative Society case had been distinguished in Hillingdon (No 2) (see para 59 of the judgment). Mr Nardecchia's argument, in my judgment, misses the point. In the Co-operative Society case the finding was that, in negotiating on the amount of compensation, the council were acknowledging that the claimant had a valid claim which, in the absence of agreement, could be determined by the Lands Tribunal. There was acknowledgement that a valid claim existed which could be determined by the Lands Tribunal - and, therefore, that the limitation period for such proceedings did not apply. In the present case the council did not acknowledge in the meetings that were held that the claimant had a claim which could be determined by the Lands Tribunal. On the contrary, their contention was that the claimant had a contractual right to the £28,000 that had been agreed as compensation, so that what had been a valid claim had already been determined by that agreement, with the result that there was no compensation claim for the Lands Tribunal to decide.
51. In my judgment, therefore, the evidence does not establish an estoppel by convention. The same applies to the claimant's contention on waiver and promissory estoppel. Mr Nardecchia referred to Kammins Ballroom Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 and based himself upon Williams v Blaenau Gwent County Borough Council (No.2) [1999] 2 EGLR 195, a decision of this Tribunal (Mr P H Clarke FRICS). In that case, notice to treat, which had been served in August 1975, was withdrawn in May 1977. In June 1977 the claimant made a claim for compensation, but did not give notice of reference to the Lands Tribunal until 11 April 1988. On 21 March 1994 the President (Judge Marder QC) decided a preliminary point in the claimant's favour. In February 1999 the council gave notice that they intended to rely on the limitation defence, the 6-year period having expired in May 1983, but the member held that they could not do so. The decision at first instance in Hillingdon London Borough Council v ARC Ltd was on 12 June 1997, and at that stage the council were fully informed as to their right to rely on the limitation defence; and the member held that the delay of about 18 months before the defence was raised constituted a waiver by the council and gave rise to a promissory estoppel. Mr Nardecchia in seeking to base himself on this decision, argued that, by delaying over a year from the Hillingdon decision until they gave notice on 25 August 1998 that they intended to take the limitation defence, the council had waived their right to do so or alternatively, by continuing with discussions, had created a promissory estoppel.
52. The Blaenau Gwent decision has no bearing on the present case, in my judgment. There, proceedings in the Tribunal had been commenced in April 1988 and had been the subject of a decision on a preliminary issue in March 1994, but the limitation defence was not raised until February 1999. Estoppel and waiver thus arose for consideration in relation to litigation that was actually in progress at the time of the conduct that was said to give rise to them. The only relevance of the decision in Hillingdon, on the approach adopted by the member, was that in his view it prevented a waiver or estoppel from arising before the time of that decision because, until then, the council were not fully informed of their right to raise the limitation defence in the proceedings to which they were a party. In the present case the council raised the limitation defence in these proceedings as soon as the claimant had given notice of reference.
53. It was, as I have said, on 25 August 1998, that the council first stated that it proposed to take the limitation defence. Mr Rees wrote to Morgan Bruce:

"As you know the Council has been reviewing its position over the compensation. The Council has consistently maintained that the figure of £28,000 was a finally agreed and settled figure in 1993 and that is still its view.

In the light of the contents of your letter of 20th May 1998 there would normally be no other prospect of settling the matter other than by reference to the Court. This matter has been running for a considerable time, however, and following the case of Hillingdon London Borough Council -v- A.R.C. Ltd. it seems to me that your clients claim is now statute barred and that the proper course for the Council to pursue is that provided by Section 9 of the Compulsory Purchase Act 1965."

(Section 9 of the Compulsory Purchase Act 1965 provides a procedure by which an acquiring authority can acquire title to the land if the owner refuses to accept compensation that has been agreed. The authority are able to pay the money into court and execute a deed poll vesting the land in themselves.)

54. This was a clear indication on the part of the council that they would rely on the limitation defence. Despite this indication it was not until 13 January 2000 that notice of reference to this Tribunal was given. The effect of the indication that the council would rely on the limitation defence, in my judgment, was that, if no notice of reference was given within a reasonable time thereafter, any estoppel would cease to have effect because it would no longer be unconscionable for the council to rely on limitation: cf Hillingdon (No 2) at para 63. Mr Williams wrote at length on 17 September 1998 in response to the council's letter, but the council did not respond. He wrote again on 25 March 1999, and Mr Rees responded on this occasion (on 1 April 1999) by saying:

"I note your comments with regard to the lack of a substantive response to your letter dated the 17th of September 1998 but I rather assumed that the matter had been overtaken by your letter of the 6th of October 1998 in which it was stated that you would be proceeding with a referral to the Lands Tribunal.

To clarify matters, therefore, the Council's position is that your clients submitted a claim in response to the Notice to Treat upon which there has already been an agreed settlement but in any event the claim is statute barred. Should a reference to the Lands Tribunal be made, the Council will apply for the determination of these points as preliminary issues."

55. Despite this letter, a further 9 months elapsed before reference was made on 13 January 2000 - over 16 months after the council's letter of 25 August 1998. This was far in excess of what was reasonable, in my view (cf Hillingdon (No 2) at para 64). I can see no reason why the reference should not have been made within, at the most, 2 months after 25 August 1998. By 25 March 1999, counsel had been instructed and had advised, but still no reference was made for many months. In these circumstances, assuming, contrary to my earlier conclusions, that there was an estoppel, it is not unconscionable for the council now to rely on limitation.
56. A further relevant consideration on the issue of unconscionability, in my judgment, is the fact that the claimant agreed through Mr Jones, to accept £28,000 in May 1993 after Mr Jones on its behalf had sought a settlement at £40,000, but now, in its notice of reference to this Tribunal, it claims £180,000. The claimant, it appears, has not sought the advice of a qualified valuer since Mr Jones's involvement ceased in July 1993. The basis of the claim which it now seeks to pursue derives from Mr Williams, who is employed as a tax consultant by the solicitors Morgan Cole, and has no qualifications in matters of land valuation, and whose sole contact with the complex field of compensation for compulsory purchase was as the director of a company that was on one occasion seeking to acquire some land that might have been the subject of a CPO. Mr John evidently feels very strongly about two matters. The first is that he thinks that the authority took more land than the CPO allowed them to. That, clearly, is not a matter for these proceedings, and it is not one that is now pursued on behalf of the claimant. Secondly he feels that his land was substantially under-valued, particularly in the light of the price that he had to pay to acquire a similar area of land from the council. There is in my view, however, no self-evident inconsistency between the amount agreed as compensation and the amount that the claimant paid for the land that it bought. Nor was there any self-evident ransom value attaching to the land acquired from Llanelec. In considering whether there was a ransom value, a valuer would no doubt take note of the fact that land in a number of ownerships in addition to that of Llanelec was acquired under the CPO, and he would also consider the application of the Pointe Gourde principle in relation to the scheme underlying the acquisition. I do not think that it would be unjust in these circumstances to deny Llanelec the opportunity to pursue their claim for £180,000.
57. I therefore decide both preliminary issues in favour of the acquiring authority. Compensation was the subject of a binding agreement between the parties in 1993; and the claim is in any event statute-barred under section 9 of the Limitation Act 1980. This decision accordingly disposes of the proceedings. It will take effect as a decision when the question of costs is decided and at that point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and Part 52 of the Civil Procedure Rules will come into operation. The parties are invited to make submissions as to the costs of this reference and a letter accompanying this decision sets out the procedure for submissions in writing.

Dated

George Bartlett QC, President

ADDENDUM ON COSTS

58. The council ask for their costs. The claimant does not oppose this application, but says that they should be limited to costs incurred after date of notice of reference. No point arises on this since any award of costs can only be in respect of those incurred in the proceedings themselves. Accordingly the claimant must pay the acquiring authority's costs in the reference, such costs if not agreed to be the subject of a detailed assessment on the standard basis by the Registrar of the Lands Tribunal.

Dated

George Bartlett QC, President