England and Wales Lands Tribunal

[2000] EWLands LCA_43_1999 (21 March 2000)

LCA/43/1999

LANDS TRIBUNAL ACT 1949

COMPENSATION - limitation of actions - footpath creation order under Highways Act 1980 section 28 - Limitation Act 1980 sections 9 and 39 - estoppel by convention - parties negotiating outside limitation period on basis that claim enforceable - notice given of compensating authority's intention to take limitation point - claim held to be subject to Limitation Act - compensating authority held to be estopped until opportunity given to claimant to make reference - claimant failing to make reference within reasonable time after notice of authority's reliance on Limitation Act - claim dismissed

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN

THE EXECUTORS OF THE ESTATE OF THE Claimants

RIGHT HONOURABLE HERBERT ROBERT CAYZER BARON ROTHERWICK

and

OXFORDSHIRE COUNTY COUNCIL Compensating

Authority

Re: Public footpath through Wychwood Forest

Cornbury Park Estate

Charlbury

Oxfordshire

Before the President

Sitting at 48/49 Chancery Lane

on 31 January 2000 and 1, 2 and 3 February 2000

The following cases are referred to in this decision:

Hillingdon LBC v ARC Ltd [1998] 1 WLR 174; [1999] Ch 139

Pegler v Railway Executive [1948] AC 332

China v Harrow UDC [1954] 1 QB 178

West Riding CC v Huddersfield Corporation [1957] 1 QB 540

Central Electricity Generating Board v Halifax Corporation [1963] AC 785

Re Farmizer (Products) Ltd [1997] 1 BCLC 589

Leivers v Barber Walker & Co Ltd [1943] 1 KB 385.

McCafferty v McAndrews & Co [1930] AC 599

Board of Trade v Cayser Irvine & Co Ltd [1927] AC 610

Sunday Times v UK [1979] 2 EHRR 245

De Geouffre de la Pradelle [1992] A253-B

Bellet v France [1995] A333-B

Stubbings v UK [1996] 23 EHRR 213

Society Levage Prestations v France [1996] 24 EHRR 351

James v UK [1986] 8 EHRR 123

Holy Monasteries v Greece [1994] 20 EHRR 1

Aka v Turkey [1998] VI - no 90 p 2669 ECHR, 23 September 1998

Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] 1 QB 84

K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The "August Leonhardt") [1985] 2 LLR 28

Norwegian American Cruises A/S v Paul Mundy Ltd (The "Vistafjord") [1988] 2 LLR 343

John v George and Walton (1995) 71 P & CR 375

Republic of India v India Steamship Co Ltd (No 2) [1988] AC 878

Co-operative Wholesale Society v Chester-le-Street District Council (1996) 73 P & CR 111

Lillis v North West Water Ltd [1999] RVR 12

Williams v Blaenau Gwent County Borough Council [1999] 2 EGLR 195

London Borough of Hillingdon v ARC Ltd (unreported; judgment handed down 30 April 1999)

Wright v John Bagnall and Sons Ltd [1900] QB 240

Hewlett v London County Council (1908) 72 JP 136

Fletcher and Son v Jubb, Booth and Helliwell [1920] 1 KB 275

Credit Suisse v Borough of Allerdale [1995] 1 LLR 315

Western Fish Products Ltd v Penwith DC [1981] 2 All ER 204

Robin Purchas QC instructed by Messrs Morgan Cole for the claimants

James Goudie QC and Martin Wood instructed by Mr H R Perkins, Joint Head of Legal Services, Oxfordshire County Council, for the compensating authority


 


DECISION ON A PRELIMINARY ISSUE

1. This reference concerns a claim for compensation under section 28 of the Highways Act 1980 following the creation of a footpath under the Oxfordshire County Council Public Path Creation Order 1988/Wychwood Forest. The path runs across land owned by the claimants. The order was confirmed on 21 November 1988 and came into effect on 19 December 1988. The claim for compensation was made to the compensating authority on 15 June 1989. It amounted to £1,568,700 and related to losses in respect of forestry, game shooting and estate management and to depreciation in the Cornbury Park Estate. In March 1999 the claim was amended to £1,120,000 plus professional fees.
2. On 8 April 1999, over 10 years after the order came into effect, the claimants gave notice of reference to this Tribunal under section 307 of the Highways Act 1980. The compensating authority say that the claim is statute-barred under section 9 of the Limitation Act 1980. Two questions are raised in the preliminary issue that now falls to be determined: firstly, whether the claim is indeed statute-barred; and, secondly, whether the compensating authority should be estopped from relying upon the limitation.
3. Section 28 of the Highways Act 1980 provides as follows:

"(1) Subject to the following provisions of this section, if, on a claim made in accordance with this section, it is shown that the value of an interest of a person in land is depreciated, or that a person has suffered damage by being disturbed in his enjoyment of land, in consequence of the coming into operation of a public path creation order, the authority by whom the order was made shall pay to that person compensation equal to the amount of the depreciation or damage.

(2) A claim for compensation under this section shall be made within such time and in such manner as may be prescribed by regulations made by the Secretary of State, and shall be made to the authority by whom the order was made."

4. The Public Paths Orders etc Regulations 1983 provided by regulation 16 that a claim for compensation should be made in writing and served within 6 months of the coming into operation of the order.
5. Section 307(1) of the Highways Act 1980 provided (as originally enacted) as follows:

"(1) Any dispute arising on a claim for compensation under any provision of this Act to which this section applies shall be determined by the Lands Tribunal.

The provisions of this Act to which this section applies are sections 21, 22, 28, 73, 74, 109, 110, 121(2), 126, 193, 200(2) and 292."

The references to sections 193 and 299(2) have now been repealed.

6. Section 9 of the Limitation Act 1980 provides:

"(1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued."

And section 39 (so far as material) provides:

"This Act shall not apply to any action or arbitration for which a period of limitation is prescribed by or under any other enactment (whether passed before or after the passing of this Act) ...".

7. In Hillingdon LBC v ARC Ltd [1999] Ch 139 the Court of Appeal had to determine whether a claim for compensation where land had been compulsorily acquired pursuant to a notice to treat was subject to section 9(1). It held, affirming the decision of Mr Stanley Burnton QC, sitting as a deputy judge of the Chancery Division ([1998] 1 WLR 174), that the section did apply to such a claim. Giving the principal judgment, Potter LJ (with whom Nourse and Mummery LJJ agreed) identified the issue as follows (at 147):

"13. It is not in issue between the parties that the compensation, if any, to which the defendant may be entitled is a 'sum recoverable by virtue of any enactment' under section 9(1) of the Act of 1980.

14. There is also no dispute that, subject to the limitation point, the defendant is entitled to be compensated for the taking of its land pursuant to the compulsory purchase order, notice to treat and notice of entry. Whilst none of the relevant statutory provisions explicitly confers the right to compensation, that right is assumed, or to be inferred, from the terms of sections 6, 7, 11(1) and 11(4) of the Act of 1965, which refer variously to compensation being 'paid', 'agreed' or 'awarded'. Finally it is not disputed that both the council and the defendant were entitled, in the event that the amount of compensation was not agreed, to have the disputed compensation referred to the Lands Tribunal for quantification under section 1 of the Land Compensation Act 1961 and section 6 of the Act of 1965. The rival submissions are directed to the question whether, as the council contends, that right of the defendant itself amounts to a cause of action for the purposes of the Act of 1980 (reference by the defendant to the Lands Tribunal in default of agreement in term amounting to 'an action to recover any sum recoverable by virtue of any enactment') or whether, as the defendant contends, the cause of action does not arise unless or until the sum is quantified by agreement or decision of the Lands Tribunal."

8. At 150 Potter LJ said:

"25. It seems to me that a number of authorities make clear that, for the purposes of limitation, a cause of action may accrue for 'any sum recoverable by virtue of any enactment' although that sum has yet to be quantified by some process of agreement or adjudication."

9. He referred to Pegler v Railway Executive [1948] AC 332, China v Harrow UDC [1954] 1 QB 178, West Riding CC v Huddersfield Corporation [1957] 1 QB 540, Central Electricity Generating Board v Halifax Corporation [1963] AC 785 and In re Farmizer (Products) Ltd [1997] 1 BCLC 589. He went on (at 153):

"33. I would adopt the approach of Lord Goddard C.J. in West Riding County Council v Huddersfield Corporation [1957] 1 QB 540. I consider that, when the realities of the position are looked at in a case of this kind, the right to compensation which arises as at the date of entry of the acquiring authority is an immediate right which, in the absence of agreement (as to which there is no obligation upon the parties), can only be enforced at the suit of the claimant by initiating proceedings to quantify the sum due; that, in turn, can only be done by the Lands Tribunal, just as it must be done by an arbitrator in other statutory contexts. While the exercise may be simply one of quantification, it is in reality an action to recover a sum of money, namely the amount of the compensation due as assessed by the Lands Tribunal.

34. In substance and effect the proceedings do not differ in any essential manner from any other kind of proceedings in which a claim is made on the party liable, liability is admitted or otherwise established, and proceedings follow when quantum cannot be agreed. Thus, the right or cause of action which arises on entry by the authority may properly be characterised as a right to be paid such compensation as may be agreed or assessed by the Lands Tribunal. To treat the date of agreement or assessment as definitive of the point at which the claimant's cause of action arises seems to me to revive by the back door a distinction between debt, damages and other causes of action for statutory sums which section 2 of the Limitation Act 1939 and section 9 of the Act of 1980 were intended to eliminate for the purposes of the law of limitation."

10. Potter LJ then specifically considered whether section 9(1) applies to references to the Lands Tribunal, and on this he concluded as follows:

"41. It seems clear to me that the Lands Tribunal has judicial rather than essentially administrative characteristics. As the judge observed, it has judicial powers and functions within a specialised and defined jurisdiction for the purpose of resolving disputes involving the valuation of interests in land. It also has procedural rules appropriate to a court of law. Further, in this context, it determines the amount of the liability of an acquiring authority. Because it is designated as a tribunal under the supervision of the Council on Tribunals by Schedule 1 to the Tribunals and Inquiries Act 1992, it can hardly be regarded as one of the 'ordinary courts of law' referred to in section 1(1)(b) of that Act. However, because the width of the definition of 'action' in section 38 of the Act of 1980, in which the qualification 'ordinary' is not applied to 'court of law', I too consider that the Lands Tribunal is a court of law for the purposes of the Act of 1980.

42. That being so, it seems to me that it is appropriate to regard a reference to the Lands Tribunal by a claimant for the purposes of resolving a question of disputed compensation as an 'action to recover' that compensation within the meaning of section 9(1). The alternative is to regard it as no more than a procedural step required in order to quantify the sum to be recovered by an action before an 'ordinary' court of law. That seems to me both cumbersome and unnecessary. Nor, in my view, does any contrary argument arise on consideration of the procedure and powers of the Lands Tribunal as set out in its procedural rules, the Lands Tribunal Rules 1975 and the Lands Tribunal Rules 1996."

11. Mr Robin Purchas QC for the claimants accepted that this decision was binding on the Lands Tribunal, although he reserved the right to contend on appeal that it was wrongly decided. He submitted that it was distinguishable on the basis of the terms of the particular statutory provisions applicable in the present case, sections 28 and 307 of the Highways Act 1980. He drew attention to the following matters. Firstly, he said, the obligation on the authority to pay compensation does not arise on the making of the public path creation order but only "if, on a claim made in accordance with this section, it is shown that the value of an interest of a person in land is depreciated..." Furthermore, the timing of and other requirements for a claim under the section are specifically dealt with by regulations under the statute, and in particular by regulation 16 of the 1983 Regulations which provides that the claim should be made within a period of six months. The role of the Lands Tribunal under section 307(1) is not in itself to determine the compensation to be paid. It is to determine "any dispute arising on a claim for compensation" under, among other provisions, section 28. The dispute may go to the whole or part of the claim on which depreciation or damage sought to be demonstrated in accordance with the section. Finally, by virtue of rule 16 of the Lands Tribunal Rules 1975 either party could have referred any matter of dispute in accordance with Section 307(1) of the Act to the Lands Tribunal.
12. Mr Purchas submitted that the particular form of compensation provision, which, as he contended, only gives rise to a right of compensation if a claim is made within the requisite period, was deliberately adopted by Parliament for the purposes of footpath creation orders (and footpath stopping up, diversion and extinguishment orders under sections 118 - 121 of the Highways Act 1980). He pointed out that the provisions were re-enactments of the provisions in the National Parks and Access to the Countryside Act 1949 and that the formulation was similar to that used in the Town and Country Planning Act 1947 section 22(1) (dealing with the revocation and modification of planning permission) and section 20(1) (dealing with the refusal of planning permission for Third Schedule development). All those provisions were similar, he said, to those which, a relatively short time previously, in 1943, had been considered by the Court of Appeal in Leivers v Barber Walker & Co Ltd [1943] 1 KB 385.
13. Leivers related to a claim under the Workman's Compensation Acts 1906 and 1925 by a workman who had been injured in an accident at work in 1913. He was incapacitated for five years and was paid compensation for total incapacity until 1918, when he returned to work. In 1941 he became totally incapacitated as the result of the accident in 1913, and he filed a formal application for arbitration under the 1925 Act. Under section 14(1) of the Act proceedings for the recovery under the Act of compensation for an injury were not maintainable unless a claim for compensation had been made within 6 months of the accident. Evidently a claim had been made within that period since compensation had been paid between 1913 and 1918. The question in the appeal was whether the proceedings brought by the workman were statute-barred under section 2 of the Limitation Act 1939, or whether that provision did not apply in view of section 32 of the Act, which, in similar terms to section 39 of the 1980 Act, excluded from the limitation provisions "any action or arbitration for which a period is prescribed by any other enactment." By a majority the court held that section 32 applied so as to exclude the operation of section 2. At 399-400 du Parcq LJ said:

"... in an Act which, in Lord Halsbury's words in Powell v Main Colliery Co, to which Scott LJ has referred, 'deliberately and designedly avoided anything like technology,' it is not, I think, surprising to find the legislature drawing no distinction between a claim which is the first step in proceedings and a claim which must be made before proceedings can be brought. In language which is plainly intelligible, Parliament has effectively prescribed a period of limitation. It has not used technical language, or language which a lawyer might have been expected to choose, and I do not overlook the fact that in McCafferty v McAndrews & Co Ltd, both Lord Warrington and Lord Thankerton say that the section in the Act of 1925 which reproduces section 2, subsection 1, of the Act of 1906 (I am quoting from Lord Thankerton's speech) 'does not limit the time within which the proceedings under the Act are to be brought,' but 'lays down two conditions precedent to such proceedings.' These observations (if I may respectfully say so) are, of course, a correct statement of the effect of the section in precise legal language. They do not, however, in my opinion, detract from the force of the argument that the language used by the legislature clearly indicates that it intended the Workmen's Compensation Act to be regarded as an enactment prescribing a period of limitation."

14. In view of this decision, it was right, Mr Purchas said, to treat proceedings under the provisions in the 1947 and 1949 Acts (and their later re-enactments) as excluded from the operation of section 9 of the 1980 Act. He relied also on McCafferty v McAndrews & Co [1930] AC 599 and on Board of Trade v Cayser Irvine & Co Ltd [1927] AC 610 which, he said, confirmed the importance of the condition precedent in this context.
15. Mr Purchas further relied on the European Convention on Human Rights, in particular Article 1 of the First Protocol and Article 6. By Article 1 of the First Protocol, he said, the claimants and their predecessor in title were entitled to peaceful enjoyment of their possessions and not to be deprived of those possessions except in the public interest and subject to the conditions provided for by law and the general principles of international law. Under Article 6, in the determination of the claimants' civil rights and obligations, they were entitled to a fair hearing. In considering whether any interference was in accordance with law any legal limitation on the right to a fair hearing should be sufficiently precise and definite as to enable the claimants to have foreseen with reasonable certainty what would be the consequence of their action or inaction. He referred to Sunday Times v UK [1979] 2 EHRR 245, para 49, De Geouffre de la Pradelle [1992] A253-B para 33-34; Bellet v France [1995] A333-B para 36-37; Stubbings v UK [1996] 23 EHRR 213 para 53-54; and Society Levage Prestations v France [1996] 24 EHRR 351 para 40/44.
16. In the present case, said Mr Purchas, both the compensating authority and the claimants and their respective advisers believed, as did the profession generally, at all material times that the Limitation Act did not apply to a claim for compensation in these circumstances. Moreover, the claimants here complied with the specific time limit provided under the Regulations for making a claim within six months. In the circumstances to construe the statute so as to deprive these claimants of a fair hearing would be disproportionate and unfair. Moreover it would result in the claimants being deprived of their peaceful enjoyment of their possessions and dispossessed without compensation in a manner that would be disproportionate and unjustified. He referred to James v UK [1986] 8 EHRR 123 para 51; Holy Monasteries v Greece [1994] 20 EHRR 1 para 70/71 and Aka v Turkey [1998] VI - no 90 p 2669 ECHR, 23 September 1998, para 44/45.
17. In my judgment the decision in Leivers, on which so much of Mr Purchas's argument depends, is of no assistance in determining whether section 39 applies to claim for compensation under section 28 of the Highways Act 1980. The subject-matter of the Workmen's Compensation Acts on the one hand and the subject-matter of the footpath provisions in the National Park and access to the Countryside Act 1949 on the other are so manifestly different that the way that the Limitation Act operated in relation to one is of no assistance in deciding how it operates in relation to the other. The majority in Leivers were at pains to point out that the Workmen's Compensation Acts were, as Scott LJ put it at 389, "a self-contained code, intended primarily to be worked by agreement and without lawyers." That, as it seems to me, is what du Parcq LJ was in essence saying in the passage I have quoted; and Scott LJ at 389-390 identified the "specific and appropriate protection ..... given by the Workmen's Compensation Acts to parties which rendered unnecessary any assistance from statutes of limitation."
18. It does not seem to me, on any realistic approach to the scheme of the provisions of the Highways Act, that the prescription of a 6-month period within which a claim is to be made is intended to operate so as to exclude the Limitation Act limitations. Mr Purchas suggested that under section 28 it is the making of a claim that gives rise to the right of compensation rather than the exercise by the authority of their statutory powers (as was held to be the case in Hillingdon). He said that this feature distinguishes footpath creation, diversion and extinguishment orders from the other procedures in the Highways Act 1980 for which compensation is provided under section 307. In my judgment, however, the requirement under section 28 that a claim should be made is properly to be regarded as procedural only. The entitlement to compensation arises in respect of the damage suffered by reason of the making of the order, and the requirement that a claim should be made is no more than a step on the way to the establishment of what, if anything, that compensation should amount to.
19. Under section 39 of the Limitation Act 1980 the Act is disapplied where "any action or arbitration for which a period of limitation is prescribed by or under any other enactment." It follows from what I have just said that I do not think that the prescription of the 6-month period within which a claim is to be made is the prescription of a period of limitation for an action within the meaning of section 39. The action is the reference of the Lands Tribunal of the claim for compensation and not the making of the claim. In the light of Hillingdon the right of action is the entitlement to compensation and not the power to make the claim.
20. In my judgment the reasons for the decision in Hillingdon apply equally where the claim for compensation arises under section 28. For this reason, while I see considerable force in the arguments advanced by Mr Purchas on the European Convention on Human Rights that I have recorded above, they are not arguments which can affect my decision in the present case. As Mr Goudie submitted, it was for the Court of Appeal to refer to the Convention if it thought that it was necessary to do so for the purpose of construing the legislation. It did not do so. For the purposes of determining the issue in the present case I can see no ground for distinguishing Hillingdon either in relation to the application of the Convention or in any other respect.
21. Evidence was given for the claimants by Richard Frederick Drew FRICS, FAAV, a partner with Carter Jonas, and Jonathan Peter Kennedy BSc, FRICS, of Clegg Kennedy Drew, land agents. Mr Drew said that between 1990 and 1992, when he was a partner in the firm of Humberts, he acted as the agent to the Cornbury Park Estate. When he became agent in 1990 he took over responsibility for the footpath claim. Prior to that his colleagues, Mr Kennedy and Harry Clegg, had handled the claim and had already been in communication with Miles Tuely of Cluttons, who was instructed on behalf of Oxfordshire. Mr Kennedy resumed responsibility for handling the claim in 1994. Mr Drew said that he indicated his interest in the matter to Mr Tuely in a letter of 6 April 1990, and Mr Tuely responded on 10 April 1990 listing information he required, in particular the position of the drives and high seats, and the number of birds and deer killed. Mr Drew did not provide the information sought until over a year later, when he wrote to Mr Tuely on 8 May 1991. They had a meeting on 3 July 1991, and after further correspondence Mr Tuely wrote to Mr Drew on 30 September 1991 in a letter dealing in some detail with the three elements of the claim - game shooting, forestry operations, and the privacy and seclusion of the estate. Mr Tuely ended by saying:

"We clearly have profound differences of opinion on the validity of your claim. Unless you are prepared to reduce some aspects and eliminate others, we shall be unable to agree a compromise. We certainly do not seek a hearing at the Lands Tribunal, but that is your choice."

22. On 29 November 1991, by which time Mr Drew had moved to his new firm, Mr Tuely wrote asking whether he could respond in the near future to his letter. Mr Tuely wrote again on 1 October 1992, and on 19 October 1992 Mr Tuely wrote to say that if Mr Drew had no evidence to support his claim, it might be a waste of time to meet.
23. Mr Drew said that throughout he, and, he believed, Mr Tuely, sought to negotiate the claim without reference to the Lands Tribunal. That was the normal practice in his profession. Certainly no one in the profession at that time thought that there was any statutory limitation applying to references to the Lands Tribunal. It was suggested to him in cross-examination that he had no reason to suppose that, if there was a statutory limitation period, it would not be relied on, and he replied that the question of limitation was never raised.
24. Mr Kennedy said that he assumed responsibility in January 1990 for the compensation claim on behalf of Lord Rotherwick, which had been prepared by Harry Clegg of Humberts and submitted to Oxfordshire on 15 June 1989, but in April 1990 Mr Drew took over the responsibility. Mr Kennedy assumed responsibility again towards the end of 1994. At the end of 1994 and for much of 1995 there were internal discussions on the claimant's side, and at the end of November 1995 he contacted Mr Tuely and they had a meeting on the 8 December 1995. There were further discussions on the telephone, and correspondence also, before he learned in October 1996 that Mr Tuely had left Cluttons. Mr Tuely had told him that during the negotiations that Oxfordshire would prefer a negotiated settlement rather than taking the matter to the Lands Tribunal.
25. On 15 October 1996, Mr Kennedy said, he had a meeting with Ivan Moss of Oxfordshire and Howard Perkins, a county solicitor, was present for most of it. He agreed to provide further information on a without prejudice basis, and both parties recognised that it was sensible to exhaust all attempts to settle the matter without making a reference to the Lands Tribunal. Correspondence (to which I will refer later) over the next year made repeated mention of the possibility of a Lands Tribunal reference. Mr Kennedy referred to correspondence with John Wilby, assistant property officer with Oxfordshire, and with Harry St John of Cluttons, whom Mr Wilby in a letter of 28 February 1997 had said he was instructing to open negotiations with Mr Kennedy. Negotiations with Mr St John continued until a letter dated 12 November 1997 was received from Mr Perkins of Oxfordshire referring to the Hillingdon case and saying that the council would resist any claim on behalf of Lord Rotherwick's estate on the ground that it was statute-barred.
26. Mr Kennedy said that there was no doubt in his mind that until November 1997 both parties were proceeding on the common basis that they should seek to negotiate a settlement before either side referred the matter to the Lands Tribunal. Neither party thought or suggested that the claim was or could be subject to statutory limitation. In cross-examination he was asked why, following the letter of 12 November 1997, the reference had only been made on 8 April 1999 and not many months sooner, and he said: "I can't say."
27. Evidence for the compensating authority was given by Miles Clissold Tuely, MA, FRICS, a director of Savills, and Ivan Andrew Moss, BA, MRTPI, ARICS, who between November 1992 and August 1998 had been the Assistant Property Officer of Oxfordshire County Council. Mr Tuely said that until August 1996 he had been a partner in Cluttons and up to that time he had been personally involved with the claim for compensation following the creation of the footpath through Wychwood Forest. He referred to the correspondence and to the meetings he had had with Humberts in July 1991 and with Mr Kennedy in December 1995 and to further telephone calls with Mr Kennedy. At a meeting on 8 December 1995 Mr Kennedy had said that the estate had reduced their claim to between £250,000 and £400,000, and Mr Tuely had said that the council were prepared to increase their original offer (£25,000), but that they were a long way apart. In a telephone conversation of 2 February 1996, Mr Tuely said that he had mentioned a figure of "£50,000 plus" as a final settlement figure, and following another conversation on 25 April 1996 Mr Kennedy in a letter of 8 May 1996 put forward a figure of £200,000 plus £70,000 costs.
28. Thus, said Mr Tuely, there had been three meetings with representatives of the claimants. At none of these was there any mention of the limitation period applicable to the claim, nor of the operation of the Limitation Act. Those matters were never touched on in the telephone conversations that he had with representatives of the claimant, and they were not mentioned in correspondence. He said that he had no authority to extend any limitation period applicable to the claim. During the 6 years of his involvement very little progress had been made, but this was not due to any lack of action or co-operation on his part. It could be seen that there were lengthy periods of inaction and delay on the part of the claimants.
29. Asked in cross-examination whether it had been his view that the claim had become statute barred in December 1994, Mr Tuely said that he had had no views: he thought it was a legal matter. He said that he had discussed the matter with Mr Moss and that the council were aware that there might be a statutory limitation; but he could not recall at what point prior to his departure in August 1996 that this had been. He never asked what the council's position was on limitation.
30. Mr Moss said that between April 1993 and December 1996 he had day-to-day responsibility for handling the compensation claim. He left the handling of the claim to Mr Tuely, who reported to him on the progress (such as it was) of the negotiations. Between his first involvement in April 1993 and December 1995 the council received no correspondence from the claimants. He could recall that they had no idea whether the claimants were still pursuing their claim. He had met Mr Kennedy on 15 October 1996, but at this, the only meeting he had with the claimants, there was no discussion of the limitation period applicable to the claim or the operation of the Limitation Act. Mr Moss said that he had no authority to extend any limitation period. Such a decision would have required a committee resolution. He certainly had never suggested to Mr Tuely that it was open to him to extend any limitation period.
31. In cross-examination Mr Moss said that he had never previously been involved in a compensation claim. He said that he had discussed the limitation period briefly with Mr Cain, the council's solicitor, and Mr Cain's view had been that no limitation period applied. He, Mr Moss, acted on the basis of that view. His involvement had started because there was a contingent provision in the council budget statement in respect of the claim, and he was asked to check on what was going on. He left it to Mr Tuely to negotiate with the other side. The claim remained a contingent liability.
32. Mr Purchas submitted on the basis of this evidence that an estoppel by convention had arisen. The parties held the common or conventional assumption throughout the period of the negotiations, up to the council's letter of 12 November 1997, that there was no statutory limitation period that applied to the claim other than the 6-months period under section 28 and that the negotiations were carried on in order to avoid proceedings before the Lands Tribunal. It was, he said, plainly a reasonable conclusion to have reached that there was no statutory limitation period, since that was a view that was widely held in the profession. Moreover the council had specifically considered the point in 1996 in the context of the negotiations. Those negotiations on the part of the officers and agents of the council were plainly within their actual and/or ostensible authority. The common assumption and basis for negotiation crossed the line between the parties. The claimants had been prejudiced in that they had been involved in extensive and continuing negotiations, which would never have been undertaken, at least after 1996, unless it was on the basis that any dispute on the claim could be referred to the Lands Tribunal.
33. For the principles of estoppel by convention Mr Purchas relied on Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] 1 QB 84, K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The "August Leonhardt") [1985] 2 LLR 28, Norwegian American Cruises A/S v Paul Mundy Ltd (The "Vistafjord") [1988] 2 LLR 343, John v George and Walton (1995) 71 P & CR 375, and Republic of India v India Steamship Co Ltd (No 2) [1988] AC 878. For the application of the principles in relation to the period of limitation applicable to claims for compensation, he referred to the Lands Tribunal decisions in Co-operative Wholesale Society v Chester-le-Street District Council (1996) 73 P & CR 111, Lillis v North West Water Ltd [1999] RVR 12, Williams v Blaenau Gwent County Borough Council [1999] 2 EGLR 195, and to the High Court decision in London Borough of Hillingdon v ARC Ltd (unreported; judgment handed down 30 April 1999). Mr Purchas also relied on Wright v John Bagnall and Sons Ltd [1900] QB 240, a Workmen's Compensation Act case.
34. For the compensating authority Mr Goudie submitted that estoppel cannot in general be invoked against a local authority, and he relied on Western Fish Products Ltd v Penwith DC [1981] 2 All ER 204. That must, he said, be especially so given the fiduciary duty which a local authority owes to its taxpayers and ratepayers. That duty meant that an authority could not legitimately fail to take a limitation point on a money claim. Alternatively, even if it could decide not to take a limitation point, it could not bind itself not to do so because that would be to fetter its discretion. In any event, however, the council could only be bound by the actions of those authorised for that purpose, and here the council had not given any officer authority to make any representation that the limitation period would be extended. Nor was it part of the ordinary duties of Mr Moss or Mr Tuely to deal with the question of limitation on the council's behalf. The fact that neither party even mentioned limitation until November 1997 was fatal to a reliance on estoppel.
35. Mr Goudie referred to Chitty on Contracts (28th Edition) para 29-114 for the proposition that the fact that the parties have entered into negotiations for the settlement of their dispute will not, without more, suspend or otherwise affect the running of time or prevent the defendant from relying on the statute, even though the limitation period may expire before the negotiations are completed. He referred to Hewlett v London County Council (1908) 72 JP 136, the authority cited in Chitty for this proposition, and to Fletcher and Son v Jubb, Booth and Helliwell [1920] 1 KB 275. Nor, said Mr Goudie, can there be any estoppel if each party were spontaneously to make the same mistake since communication in relation to limitation must pass across the line between the parties. He referred to The August Leonhardt and to Credit Suisse v Borough of Allerdale [1995] 1 LLR 315. On the facts nothing occurred, before or after October 1992, which delayed the expiry (in or by June 1995) of the limitation period, or revived it once it had expired. Even if an estoppel were otherwise capable of arising there was nothing unconscionable in the council insisting on its legal rights.
36. On the evidence I am satisfied that during the period up to Mr Tuely's letter of 19 October 1992, which marked the end of a period of somewhat desultory negotiation, none of those involved considered the question of whether there might be a limitation period that applied to the claim. It may be that, had they considered the matter, Mr Drew, Mr Kennedy and Mr Tuely would have shared the view widespread in the profession that there was no limitation period that applied. This, however, is of no materiality. They did not address the question and I find that it did not affect the conduct of negotiations in any way.
37. From October 1992 to November 1995, when Mr Kennedy contacted Mr Tuely to arrange a meeting, there were no negotiations at all. It was during this period that the 6-year limitation period expired. After the resumption of negotiations it is clear that, at least from 8 May 1996 to 12 November 1997, when the compensating authority asserted for the first time their reliance on the limitation period, the parties were negotiating on the basis that, if the negotiations failed, either of them would be able to refer the matter to the Lands Tribunal. Extracts from a number of letters written during this period make this clear. On 8 May 1996, Mr Kennedy wrote to Mr Tuely:

"I believe we agree it would be sensible, at this stage, to see if any agreement can be reached in principle before embarking further down the route to the Lands Tribunal."

Mr Tuely replied on 14 May 1996:

"The Council would, of course, prefer a negotiated settlement rather than go to the Lands Tribunal despite the existence of the comparables I have quoted to you."

On 27 June 1996 Mr Tuely wrote to Mr Kennedy requesting an explanation of how the claim was calculated and also comparables. He said:

"This is, after all, what you would have to produce in a Lands Tribunal so it must be possible to do it now and it is not unreasonable to ask for it."

38. On 16 October 1996 Mr Kennedy wrote to Mr Tuely saying that certain information would be provided on a without prejudice basis:

"I believe it must be sensible to do this because once we have embarked on a route to the Lands Tribunal there will be little room for negotiation".

Then on 12 December 1996 Mr Kennedy Mr Moss a short note that had been prepared "pursuant to our meeting". He said:

"This is not an amended claim, but is intended purely to assist in reaching a negotiated settlement and without the need to take out a reference with the Lands Tribunal."

39. On 18 June 1997 Mr Kennedy wrote to Mr St John of Cluttons:

"I was assured by the Council that they would prefer to settle than to carry on this outstanding claim and take it to the Lands Tribunal. Our clients have indicated their preference to settle but we are willing to take the claim further if necessary."

On 25 June 1997 Mr St John replied:

"The Council would prefer, like your client, to settle the matter without recourse to the Lands Tribunal."

40. Then, finally, in the last letter before the council gave notice that they would take the limitation point, on 26 September 1997 Mr H R Perkins, the Joint Head of Legal Services, wrote to Mr Kennedy as follows:

"The County Council are advised that it is unlikely that any depreciation in the value of Wychwood Forest in consequence of the making of the Order would be more than minimal. The forest had a broad range of characteristics which would make it attractive in the market place with or without the footpath. The Council reserves the right to call evidence to that effect if the matter proceeds to a hearing before the Lands Tribunal.

The County Council are however prepared to entertain a claim on the basis set out in the attached schedule in order to settle the matter. This gives rise to a provisional figure of £21,152. You will note that under some heads the Council has been obliged to make assumptions. If further evidence is provided it will be considered. If agreement is not possible the County Council will refer the matter to the Lands Tribunal. If that proves necessary the County Council would intend to make an unconditional offer in order to protect their position on costs."

41. Estoppel by convention may arise where both parties to a transaction act on an assumed state of facts or law, the assumption being either shared by them both or made by one and acquiesced in by the other: see Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 at 913E. It is clear from the correspondence that throughout the period up to November 1997 the agents for the claimants and for the council were negotiating on the basis that, if agreement could not be reached, the matter would be referred to the Lands Tribunal. I find on the evidence that Mr Kennedy was of the view that there was no period of limitation that in general applied to the making of a reference to the Lands Tribunal in respect of a claim for compensation, but that he did not consider the question of limitation in relation to this particular claim and did not raise it with the council. Mr Tuely for his part during 1996 was aware that there might be a limitation period, but he regarded it as a legal matter and had no views on it himself. He did not ask the council's officers what the council's position was on limitation. He had no instructions from the council either to take or to waive the limitation point. He did not discuss limitation with Mr Kennedy.
42. Mr Moss, who had never previously been involved in a compensation claim, discussed the question of limitation with Mr Cain, the council's solicitor, and afterwards acted on the basis of the view expressed to him by Mr Cain, that the Limitation Act did not apply to the claim. He had no authority to extend any limitation period.
43. The conclusion I reach from these findings is that those negotiating on either side did so on the basis that they were dealing with a claim for compensation under section 28 that either party might refer to the Lands Tribunal and that the claimant was entitled to enforce. What they were negotiating on was the amount of compensation on a claim which the claimant could enforce, and not some ex gratia payment that the council might choose to make. This was the convention on which those negotiating conducted themselves and on the basis of which the claimants incurred professional fees. There was no convention relating to limitation. Mr Kennedy did not think of it; Mr Tuely thought that there might be a limitation point but that it was not a matter for him; and Mr Moss acted on the basis that no limitation period applied.
44. Whether the convention of those negotiating that they were dealing with an enforceable claim is sufficient to found an estoppel requires consideration of the arguments advanced by Mr Goudie that I have mentioned above. He said, first of all, on the authority of Western Fish Products Ltd v Penwith DC, that an estoppel cannot in general be invoked against a local authority. He accepted, however, that it would be open to a local authority to waive the limitation period once it had expired, and I can see no reason in principle why an authority should be capable of disabling itself from relying on a limitation point by an act amounting to waiver but not through conduct giving rise to an estoppel. I note that in Co-operative Wholesale Society v Chester-le-Street District Council [1998] EG (1996) 73 P & CR 111, a decision of this Tribunal, an authority was held to be estopped from relying on a limitation period, and that decision was upheld in the Court of Appeal, although the argument now advanced by Mr Goudie was not apparently advanced. Similarly the estoppel point in the Hillingdon case was determined in the claimant's favour by Mr R C Pryor QC, sitting as a deputy judge in the Chancery Division (judgment 30 April 1999, unreported), although, again, the point does not seem to have been argued that an estoppel cannot in general be invoked against a local authority.
45. Secondly, Mr Goudie said, a local authority owes a fiduciary duty, and it could not legitimately fail to take a limitation point on a money claim in the absence of some substantial justification. The fiduciary duty which an authority owes is clearly not one that overrides all other considerations when the question of limitation arises, and Mr Goudie did not advance his argument in this way. The fact that he accepted that limitation could be waived was an acceptance that other considerations might legitimately outweigh the duty to conserve the council's funds. In my judgment a concern on the part of a local authority to act fairly in relation to those injured by its acts is capable of overriding its fiduciary duty towards those who provide its funds. I doubt very much that it would be within the powers of the authority to bind itself by contract to renounce for all time a limitation point that is available to it. But to treat a claim as subsisting and capable for the time being of enforcement notwithstanding the expiry of the limitation period is capable, in my view, of being a proper exercise of discretion. By so treating it the authority does not disable itself for all time from taking the limitation point. It may take the point, provided the claimant has sufficient time to take what action is necessary after the authority's change of stance is adopted.
46. The third objection which Mr Goudie raises to the creation of an estoppel relates to authority. He says that neither the officers nor Mr Tuely had any authority to waive the limitation period on the council's behalf. Such authority could only arise through resolution of the council. There is, however, no suggestion that the council's officers did not have authority to continue negotiations on the claim outside the limitation period. The officers, and through them Mr Tuely, thus had authority to negotiate the claim, and their ostensible authority, in my judgment, was to negotiate a claim which was enforceable at law.
47. Mr Goudie relied, as I have noted, on Hewlett v London County Council for the proposition set out in Chitty that the fact that the parties have entered into negotiations for the settlement of their dispute will not, without more, suspend or otherwise affect the running of time or prevent the defendant from relying on the statute, even though the limitation period may expire before the negotiations are completed. Hewlett was a personal injuries action in which the defendants pleaded the 6-month limitation period in section 1 of the Public Authorities Protection Act 1893. Within the 6-month period negotiations in correspondence were entered into between the plaintiff's solicitors and the defendants and these negotiations continued after the period had expired. Counsel for the plaintiff, Mr Marshall KC, submitted that the defendants were estopped from setting up the Act. Bray J left the following question to the jury:

"Did the defendants so conduct themselves as to lead the plaintiff to believe that they were prepared to entertain the payment of reasonable compensation on the particulars being furnished, and in that way lead the plaintiff or her solicitor to postpone the commencement of this action?"

48. The jury answered the question in the affirmative. Bray J then said:

"That is not sufficient to debar the defendants from setting up the Public Authorities Protection Act 1893. The question suggested by Mr Marshall and put to the jury was the only one that could have been put on the evidence, for it is clear that during the six months the solicitor never had the Act in mind at all. The question should have been, though I should not have put it to the jury, 'Was the plaintiff's solicitor led to believe that the council would not rely upon the Act?'"

49. The law on estoppel has advanced considerably since 1908, but in any event the facts in the present case seem to me to be clearly distinguishable from those in Hewlett. Here agents of the parties continued to negotiate after the end of the limitation period on the expressly stated convention that either party could refer the matter to the Lands Tribunal, and the necessary inference from this is that they were negotiating on the basis that there was an enforceable claim.
50. The remaining question is whether as a result of the convention upon which the parties proceeded it would be unconscionable to allow the council to rely on the Limitation Act. The essence of the convention, as I have said, was that at the time negotiations were proceeding, there was an enforceable claim that either party might refer to the Lands Tribunal. There was no convention relating to limitation, but, equally, there was no implication that the council would never take any limitation point. However fairness demands, in my view, that where there is a change of stance on the authority's part from one of acceptance that there is an enforceable claim to one of denial, the claimant must be given a reasonable time to make a reference to the Tribunal. What time is reasonable must depend on all the circumstances of the case; but, once the authority have indicated that they intend to rely on the Limitation Act, if the claimant then fails to make a reference to the Tribunal promptly it is unlikely that it would be unfair to allow the limitation point to be taken. The claimant will have had a reasonable opportunity to make a reference.
51. In the present case there was a delay of 17 months between Oxfordshire's letter of 12 November 1997, in which they said that they would resist any claim on the ground that it was statute-barred, and the making of the reference on 8 April 1999. No explanation for this delay was put forward in evidence, and Mr Kennedy, when asked in cross-examination why a reference had not been made many months sooner, simply replied: "I can't say." Mr Purchas submitted that it was responsible behaviour on the claimant's part to take advice on the applicability of the Hillingdon case before making a reference. The claimants' solicitors wrote to the council on 27 May 1998 to say that advice had been taken, and that the advice was that Hillingdon did not apply and the claim was not statute-barred; and to ask the council to confirm that the claim was not statute-barred. The council replied on 9 June 1998 saying that they could not give the confirmation that was sought. Mr Purchas said that the actual delay was therefore the 10 months June 1998 to April 1999. No prejudice to the council arose from the delay, and the delay should, he said, be considered in the light of the conduct of the council up until June 1998. There had been no hint of any urgency on their part to refer the matter to the Tribunal.
52. In my judgment it would not be unfair or unconscionable to permit the council to rely on the Limitation Act. Following the council's letter of 12 November 1997, it took 6½ months for the claimants to take advice about Hillingdon and to write to the council about it. It is to be noted that the letter written by the claimants' solicitors on 27 May 1998, in which they set out their views following consultation with counsel, came shortly after the Court of Appeal decision in Hillingdon (judgments in which were handed down on 7 April 1998), but it was not suggested that the delay of 6½ months was because the claimants' advisers were awaiting the outcome of the appeal in that case. After the letter of 27 May 1998 there was the further 10 months delay before the reference was made. The basis of the limitation of actions is the public policy in avoiding the litigation of stale claims; and the prejudice to the council from the delay in this case is of no different order from that affecting defendants generally. They were subjected to the uncertainty of a very substantial claim and made contingent provision to meet it, and the longer the delay the greater the prejudice on that account. They could themselves have referred the matter to this Tribunal, but I do not think that they can be criticised for preferring to wait in order to see whether the claimants would modify further a claim which seemed to those acting for the council to be greatly exaggerated.
53. The preliminary point is decided, therefore, in favour of the compensating authority. The claim is statute-barred. 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 Order 61 rule 1(1) 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

(Signed) George Bartlett QC, President

ADDENDUM ON COSTS

The respondent's application for costs is not opposed by the claimants. The claimants will pay the respondent's costs of the reference. Such costs, if not agreed, will be the subject of a detailed assessment on the standard basis by the Registrar of the Lands Tribunal in accordance with Rule 44.4 and Rule 44.7 of the Civil Procedure Rules. The procedure laid down in Rule 52 of the Lands Tribunal Rules 1996 will apply to such detailed assessment.

DATED

George Bartlett QC, President