England and Wales Lands Tribunal

[2001] EWLands LCA_41_2001 (29 August 2001)

LCA/41/2001

LANDS TRIBUNAL ACT 1949

COMPENSATION – Pipe-laying works – disturbance losses suffered by farmer – relevance of previous settlements – compensation awarded £320 plus surveyors fee – Water Industry Act 1991, Schedule 12

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN A J and M DAVIES Claimants

and

HYDER Plc Compensating

(formerly Welsh Water) Authority

Re: Agricultural land,

North West of Llwynifan Farm,

Pentrefelin, Cellan,

Lampeter,

Ceredigion, SA48 8JD

Before: N J Rose FRICS

Sitting at Ammanford Magistrates' Court, Margaret Street,

Ammanford, Carmarthenshire, SA18 2NP

on

21 June 2001

Mr Horace Ogden, of Ogden & Jewell Ltd, Wayleave Consultants and Claims Brokers, of Lampeter, for the Claimants with leave of the Tribunal.

Mr Lloyd Thomas of Rees Richards & Partners, Chartered Surveyors, Land & Estate Agents of Swansea, for the Compensating Authority with leave of the Tribunal.


 


DECISION

1. This is a reference to determine the compensation payable to A J and M Davies (the claimants) under Schedule 12 of the Water Industry Act 1991 (the Act) for loss or damage caused by pipe-laying works on the claimants' land at Llwynifan Farm, Pentrefelin, Cellan, Lampeter. The works were carried out as part of the Cellan/Lanfair Water Main Improvement, Lampeter, by Hyder Plc, formerly Welsh Water (the compensating authority).
2. It was agreed between the parties that the simplified procedure provided for in rule 28 of the Lands Tribunal Rules 1996 would apply to this appeal. Mr H Ogden of Ogden & Jewell Ltd, wayleave consultants and claims brokers of Lampeter appeared for the claimants with leave of the Tribunal and gave evidence. Mr D L Thomas of Rees Richards and Partners, chartered surveyors, land and estate agents of Swansea appeared for the compensating authority with leave of the Tribunal and gave evidence.
3. From the evidence I find the following facts. The works in question involved inserting a new water pipe within the existing larger diameter pipe – a process known as "slip lining". Excavations were carried out to expose the existing main at intervals and the new pipe was inserted by mechanical means. Eight excavations were undertaken on the claimants' land over a two day period in August 2000. Each excavation occupied an area of approximately 2 square metres and was back-filled in accordance with the industry's code of practice, leaving some surface restoration necessary at each location. The claimants were provided with a bag of seed to enable them to carry out any necessary re-seeding.
4. Paragraph 2 of Schedule 12 of the Act provides as follows:

"(1) If the value of any interest in any relevant land is depreciated by virtue of the exercise, by any relevant undertaker, of any power to carry out pipe-laying works on private land, the person entitled to that interest shall be entitled to compensation from the undertaker of an amount equal to the amount of the depreciation.

(2) Where the person entitled to an interest in any relevant land sustains loss or damage which –

(a) is attributable to the exercise by any relevant undertaker of any power to carry out pipe-laying works on private land;

(b) does not consist in depreciation of the value of that interest; and

(c) is loss or damage for which he would have been entitled to compensation by way of compensation for disturbance, if his interest in that land had been compulsorily acquired under section 155 of this Act,

he shall be entitled to compensation from the undertaker in respect of that loss or damage, in addition to compensation under sub-paragraph (1) …

5. By paragraph 3 (1)

"Any question of disputed compensation under paragraph 2 above shall be referred to and determined by the Lands Tribunal; and in relation to the determination of any such compensation the provisions of sections 2 and 4 of the Land Compensation Act 1961 shall apply, subject to any necessary modifications."

6. It is agreed that the claimants are not entitled to compensation under paragraph 2(1), since any deprecation in the value of their land occurred when the original pipe-laying works took place. They are, however, entitled to compensation pursuant to paragraph 2(2) for any loss or damage which resulted from the latest slip lining works. Such compensation is to be calculated in accordance with the normal rules for assessing disturbance compensation on the compulsory acquisition of land. The damage caused to the claimants' land has been agreed in the sum of £200. The dispute relates to the compensation payable for other losses caused by the works. Mr Ogden assesses this compensation at £1,600, whereas Mr Thomas's figure is £120.
7. Mr Ogden said that the agreed compensation figure for damage was based on the actual damage caused by the eight excavations and did not include the work involved in re-seeding. He referred to seven cases where his firm had claimed compensation for disturbance caused by the compensating authority and where compensation had been agreed based on approximately £150 per pit. That basis had been used consistently over a period of years. It should be increased in the present case to reflect inflation and the fact that a large number of pits had been dug on the claimants' land, justifying a premium. He also referred to a recent case where another firm had obtained £150 per trial pit from the Severn Trent Water Authority.
8. In cross-examination Mr Ogden said that compensation for disturbance should cover the stress and anxiety caused to farmers when strangers – acting on behalf of a profit-making body – entered their land. He agreed that each case should be considered on its own merits. He also agreed that his comparable settlements related to burst water mains and that there was a difference between the degree of disturbance in such cases and that resulting from lining an existing pipe. He did not agree, however, with the difference in compensation for the two activities that was being suggested by the compensating authority. He had no records showing the time spent by the claimants as a result of the works, nor were there any records of consequential losses which had been suffered.
9. Mr Thomas denied that the compensating authority had adopted a practice of applying a standard rate of compensation based upon the number of excavations. He explained that his total estimate of the losses sustained by the claimants was £120. Of this figure, £50 related to possible lost profits, even though Mr Ogden had agreed that these were negligible. The balance of £70 reflected time spent by the claimants in dealing with the works. This would have involved receiving the statutory notice and consulting with the land agent and the contractors. He estimated the amount of time spent on these matters would have been six hours, which he quantified at £11 per hour, making a total of £66, say £70. The hourly rate of £11 was arrived at by taking the highest rate of pay for any farm worker in the Farm Management Handbook.
10. In this case, the claimants are claiming compensation for losses suffered as a result of works carried out on their land. It is the claimants' responsibility to prove the amount of those losses and the fact that the compensating authority is a profit-making body is not relevant to the exercise.
11. The only evidence produced by Mr Ogden in support of his computed claim consisted of eight previous compensation settlements. In answer to a question from me, it emerged that he had only dealt with one of those negotiations himself. Consequently, he was unable to describe the extent of the losses that had been suffered by the remaining seven claimants. A reliable comparison between the compensation agreed in those cases and that appropriate in the instant case is therefore not possible.
12. The only settlement which Mr Ogden had negotiated himself related to a burst main on land belonging to a Mr Beaumont at Penuwch, Tregaron. There it was necessary for the compensating authority to carry out excavation works on two occasions and the total compensation agreed in January 2001 was £300. Mr Ogden said that the amount of damage caused to Mr Beaumont's land was the same as that suffered by the claimants, although Mr Beaumont was probably not supplied with seeds.
13. Compensation for damage to the claimants' land has been agreed at £200. Since, unlike the claimants, Mr Beaumont was not supplied with seeds and since the damage was the same in both cases it follows that at least £200 out of the total payment to Mr Beaumont represented damage and a maximum of £100 related to time spent and other losses. Mr Beaumont had to deal with the compensating authority in respect of excavation works on two occasions, compared with one in the claimants' case. Moreover, there is no evidence that the claimants have sustained any real losses as a result of the works. In those circumstances the compensation agreed on behalf of Mr Beaumont does not suggest that Mr Thomas's figure of £120 for time spent and losses suffered by the claimants is too low. In the absence of any other evidence, I therefore accept Mr Thomas's estimate of compensation.
14. Accordingly, I determine that the total amount of compensation payable to the claimants by the compensating authority is £320. It is agreed that, in addition, the compensating authority will pay the claimants' surveyor's fee based on Ryde's scale Table E.
15. With a few exceptions, in proceedings determined in accordance with rule 28 no award is made in relation to costs. At the hearing Mr Thomas indicated that he wished to make an application for costs. In the circumstances either party may, not later than two weeks from the date of this decision, apply in writing for costs and send a copy to the other side, who may submit any written representations thereon within four weeks of this decision. Any application for costs should be accompanied by a detailed explanation, with supporting documentation, of the amount claimed. In the absence of any submissions within these time limits I intend to make no order as to costs.

Dated: 29 June 2001

(Signed) N J Rose

ADDENDUM

16. I have received written submissions on costs from both parties.
17. The compensating authority seeks its surveyor's costs in the sum of £2,210.50 plus VAT of £388.76. It points out that the amount of compensation determined by me was significantly less than the sum it offered in a Calderbank letter dated 26 May 2001.
18. The claimants submit an account from their expert witness in the sum of £1,080.40 plus VAT of £189.07. They do not seek to justify their claim for these costs. Nor do they comment on the amount claimed by the compensating authority.
19. By rule 28 (11) of the Lands Tribunal Rules 1996

"No award shall be made in relation to the costs of the proceedings except in cases to which section 4 of the 1961 Act apply, save that the Tribunal may make an award of costs

(a) in cases where an offer of settlement has been made by a party and the Tribunal considers it appropriate to have regard to the fact that such an offer has been made…"

20. In this case, the amount offered by the compensating authority in its Calderbank letter was significantly higher than the amount subsequently determined. I consider it is appropriate to have regard to that offer which, if it had been accepted, would have resulted in a real saving of costs to both parties. As to the amount of costs which should be awarded, the compensating authority's surveyor has charged on the basis of 27 hours at £80 per hour, plus disbursements of £61.50 and VAT at 17.5%. I do not consider it appropriate to order the claimants to pay costs incurred by the compensating authority before the Calderbank offer was submitted and, out of the total of 27 hours charged, only 14.5 related to work carried out after the date of that offer. Moreover, although the total expenditure on disbursements is not broken down by date, I assume that some was incurred before the offer was made.
21. Accordingly, the claimants shall pay the compensating authority the sum of £1,398.25 towards its costs. That sum is calculated as follows:

14.5 hours at £80 per hour = £1,160.00

Disbursements, say £ 30.00

£1,190.00

VAT at 17.5% £ 208.25

£1,398.25

Dated: 29 August 2001

(Signed) N J Rose