England and Wales Lands Tribunal

 


Roadchef Motorways Ltd v The Secretary of State for Transport [2006] EWLands ACQ_45_2005 (30 August 2006)

ACQ/45/2005

LANDS TRIBUNAL ACT 1949

COSTS – preliminary issues on claim for compensation for compulsory purchase – agreement reached prior to hearing – whether acquiring authority the cause of costs being incurred – no order as to costs

IN THE MATTER OF A NOTICE OF REFERENCE

BETWEEN ROADCHEF MOTORWAYS LIMITED Claimant

and

THE SECRETARY OF STATE FOR TRANSPORT Acquiring

Authority

Re: Land at and adjoining

Maidstone Motorway Service area

M20 Junction 8

Hollingbourne

Kent

Before: The President

Sitting at 110 New Bridge Street, London EC4V 6JL

on 13 July 2006

Michael Barnes QC instructed by Beachcroft for the claimant

Neil King QC instructed by Ashurst for the acquiring authority

No cases are referred to in this decision

The following cases were cited in argument:

Tiverton and Devon Railway Company v Loosemore (1884) 9 App Cas 480

Arcadia Ventures Limited v Longhurst (6 December 2000, unreported)

Brawley v Marczynski [2002] EWCA Civ 756

Re Elgindata (No 2) [1992] 1 WLR 1207

AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507

HSS Higher Services Group Plc v BMB Builders Merchants Ltd [2005] 1 WLR 3158

Purfleet Farms Ltd v Secretary of State for Transport, Local Government and the Regions [2003] 1 P & CR 324

DECISION ON INTERIM COSTS

1. In the reference in relation to which the present costs issue arises the claimant, Roadchef Motorways Limited, the tenant of land at a motorway service area, seeks compensation for the compulsory acquisition of part of that land for the Channel Tunnel Rail Link. The issue relates to the claimant's application for costs in respect of certain preliminary issues, which were to have been the subject of a preliminary hearing but on which the parties eventually reached agreement.
2. Roadchef are the tenants of an area of approximately 25 acres of land which comprises the Maidstone motorway service area at Hollingbourne immediately to the north of junction 8 on the M20 motorway. The land comprises (a) an approximately triangular area of land between the M20 to the south and the Maidstone to Ashford railway line to the north and (b) a strip of woodland to the north of the railway line. An approximately oval-shaped piece of land containing fuel pumps and a shop, within the eastern part of the triangular area, is excluded from the lease and is occupied by Roadchef under a licence between them and the freeholders, Esso. Access to and from the M20 is by way of connecting roads to the roundabout at the motorway junction which is constructed over the motorway carriageways. The lease confers on the tenants a leasehold easement of way over the connecting roads to the roundabout and motorway junction.
3. Under the terms of the Channel tunnel Rail Link Act 1996 (the CTRL Act) the Secretary of State for Transport was entitled to acquire, or acquire new rights over, the whole of Roadchef's land for the purposes of the construction of the Channel Tunnel Rail Link (the CTRL). The new railway line was to be constructed parallel to and to the north of the motorway in this location, and would therefore run between the main service area buildings and the motorway.
4. The Secretary of State exercised his powers under the legislation so as to acquire four items of land or rights from Roadchef pursuant to three notices to treat. The first notice to treat related to a substantial part of the land demised to Roadchef south of the Maidstone to Ashford railway line. It did not include the main buildings of the service area, a balancing pond to the west of the main buildings and a small area of land near the existing railway. One consequence of the acquisition was to remove the means of access between the main buildings and the motorway, so that in legal terms the service area buildings became landlocked. The second notice to treat was in respect of a small area of land north of the Maidstone to Ashford railway line and at the northwest extremity of the demised land. The area of the land within the first and second notices to teat is about 15 acres.
5. The third notice to treat had as its purpose the acquisition of certain specified new rights exercisable over an irregularly curved strip which formed the eastern, northern and western boundaries of the main service area buildings. The new rights acquired were a vehicular and pedestrian right of way over the strip for the purposes of the construction, inspection, maintenance, removal, repair, replacement, alteration or renewal of the CTRL and all supporting and other structures.
6. The Secretary of State also acquired freehold land from Esso, which included the reversion to parts of the land demised to Roadchef. It included the area of land between the land demised to Roadchef and the roundabout over the motorway over which Roadchef held the leasehold easement of way.
7. On 12 April 1999 the Secretary of State entered the land or parts of the land referred to in the notices to treat, and, following entry onto the land, the new CTRL railway has been constructed parallel to the motorway and has been in operation since September 2003.
8. Notice of reference was given by the claimant on 1 April 2005, and it stated the claim to be £23m for total extinguishment or £13m for severance/injurious affection. Roadchef's statement of case was filed on 12 August 2005, and it stated the claim to be £22,280,000 for total extinguishment or £12,110,000 for severance/injurious affection. The acquiring authority's reply was filed on 17 October 2005. Roadchef's claim for compensation for injurious affection was in respect of damage caused to the retained land by the CTRL works, that is the construction work, by alterations to surrounding facilities, such as those affecting the visibility of the site from the motorway, and by the running of trains on the new railway. This claim was brought under section 7 of the Compulsory Purchase Act 1965 as extended by section 44 of the Land Compensation Act 1973 (the 1973 Act). In a letter of 30 September 2005 the Secretary of State had stated that he would rely on a new argument which had not previously been raised in the course of discussion between the parties. That argument was that while in principle, and as a result of section 44 of the 1973 Act, a claim for compensation for injurious affection could relate to the effect of works carried out by the acquiring authority on the land acquired and on other land, nonetheless in order for a claim to extend to the effect of works on land other than the land acquired there had to be at least some injurious affection caused by works on the land acquired.
9. For a number of years before this discussions had taken place between the parties in an effort to agree, among other matters, that only a smaller area of land should be permanently acquired. The total land which the Secretary of State wished to acquire from Roadchef was 1.34 acres out of the area of about 15 acres within the first two notices to treat, and he asserted that as a matter of law he was only required to acquire the small area of land. This assertion was based on two contentions. The first contention was that there was a binding agreement, enforceable in law, between him and Roadchef that only the small area of land should be acquired. The second contention was that there was that there was a species of estoppel, which bound Roadchef to the extent that Roadchef could not assert that the full area of land included in the first two notices to treat had to be acquired. On 21 February 2006 the Secretary of State commenced proceedings in the High Court seeking declarations on these matters.
10. In addition to the two issues to which I have referred (the meaning and effect in law of section 44(1) and the amount of land which the Secretary of State was bound in law to acquire) three ancillary issues, arising in part out of the main issues, emerged between the parties. These were, firstly, whether the Secretary of State was entitled to rights of way over land that he did not wish to acquire permanently; secondly, whether he was obliged to pay a licence fee for his occupation over a period of about 18 months of the area of land used as a construction site; and, thirdly, whether Roadchef were obliged to accept the right of way that he was prepared to grant over the new bridge. On 24 March 2006 the Tribunal ordered that these five issues should be determined as preliminary issues, and a hearing was fixed to start on 19 June 2006.
11. Following statements of case on the issues served by the Secretary of State on 7 April and a detailed reply by the Roadchef on 21 April 2006, Roadchef on 27 April made a formal request for clarification. On 3 May 2006 the Secretary of State wrote to say that he was willing to acquire the whole of the land specified in the first two notices to treat. On 3 May 2006 the acquiring authority's solicitors wrote to the claimant's solicitors saying that Roadchef was prepared to acquire all the land specified in the first two notice to treat; and on the basis that all the land was acquired the Secretary of State would grant Roadchef rights of access over the part of the internal road of the MSA lying within the land to be acquired. They said that, notwithstanding the acceptance by the Secretary of State of Roadchef's insistence that all the land subject to the notices to treat should be acquired, Roadchef was invited to progress the matter on the basis of the acquisition of the land permanently required for the CTRL and for the grant to Roadchef of rights of access over the access bridge in return for the grant by Roadchef of rights of access over the internal MSA road and over the trackside access to the CTRL.
12. The claimant's solicitors replied on 9 May 2006. Addressing the first four of the five preliminary issues, they said that the first ... whether the Secretary of State was obliged to acquire all the land ( must be decided by agreement in favour of Roadchef; that the second ( the licence ( in consequence did not arise; that, on the third issue, the Secretary of State was entitled to the use of roads; and that, on the fourth ( Roadchef's right of access ( it would enjoy the rights offered in the draft agreement provided that acting reasonably Roadchef were bound to accept those rights. On the fifth issue ( the section 44(1) point ( the letter said that it was not acceptable that this matter should be left over to later decision, as the acquiring authority's solicitors had suggested. That must be determined as a preliminary issue at the hearing that had been fixed. Finally, the letter said, Roadchef were willing to continue discussions on the acquisition of the smaller area of land, but only on the basis that this would not affect the compensation for injurious affection.
13. Agreement was reached that the Secretary of State would acquire part only of Roadchef's land and that the rights of way for each party would be granted. For the purposes of the assessment of compensation for injurious affection the Secretary of State accepted that compensation should be assessed by reference to the whole of the CTRL works whether the damage was caused by works on the land acquired from Roadchef or on any other land or both. The section 44(1) point was thus abandoned.
14. Following a change of counsel instructed on behalf of the claimant, the claim had taken on a different nature. This was foreshadowed in a long letter from the claimant's solicitors on 7 April 2006 and was eventually embodied in an extensive amended statement of case, which was filed on 7 June 2006 and took account of the agreement that had been reached on the preliminary issues. The claim for total extinguishment was abandoned and the injurious affection claim was differently based. The compensation sought was £11,089,500 for the value of the land acquired, £12,121,121 for severance and injurious affection and the loss of the easement of way, and £2,832,319 for disturbance or other loss under rule (6) of section 5 of the 1961 Act.
15. The parties agree that it is appropriate that the question of the costs of the preliminary issue should be dealt with now and not left over until the decision on the substantive matter, notwithstanding that this is a claim for compensation to which section 4(1) of the Land Compensation Act 1961 will in due apply. For the claimant Mr Barnes submitted that of the five preliminary issues, two ... whether the Secretary of State was bound to acquire the whole of the land that was the subject of the first two notices to treat and the section 44 point ( were main issues of principle critical to the assessment of compensation, and the other three were consequential or ancillary. The Secretary of State abandoned or conceded these issues, and accordingly, said Mr Barnes, he should pay the claimant's costs.
16. For the Secretary of State Mr Neil King QC submitted that it was wrong to characterise the acquiring authority's position on the preliminary issues as that of concession or abandonment. What in fact happened, he said, was that the issues were compromised by agreement between the parties. The context in which the preliminary issues arose was the claimant's claim for compensation on the basis of either total extinguishment or severance/injurious affection. In its notice of reference (1 April 2005) the claim was stated to be £23m for total extinguishment or £13m for severance/injurious affection, and this had been maintained, with slightly different figures, in the statement of case of 12 August 2005. The five preliminary issues were ordered to be determined by agreement between the parties. Following the cancellation of the preliminary issues hearing, the amended statement of case expressed the claim on a different basis.
17. Mr King submitted that the negotiations that led to the agreement in relation to the preliminary issues did not result in one party being "successful" on these as compared with the other. The claimant agreed to the acquiring authority acquiring the lesser area of land and there would be a mutual grant of access rights; and the acquiring authority would not pursue the section 44 point in the context of the reference. The compromise reached had significant implications for the way the claimant's claim was put. The total extinguishment or severance/injurious affection basis was replaced by a ransom value plus severance/injurious affection disturbance claim.
18. It was also relevant to note, Mr King said, that in the course of correspondence between June and early August 2005 the claimant had said that it would agree to a reduced landtake and that at the pre-trial review on 20 June 2005 the claimant's then counsel said that he would draft an agreement that included provision to that effect. No such draft was, however, produced; and on 12 August 2005 the claimant's statement of case was served, in which it was made clear that compensation was being claimed in respect of the acquisition of all the land under the three notice to treat. The indication on the part of the Secretary of State shortly afterwards that he would take the section 44 point was given against that background.
19. I accept Mr King's submissions. It would be wrong to treat the agreement reached between the parties that obviated the need to determine the preliminary issues as constituting success by the claimants on the preliminary issues. It clearly was not. Negotiations of long standing had sought to resolve the question of the amount of land to be acquired and the arrangements as to access that should be made. Despite the proposal at the PTR on 20 June 2005 that the claimant's then counsel would draft an agreement, no such draft was provided. The statement of case maintained the two grounds of claim, which were based on the assumed acquisition of the entirety of the land in the notices to treat, and the section 44 point was first taken by the Secretary of State shortly after this. The statement of case was not formally amended until 7 June 2006. The identification of the preliminary issues provided the necessary focus for agreement to be reached on the amount of land to be acquired and the access arrangements. The formal acceptance on the part of the Secretary of State that he was obliged to acquire all the land was made in order to secure the concession on the part of Roadchef (which he had been seeking to achieve over many years' negotiations) that only the smaller area should in fact be acquired, and the maintenance of the section 44 point was part of the Secretary of State's negotiating stance. I find it impossible to say that the Secretary of State was the cause of the costs of the preliminary issues being incurred. In the light of the way in which the claim had been advanced and the disagreements between the parties it was appropriate that the preliminary issues should have been ordered to be determined, and it was the agreement reached between the parties, involving concessions on both sides, that obviated the need for a hearing.
20. The right order, in my judgment, is that there should be no order for costs. That was the contention of the Secretary of State. As for the costs of the claimants' application, the parties expressed agreement that these should follow the event if one side or the other was wholly successful. Accordingly the claimant must pay the acquiring authority's costs of the application, such costs if not agreed to be the subject of detailed assessment by the Registrar on the standard basis.

Dated 30 August 2006

George Bartlett QC, President