Part V          

Implementation procedures

Introduction

                  5.1               The next three Parts look at the steps acquiring authorities must take in order to obtain physical possession, to secure title to the land subject to compulsory purchase, and to initiate the procedure for settling compensation. These procedures start from the point where the compulsory purchase order has been made, objections (if any) have been resolved, and the order has become “operative”, as explained in the previous Part.

                  5.2               This Part looks at the alternative steps to be taken by authorities to initiate the process for settling compensation, to obtain physical possession, and to secure title to the subject land:

(1) We note the Government’s intention to retain two alternative methods for implementing an approved order: notice to treat and vesting declaration;[1]

(2) We consider the Government’s proposals for revised time limits under both procedures, and make proposals to give them effect; and

(3) We review the main stages in the notice to treat procedure:

(a) Formalities of notice to treat;

(b) Notice of entry;

(c) Completion of purchase;

(d) Deed poll procedure;

(e) Missing interests; and

(f) Persons with limited powers.

                  5.3                We make proposals for a new “deed poll procedure”, and for a new provision for owners who are untraced, or unable or unwilling to act. We propose the repeal of Schedule 1 to the 1965 Act (persons with limited powers). Subject to those changes, and to simplification of the language in a future consolidation, we make no further proposals, but invite comments on any practical problems which should be addressed.

(1) Alternative procedures

                  5.4               In modern practice,[2] there are two alternative ways by which an acquiring authority may secure title to land once the CPO has ministerial confirmation: by notice to treat and by vesting declaration:

(1) The notice to treat procedure, which dates back to the 1845 Act, involves service of a statutory notice on each affected landowner to initiate the process of agreeing or determining compensation. Title does not pass to the authority until compensation has been settled, but the authority may take possession in the meantime by serving notice of entry.[3] In the main, the mechanisms relating to service of notice to treat and notice of entry are governed by the 1965 Act;[4] and

(2) The more recent vesting declaration procedure enables the authority, after confirmation, to make a declaration vesting title in itself after expiry of a defined period (not less than 28 days) from the service of a notice on those affected. This procedure does not necessitate compensation being determined before title can pass.[5] The procedure is governed by the Vesting Declarations Act.[6]

                  5.5                The DTLR Policy Statement has accepted the CPPRAG recommendation that, in the interests of flexibility, both procedures should be retained. The Policy Statement says:

There have also been suggestions that it is unnecessary to retain both the notice to treat and the general vesting declaration procedures. The latter replaces both the notice to treat (which is deemed to have been served) and the conveyance with one procedure … It is therefore useful to acquiring authorities where it has not been possible to identify the owners of all the affected land. It also offers a greater degree of certainty for those affected, including fixing the date of vesting as the date to which the valuation of their property will relate. However, its disadvantages include the fact that the power to withdraw the notice to treat no longer applies once the declaration has been executed. … We therefore see sense in retaining the flexibility afforded by keeping both the notice to treat and general vesting declaration procedures.[7]

We accept that approach, and make no proposal for substantive change, save for the repeal of Schedule 3 to the 1965 Act.

Proposal 4 – Alternative procedures

Schedule 3 to the 1965 Act should be repealed.

Consultation issue (F) – Alternative procedures

Do consultees agree that Schedule 3 (alternative procedure for obtaining right of entry) is obsolete and should be repealed?

(2) Time Limits

Notice to treat procedure

Time for “exercise” of powers

                  5.6                The 1965 Act provides that the authority’s powers of compulsory purchase shall not be “exercised” after the expiration of 3 years from the date when the CPO becomes operative.[8] It is clearly established that service of notice to treat is a sufficient “exercise” of the powers for this purpose.[9]

Time following notice to treat

                  5.7                Under the 1965 Act, a notice to treat ceases to have effect at the end of 3 years beginning with the date of service, unless one of four events has occurred:

(1) compensation has been agreed between the parties or has been awarded or has been paid or paid into court;

(2) a general vesting declaration has been executed;

(3) the acquiring authority have taken possession of the land specified in the notice; or

(4) the question of compensation has been referred to the Lands Tribunal.[10]

The parties can mutually agree extension of the 3 year time limit.[11]

                  5.8               Subject to the above provisions, there is no specific time limit for service of notice of entry,[12] nor any limit on the validity of a notice once served. The 1965 Act, section 11 simply states that the authority may take possession, having served “not less than 14 days notice”. This appears to leave the authority (within the limits of reasonableness) free to enter at any time thereafter, without further notice.

Vesting declaration procedure

                  5.9               The 3 year time limit for “exercise” of the power of compulsory purchase also applies where the vesting declaration procedure is used. There is some doubt as to what is needed for “exercise” of the power in this context. Under that procedure, the first step is the service of a “preliminary notice”, giving prescribed particulars of the effect of the vesting declaration, and inviting information from potential claimants.[13] This is followed by the formal execution of the declaration, vesting the land in the authority from a defined date.[14]

             5.10             There have been conflicting High Court decisions as to whether the service of a preliminary notice within the 3 year time limit keeps the order alive.[15] The Department has advised that, in view of this uncertainty, an authority should ensure that it executes the declaration within the 3 year period.[16]

             5.11               There are no other time limits under the vesting declaration procedure (other than in relation to reference to the Lands Tribunal[17]). That is understandable, since the only interests outstanding following the vesting date are by definition limited in time.[18]

Reform proposals

             5.12               CPPRAG recommended, and the Government has consulted upon, a variation of the notice to treat procedure, whereby affected owners and occupiers would be able to take the initiative by serving a “reverse notice to treat” (not sooner than one year after confirmation) requiring the authority to implement the order.[19] In the light of the responses, Government now takes the view that the proposals should not be pursued;[20] instead it proposes that the time limits for action by the authority, following confirmation of the order, should be reduced:

…. (except where the parties agree otherwise), we propose to reduce the overall period within which an acquiring authority has to complete the compulsory purchase process following confirmation from six years to three years, with a maximum of eighteen months between confirmation and serving the notice to treat (or a general vesting declaration) and then a maximum of a further eighteen months during which the notice to treat remains effective.[21]

             5.13               In addition it proposes that the minimum period for taking possession following notice of entry,[22] should be two months, and that the validity of the notice thereafter should be limited to one month:

We also envisage increasing the degree of certainty for those whose property is affected by increasing the period between the authority serving notice of entry and taking possession from fourteen days to two months, with an absolute requirement that, if the authority has not then taken possession within one month of the expiry of the two-month period specified in the notice of entry, that notice will immediately cease to have effect and the authority will not be able to serve a further notice of entry.[23]

             5.14               These revised proposals leave some questions unresolved:

(1) Starting date The initial 18 month period is stated to run “between confirmation and serving the notice to treat (or a general vesting declaration)…” We consider that the reference to “confirmation” should be read as meaning the “operative date” to allow for any legal challenge to the confirmed order.[24]

(2) Vesting declaration We have referred above to the doubts as to whether, in order to keep the order alive under the vesting declaration procedure, a preliminary notice is sufficient, or whether there needs to be actual execution of the declaration.[25] We agree with the latter view, which was also the position taken in the Policy Statement.[26]

(3) Effect of notice of entry It is not clear whether the proposed 2 month period stated in the notice of entry is intended to be a fixed requirement, or a minimum period. The 14 day period, which it is intended to replace, is a minimum; the notice must be “not less than 14 days”.[27] A fixed period would probably provide greater certainty. Although there may be reasons in practice for the authority to want to give longer notice in particular cases, this can be done informally. The time may also be extended by agreement (see below). We provisionally propose, therefore, that the formal notice of entry should take effect after a fixed period of two months, applicable in all cases.

(4) Taking possession The implication of the proposal appears to be that actual possession must be taken within the 18month period. This would mean that the notice of entry would need to be served within 15 months of notice to treat, in order both to allow for 2 months notice, and to take full advantage of the one month allowed for entry thereafter. However, since the additional one month is optional, it would be possible in theory for the period to be extended up to one day short of 16 months. There may also be room for argument about when precisely, during the one month period, actual possession is taken. It may be simpler and clearer for all parties if the 18 month limit is stated to run to service of notice of entry.[28] The overall period would then be a maximum of 21 months.[29]

(5) Extensions of time The current proposal envisages that the time limits may be extended by agreement between the parties. In the earlier proposals, it was envisaged that there might be an extension of the time for exercise of the power, up to a maximum of three years, “by the minister at confirmation stage (on the basis of a case put forward by the acquiring authority and discussed at the inquiry)…”[30] This possibility is not mentioned in the current proposals. It seems reasonable that the authority, in a case of particular complexity, should have the right to seek a longer period.

             5.15               In the light of these comments, we propose that the time limits should be re-stated in the following form.

Proposal 5 – Time limits

(1) A compulsory purchase order will cease to have effect at the end of the period of 18 months from the operative date, other than in relation to any land in respect of which the order has been implemented.

(2) For this purpose, an order is implemented in respect of any land, if notice to treat has been served or a vesting declaration has been executed in respect of that land.

(3) A notice to treat shall cease to have effect at the end of the period of 18 months beginning with the date on which it is served, other than in relation to any land in respect of which:

(a) compensation has been agreed or awarded or has been paid or paid into court;

(b) a vesting declaration has been executed; 

(c) the acquiring authority have served notice of entry; or 

(d) the question of compensation has been referred to the Lands Tribunal.

(4) A notice of entry shall be expressed to take effect at the end of two months from the date of service, and shall state that, if the authority has not taken possession within one month of the expiry of the two-month period so specified, the notice will cease to have effect and the authority will not be able to serve a further notice of entry.

(5) These time limits may be extended by agreement between the parties or on application to the confirming authority.

Consultation issue (G) – Time limits

Do consultees agree with the above proposals (including in particular those discussed in paragraph 5.14(1)-(5)?

(3) Notice to treat procedure

             5.16               The main features of the notice to treat procedure can be considered under the following headings:

(a)   Formalities for notice to treat;

(b)   Notice of entry;

(c)   Completion of purchase;

(d)   Deed poll procedure;

(e)   Missing interests; and

(f)     Persons with limited powers.

(a) Formalities for notice to treat

Existing law

             5.17               Section 5 of the 1965 Act governs the procedure for implementation by notice to treat. The following are the main legal requirements:

(1) The compulsory purchase order must have become “operative”.[31]

(2) The acquiring authority must “require to purchase” the land specified in the notice for the authorised purpose;[32] it may be only part of that included in the confirmed order;[33]

(3) Notice to treat must be given to “all the persons interested in, or having power to sell and convey or release”, so far as known to the authority after making “diligent inquiry”; and

(4) The notice must give particulars of the land; demand particulars of the recipient’s “estate and interest”; state that the authority is willing to “treat” (negotiate) both for purchase of the land and for the compensation payable for “the damage which may be sustained by reason of the execution of the works”.

             5.18               These requirements, and much of the language, are derived from section 18 of the 1845 Act.

Proposal

             5.19               The Government has not proposed any changes of substance to these requirements. The language could be modernised in a consolidation. For example, reference to the compensation payable “for damage which may be sustained by reason of the execution of the works” is a very incomplete description of the different heads of compensation under the modern code.[34] On the other hand, the expression “notice to treat”, though archaic in other contexts, has acquired a familiar and well-established meaning in compulsory purchase, and is short. Because of the historical origins of the procedure, there is no prescribed form of notice to treat. However, as with other forms of notice, we think a prescribed form would help to ensure consistency.

             5.20               An issue of more substance is the definition of those entitled to service of notice to treat. As already noted, [35] the 1965 Act requires notice to treat to be served only on those with recognised “interests” in the land. There is extensive case law establishing what “interests” qualify for service of notice to treat.[36] For example, they include rights under a contract for sale;[37] options to purchase;[38] and mortgages (legal or equitable).[39] They do not include tenancies for no greater interest than from year to year,[40] or occupational licences[41], or easements,[42] or rights of commoners.[43] We invite views on whether the definition of “interest” in the cases creates any practical problems.

             5.21               We deal in more detail with minor tenancies in the context of notice to treat procedure in Part VI(1) below and, more particularly, discuss the utility of the special procedure in section 20 of the 1965 Act. The reason for excluding certain lesser interests is no doubt that the authority may not need to acquire these interests, and therefore does not need to “treat” for their “purchase”. For example, a tenancy from year to year may be brought to an end by notice to quit within the timescale required by the authority. On the other hand, the authority may find it convenient to treat all owners of interests or occupiers in the same way. Furthermore, under the present law, all those in occupation, whether or not they have interests entitling them to notice to treat, are likely to be entitled to some form of compensation for displacement.[44]

             5.22               Subject to those points, we see no need for substantive amendment to the existing statutory provisions, although the language could be simplified in a future consolidation.

Proposal 6 – Notice to treat

(1) There should be a prescribed form of notice to treat.

(2) The reference to compensation (in 1965 Act, section 5(2)(c)) should be amended to substitute a reference to the compensation to be paid in respect of that interest under the Compensation Code.

Consultation issue (H) – Notice to treat

(1) Is the definition of those on whom notice to treat is required to be served (1965 Act s 5) sufficiently clear? If not, what problems arise?

(2) Should the authority have a discretion to serve notice to treat on owners of interests or occupiers  outside the defined categories?

(3) Do consultees agree (a) that there should be a prescribed form of notice to treat, and (b) that the reference to compensation should be updated as proposed?

(b) Notice of entry

Existing law

             5.23               The normal procedure for taking possession following notice to treat is by “notice of entry” under section 11 of the 1965 Act. Apart from this section, the authority may not take possession (other than by consent) until compensation has been paid.[45] The notice of entry procedure was introduced in 1946.[46] For practical purposes, it has replaced the more complex procedure under the 1845 Act, which is still preserved in a Schedule to the 1965 Act,[47] but should in our view be repealed.

             5.24               Section 11(1) provides that, if the authority have:

(1) served notice to treat in respect of any of the land;[48] and

(2) “served on the owner, lessee, and occupier of that land not less than fourteen days notice of entry”;

they may “enter and take possession of” the land or “such part of the land as is specified in the notice”.[49] The compensation ultimately awarded carries interest from the time of entry until payment (or payment into court).[50]

As has been seen, entry following a notice under section 11 is one of the steps required to be performed within 3 years of the date of service of the notice to treat, to prevent the notice from lapsing.[51] 

             5.25               Service of a notice of entry does not commit the authority to taking possession at the end of the specified period, nor result in a notional taking of possession at that time.[52] What constitutes actual entry will be a question of fact.[53] In practice, the notice is usually treated as giving the right to enter at any time following expiry of the time specified, and actual entry may be significantly delayed.[54]

             5.26               This arrangement may cause serious uncertainty for occupiers. In such cases, it is usually in the interests of both sides to agree detailed arrangements for the actual take-over, in order to minimise the disruption and compensatable losses. As we have seen, the Government recognises the difficulty and has made proposals for change.[55]

             5.27               As section 11 makes clear, an authority may serve separate notices for different parts of the land, and take possession in stages. Alternatively, it may serve notice of entry in respect of the whole of the land, but then take actual possession by stages. However, in the latter case, the first entry on part will be treated (for compensation purposes) as taking possession of the whole of the land included in the notice of entry, even if the owner remains in actual possession of the remainder.[56]

Discussion

             5.28               We have already referred to the Government’s proposals for revised time limits for notice of entry.[57] We see no need for further substantive change, but invite comments on any other practical problems.

Consultation issue (I) – Notice of entry

 Subject to the proposals for amended time limits (para 5.15 above), are there any other practical problems in the operation of the rules for notice of entry? If so,  how should they be remedied?

(c) Completion of purchase

Generally

             5.29               In a normal case, where notice to treat is followed by agreement or determination of compensation (whether or not entry has taken place), completion is governed by the ordinary law relating to sale of land.

             5.30               The notice to treat itself does not create a binding contract of sale.[58] Thus, for example, a contract for sale of land will not be frustrated by service of a notice to treat; the owner is free to sell or otherwise deal with his property.[59] There is no requirement that it be registered as a land charge under the Land Charges Act 1972, since it is not an estate contract.[60] However, the rights and obligations it creates are legal incidents binding on the land.[61] It has the effect of preventing the owner from creating any new interest in the land so as to increase the compensation burden on the acquiring authority.[62] It also puts either party in the position, in default of agreement, to require the compensation to be determined by the Lands Tribunal,[63] and thereby to create a legally enforceable contract.

             5.31               Once compensation has been agreed or determined, the position changes.[64] There is then a relationship equivalent to that of vendor and purchaser under an ordinary contract for sale of land  (sometimes called a “statutory contract”[65]). This is enforceable by specific performance by either party in the ordinary way.[66] A form of conveyance is prescribed by the 1965 Act, but this is not mandatory, and it is doubtful whether it serves any useful purpose.[67] We invite views.

             5.32               One issue arising from this assimilation of the compulsory purchase procedure to that for a private sale is the availability of the “vendor’s lien”. Under the ordinary law, a vendor retains a lien over the land, until the purchase price is paid.[68] In principle, it seems, a person whose land is compulsorily acquired may also claim a “vendor’s lien”, until compensation is paid.[69] However, the cases which established this principle arose under the procedures in the 1845 Act, as applied to railway companies.[70] It is not clear how far it would be followed under modern procedures, for example where the authority has taken possession before determination of compensation.[71] There seems little justification for such a lien, to secure what is a statutory right to payment of compensation by a public authority. On the other hand, where the acquiring authority is a commercial entity, such as a privatised utility company, the additional protection of the vendor’s lien may continue to be important.

             5.33               Subject to the last point, we are not aware of any particular difficulties in the powers available for completion. We provisionally propose no change to the present procedure: that is, the right of either party to refer the question of compensation to the Tribunal, and to enforce the resulting “statutory contract” by specific performance. However, we invite comments.

Consultation issue (J) – Completion of purchase

(1) Do consultees agree that the law relating to completion of purchase following notice to treat operates satisfactorily?

(2) Is there a need to clarify or amend by statute the law relating to the vendor’s lien in its application to property subject to compulsory purchase? If so, in what circumstances, if any, should there be such a lien, and subject to what conditions?

(3) What practical purpose (if any) is served by the prescribed forms of conveyance (1965 Act s23, Schedule 5)?

(d) Deed poll procedure

             5.34               In addition to the remedy of specific performance, the authority has a statutory remedy under the 1965 Act. Section 9 of the 1965 Act applies if the purchase price or compensation (agreed or awarded) has been tendered to the landowner, and he (a) refuses to accept it or (b) fails to make good title or (c) fails to execute the necessary conveyance or release.[72] The acquiring authority may then pay the compensation sum into court,[73] and execute a deed poll,[74] describing the land, the circumstances of the payment and the parties to whose credit the payment is made.[75] This will have the effect of “vesting absolutely” in the authority the interests of those for whom the payment is made, together with right to immediate possession as against them.[76] Section 9(5) provides for the court to make orders for distributing the moneys paid into court “according to the respective estates, titles or interests” of the claimants. The order may be made on the application of any person claiming any of the money, or any interest in the land.[77]

             5.35               The 1965 Act contains further detailed provisions relating to payments in, which may be unnecessary in a new Code. Although section 9 gives the Court power to make such order “as it thinks fit”,[78] there is also special provision, in the case of money paid in respect of a lease or similar interest, for the court to order it to be invested and paid to give “the same benefit as they might lawfully have had from the lease… or as near as may be thereto.”[79] There is also a lengthy provision, probably more relevant in 1845, requiring it to be assumed, unless the contrary is shown, that those in possession as owners at the time of the purchase are “deemed to be lawfully entitled”.[80] We doubt whether either needs express provision in a modern Code. A general power for the Court to make such orders as it thinks fit would be sufficient.

             5.36               Otherwise, we are not aware of any particular difficulties in the application of these rules.[81] However, we think it would be desirable to replace the present provisions with a new version of the deed poll procedure, expressed in modern and simplified terms along the lines proposed below. As will be seen, it is also applied in the context of vesting declaration procedure.[82] We welcome comments from consultees as to the extent of use of the deed poll procedure in practice, and any practical problems to which it gives rise. Section 28 of the 1965 Act (Provisions as to deed polls), which deals with incidental matters relevant to deed polls,[83] could be retained as part of this provision. We doubt, however, whether it is necessary to retain section 28(3), which provides that the execution of a deed poll is subject to the Law of Property Act 1925, s 7(4). The latter provision requires any power for disposing of or creating a legal estate which is being exercised by a person who is not the estate owner to be exercised, when practicable, in the name and on behalf of the estate owner. The effect of the two provisions combined appears to be that the acquiring authority is required to exercise its powers in the name of the estate owner where it is practicable to do so. We are unsure whether this is considered to be the effect of the provisions by those who utilise the deed poll procedure, and if so whether the reference to section 7(4) serves a useful purpose, or whether it is felt that section 28(3) can safely be repealed. We invite views from consultees as to its continuing relevance.

             5.37               We provisionally propose that the detailed provisions of sections 25 and 26 of the 1965 Act, relating to payments into court, should be replaced in simpler form in this provision.[84]

Proposal 7 – Deed Poll procedure 

(1) If after compensation in respect of any land or interest in land has been agreed or determined, the person entitled:

(a) refuses to accept the compensation;

(b) fails to make out title to the satisfaction of the acquiring authority; or

(c) refuses to convey or release the land as directed by the acquiring authority;

the authority may proceed by “deed poll procedure” as described in this proposal.

(2) The acquiring authority may pay into court the compensation payable in respect of the relevant land, or interest, accompanied by a description of the person or persons entitled (so far as known to the authority). The compensation so paid into court shall, subject to the provisions of this Act, be placed to the credit of those persons.

(3) On payment into court as above, the acquiring authority may execute a deed poll describing the relevant land, and the circumstances of the payment, and giving the names of the persons to whose credit the compensation is paid.

(4) On execution of the deed poll, all the interests in respect of which the compensation was so paid shall vest absolutely in the acquiring authority together with the right to immediate possession as respects those interests.

(5) On the application of any person claiming any part of the money paid into court, or any interest in any part of the land in respect of which it was paid into court, the High Court may order its distribution according to the respective interests of the claimants,[85] and may make such incidental orders as it thinks fit.

(6) The incidental provisions of section 28 of the 1965 Act (sealing of deed polls, stamp duty etc) should be incorporated.[86]

(7) The costs incurred in connection with a payment into court under this proposal shall be borne by the authority, save as the court may otherwise order.

Consultation issue (K) – Deed poll procedure

(1) Do consultees agree that it would be desirable to re-state the deed poll procedure in modern form?  If so, do they have any comments on the detail of the above proposal?

(2) In particular, do they agree that the detailed provisions (referred to in para 5.35) are unnecessary, so long as the Court has a general power to make such orders as it thinks fit?

(3) Further, do consultees have any comments on the effect and continuing relevance of section 28(3) of the 1965 Act and the reference therein to section 7(4) of the Law of Property Act 1925? Can section 28(3) be safely repealed?

(4) Consultees are asked to indicate the extent of use of the present deed poll procedure, and any practical problems to which it gives rise.

(e) Missing interests

             5.38               Schedule 2 to the 1965 Act[87] contains special rules dealing with “absent and untraced owners.” It applies to land to be acquired from either a person who “is prevented from treating with [the authority] on account of absence from the United Kingdom”; or a person who “cannot be found after diligent inquiry has been made”.[88] Compensation is determined by a surveyor member of the Lands Tribunal,[89] and is paid into court, following which the authority may execute a deed poll vesting the relevant interests in the authority.[90]  Any person claiming an interest in the land may apply to court for payment out;[91] if he is dissatisfied with the amount determined by the surveyor, he may require the authority to submit that issue to the Lands Tribunal for determination.[92]

             5.39               We understand from the Lands Tribunal[93] that about a dozen cases a year are dealt with under Schedule 2. Generally they concern small pieces of land which have been forgotten by their owners, and are of little value. Occasionally, a parcel may be more valuable, for example because it holds the key to a development site. The normal practice is for the appointed surveyor to seek a valuation from the District Valuer,[94] and there will usually be no reason to question that valuation.

             5.40               One issue which is raised by the Tribunal for possible consideration is whether there should be provision for the acquiring authority to challenge the surveyor’s assessment as being too high. There is currently procedure for challenge by the claimant, but not by the authority. However, the procedure for subsequent challenge by the claimant is needed because he is not party to the original reference. It would appear open to the Tribunal to regulate its procedure so that the authority is able to present its views to the Tribunal before the “valuation” is fixed. If statutory provision is needed, this could be covered by the procedural rules.[95]

             5.41               We think that the present missing interests procedure should be replaced, in modern language and form.Furthermore, provisionally we see no reason to limit it to the categories referred to in Schedule 2.[96] It should be available whenever the authority is unable to deal directly with the person entitled to a relevant interest, whether because he cannot be traced, or because he is unable or unwilling to deal with them. We invite views on this point.

Proposal 8 – Owner untraced, or unable or unwilling to act

(1) Where either:[97]

(a) the owner of any interest in the subject land cannot, after reasonable inquiry, be found by the authority; or

(b)the owner has been found, but it appears to the authority that he is prevented from dealing, or is unwilling to deal,  with them, by reason of illness, absence or any other circumstance;

the authority may proceed under this proposal.

(2) The authority may apply to the Lands Tribunal for the compensation to be paid in respect of the interest to be fixed by a valuation of a surveyor selected from the members of the Lands Tribunal in accordance with section 3 of the Lands Tribunal Act 1949.

(3) The acquiring authority shall hold the valuation and produce it on demand, to the owner of the interest to which the valuation relates, or any other persons interested in the land.

(4) All the expenses of and incidental to the valuation shall be borne by the acquiring authority. 

(5) Following the determination of compensation, subject to (6) below, the authority may proceed under the deed poll procedure, and the same consequences shall apply.

(6) Where any person claiming to be entitled to compensation paid into court under this proposal, wishes to challenge the amount of compensation as fixed under (2):

(a) He may, before applying to the High Court for payment, by notice in writing to the acquiring authority require the submission of the issue to the Lands Tribunal;

(b) Pending the decision of the Tribunal, the High Court may make such orders for interim payment as it thinks fit; and

 (c) If the Lands Tribunal awards a further sum, the acquiring authority shall pay over or pay into court, as the case may require, that further sum within fourteen days of the making of the award.[98]

Consultation issue (L) – Owners untraced or unable or unwilling to act

(1) Do consultees agree with our provisional view that the missing interests procedure should be re-stated in modern terms?

(2) In particular, do they agree that it should not be restricted to persons absent from the UK or who are untraceable, but should also include persons who are unwilling or unable to deal with the authority for whatever reason? 

(f) Persons with limited powers

Existing law

             5.42               Schedule 1 to the 1965 Act[99] contains a number of provisions described variously as “of limited and rare application”[100] and “of little practical interest [because in] most, if not all, cases . . .  power to sell and convey exists elsewhere.”[101]

             5.43               In essence the Schedule sets out arrangements which enable various classes of person subject to some legal disability to sell lands to an acquiring authority (and the mechanics for handling compensation payable). The classes include corporate bodies, tenants in tail or for life, charitable and other trustees, and persons entitled to receipt of rent and profits from land.[102] Valuation of the subject land is carried out initially by two nominated surveyors, and the compensation is paid into court pending a direction as to its use.[103] We are not aware of any cases where these provisions are required or used in practice.

 An Australian comparison

             5.44               The Australian Law Reform Commission was faced with similar provisions in the Commonwealth legislation, also derived from the 1845 Act. It took the view that such elaborate treatment was unnecessary in a modern Code. It recommended two provisions: first, to empower the person in whom the legal interest is vested, notwithstanding any contrary legal provision, to dispose of land to the acquiring authority; secondly, to empower the Federal Court to approve any agreement for that purpose.[104]

             5.45               The Lands Acquisition Act 1989 (Commonwealth) (“LAA (Cth)”), section 116 now provides:

(1) Where:

(a) an acquiring authority wishes to acquire an interest in land from a person by agreement; and

(b) but for this subsection, the person would not have the capacity or power to enter into or carry out such an agreement;

the person may, with the approval of the Federal Court, enter into and carry out such an agreement.

(2) Where:

(a)an interest in land has been acquired from a person by compulsory process; and

(b)but for this subsection, the person would not have the capacity or power to do something in connection with compensation in respect of the acquisition;

the person may, with the approval of the Court, do the thing.

(3) Where, under subsection (1) or (2), the Court gives its approval to a person entering into an agreement, or doing something in connection with compensation, amounts payable under the agreement, or by way of compensation, shall be:

(a)paid to a trustee appointed by the Court, subject to such trusts as the Courtdirects; or

(b)otherwise applied in accordance with the directions of the Court.

(4) This section has effect despite any law, deed, will, memorandum or articles of association or other instrument.

Proposal for change

             5.46               We have no doubt that Schedule 1 to the 1965 Act, in its present form, is unnecessarily complex. If there is a need to deal with this issue in a new Code, the Australian legislation provides a suitable model. However, we are not at present persuaded that there are any situations in practice where such a provision would be used. Accordingly, we provisionally propose simply to repeal Schedule 1 without replacement. We invite views.

Consultation issue (M) – Persons with limited powers

Do consultees agree that Schedule 1 to the 1965 Act can be repealed without replacement?

(4) Vesting Declaration procedure

             5.47               The other method of implementing a compulsory purchase order is by general vesting declaration. The procedure is now consolidated in the Vesting Declarations Act, replacing earlier provisions first contained in the Land Commission Act 1967.[105] The procedure is available to an acquiring authority once the order has become operative.

Procedure

             5.48               The Act lays down three steps before the declaration can take effect:

(1) the giving of the statutory particulars,[106] either in the notice of confirmation of the order, or in a subsequent statement published and served in the same way.[107] The declaration itself may not be executed less than 2 months after first publication of this notice, although the notice may specify a longer period, or a shorter period may be agreed with all the occupiers;[108]

(2) the execution of the declaration in prescribed form vesting the land in the acquiring authority at the end of a specified period, not less than 28 days after the service of notices under (3) below;[109] and

(3) service of a notice in the prescribed form (specifying the land and the effect of the declaration) on every occupier of the subject land and on any person who supplied information in response to the particulars under (1) above.[110]

             5.49               Once executed the declaration will have the effect of vesting in the acquiring authority, on the vesting date, title to the land specified in the declaration, together with the right to take possession, as though it had executed a deed poll “in respect of all the land and all the interests therein”.[111] Notice to treat is deemed to have been served, on the date of execution, on every person who could have been served with a notice under section 5 of the 1965 Act.[112] From the vesting date the authority becomes liable to pay compensation, and interest on it, as though possession had been taken under a notice of entry.[113] “Minor tenancies” and long tenancies “about to expire” are excluded from this procedure.[114]

             5.50               We have already mentioned that, under the notice to treat procedure, easements or other rights (such as restrictive covenants) affecting the subject land are not automatically extinguished on compulsory acquisition, but may be overridden when necessary on payment of compensation.[115] It is not entirely clear from the Vesting Declarations Act whether the same applies. Section 8(1) provides that the land vests in the authority as if a deed poll under Part I of the 1965 Act had been executed in respect of “all the land and all the interests therein”; and subsection (2) provides that this includes a deed poll “for extinguishing… any rent-charge… or other incumbrance”.[116] There is no reference to the extinguishment of rights such as easements. The implication seems to be, therefore, that, under the vesting declaration procedure, such rights are not extinguished automatically, but may be overridden on payment of compensation, as under the notice to treat procedure.[117]

Discussion

             5.51               The Policy Statement contains no proposal to amend the main features of the vesting declaration procedure, and we are not aware of substantial difficulties in its operation, although there may be a need for clarification of the effect of a vesting declaration on existing rights, such as easements.[118] As a relatively modern procedure, it may be incorporated in a future consolidation without substantial amendment. However, we invite views on any specific problems to which the existing procedure gives rise.

Consultation issue (N) – Vesting declaration procedure

(1) Do consultees agree that the vesting declaration procedure operates satisfactorily in practice? If not, what problems arise and how should they be addressed?

(2) In particular, do consultees agree with our analysis of the operation of the vesting declaration procedure in relation to easements and other rights over subject land?