The Law Commission

PART 4

TIME

4.1     In this Part, we consider two issues relating to time. First, we examine the time limits encountered during the implementation of a compulsory purchase order. We then consider the operation of limitation in relation to claims for compensation following compulsory acquisition.

(1) TIME LIMITS FOR VALIDITY

4.2     Much of this territory has already been explored by Government, although its proposals for reform of the relevant law have not yet been translated into legislation. In our Consultative Report on Procedure, we expressed our opinion that the Government's proposals were in need of some refinement.^[1] 4.3     The key time limits relate to the following stages in the process following confirmation:

(1) The time within which the compulsory purchase powers must be "exercised" (by invocation of either notice to treat or vesting declaration procedure);

(2) The time during which a notice to treat remains valid following service;

(3) The time during which a notice of entry remains valid following service.

Existing Law

Time for "exercise" of powers

4.4     A compulsory purchase order^[2] becomes operative "on the date on which notice of the confirmation or making of the order is first published" in accordance with the legislation.^[3] Notice of confirmation has to be published in one or more local newspapers "[a]s soon as may be after the order has been confirmed".^[4] 4.5     Section 4 of the Compulsory Purchase Act 1965 provides that the "powers of the acquiring authority for the compulsory purchase of the land shall not be exercised after the expiration of three years from the date on which the compulsory purchase order becomes operative." If the acquiring authority is proceeding by notice to treat, it must therefore serve notice to treat within three years of the date of publication of confirmation of the CPO ("the operative date").^[5] 4.6     If the acquiring authority is proceeding by general vesting declaration, there is some doubt as to what it must do to satisfy section 4. In Westminster City Council v Quereshi,^[6] Aldous J held that it was sufficient for the authority to serve a preliminary notice within the three-year period. In Co-operative Insurance Society v Hastings Borough Council,^[7] however, Vinelott J held that execution of the vesting declaration itself was necessary in order to keep the CPO alive. In view of this uncertainty, it is a counsel of prudence, endorsed by a Departmental circular, that the authority should execute its vesting declaration within three years of the operative date.^[8] Once a general vesting declaration has been executed no further time limits apply, subject to two minor exceptions:

(1) Notices of execution must be served in prescribed form "[a]s soon as may be" after execution;^[9]

(2) The right to enter and take possession of land subject to minor and expiring long tenancies may only be exercised after service of notice to treat in respect of the tenancy and after service on every occupier of notice of entry for a period "not being less than 14 days" from the date of such service.^[10]

Time following notice to treat

4.7     Under section 5(2A) and 5(2B) of the Compulsory Purchase Act 1965, notice to treat ceases to have effect at the end of three years beginning with the date of its service, unless one of the following has happened:

(1) Compensation has been agreed between the parties or has been awarded, or has been paid to the claimant (or into court);

(2) A general vesting declaration has been executed;

(3) The authority has taken possession of the land specified in the notice to treat;

(4) The question of compensation has been referred to the Lands Tribunal; or

(5) The parties have agreed to extend the period of validity of the notice to treat (assuming that (1) to (4) above have not occurred).

Time following notice of entry

4.8     Service of notice of entry is governed by section 11 of the Compulsory Purchase Act 1965. Section 11(1) provides that an acquiring authority is entitled to enter on and take possession of the whole or part of any land which has been the subject of notice to treat if it has served "not less than fourteen days notice" on "the owner, lessee and occupier" of that land. As we indicated in our Consultative Report on Procedure,^[11] this appears to leave the authority free (within the bounds of reasonableness) to take possession at any time after service of the notice of entry, without any further notice to the persons affected. In other words, the notice of entry remains valid indefinitely.

Deficiencies

4.9     The existing law has the following deficiencies:

(1) Section 4 of the Compulsory Purchase Act 1965 does not indicate clearly how compulsory purchase powers are to be "exercised", and in particular that the time limit relates both to service of notice to treat and to execution of a general vesting declaration;

(2) The inconsistency of the decisions in the Quereshi and the Co-operative Insurance Society cases is unsatisfactory and should be resolved by statute;

(3) The current open-ended nature of notice of entry should be rectified in order to produce greater certainty for landowners and to reduce any opportunity for abuse; and

(4) The current provisions enable acquiring authorities to take six years from confirmation of the CPO to the taking of possession. This seems too long, and may provide a tacit endorsement of excessive delay in the completion of projects with risk of hardship to those whose land is being acquired or whose interests are being otherwise affected.

Government reform proposals

4.10     In response to a recommendation by CPPRAG^[12], Government consulted on the conferment on affected owners and occupiers of the right to serve a "reverse notice to treat" requiring the acquiring authority to implement the order.^[13] It was, however, realised on consultation that such a reform, while enabling affected owners to seize the initiative, would have a potentially deleterious effect on the ability of authorities to carry out effective forward planning, and the proposal was accordingly dropped. 4.11     Instead, Government preferred to reduce the current time limits in an attempt to expedite the compulsory purchase process. Its most recent proposals, published in July 2002, are 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. Recognising the practicalities of organising, say, a major regeneration scheme, we feel that this reduction in time represents a fair balance between the interests of acquiring authorities and of those whose property is to be acquired.^[14]

4.12     In its earlier proposals, DTLR had suggested that the period from notice to treat to taking possession "should be reduced to a norm of one year", with the proviso that it could be extended to three years by the minister at confirmation stage or generally by agreement of the parties.^[15] The proposals were silent, however, as to the period for validity of notice of entry once served. 4.13     Government clarified its position in July 2002:

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.^[16]

Provisional proposals

4.14     In our Consultative Report on Procedure we suggested that ODPM's proposals could be further refined as follows.

Validity of CPO

4.15     We proposed that a CPO should cease to have effect at the end of 18 months from the "operative date" rather than from the date of confirmation.^[17] This would allow for any legal challenge which might first be made to the order.^[18]

Vesting declaration

4.16     We proposed that legislation should indicate clearly that a CPO was implemented (and that powers were therefore being "exercised", thereby engaging section 4 of the Compulsory Purchase Act 1965) by service of notice to treat or by execution of a vesting declaration.^[19] This would resolve the current conflict of authority and overturn the decision in Westminster City Council v Quereshi.^[20]

Notice to treat

4.17     We proposed the adoption of the Government's approach that a notice to treat should cease to have effect at the end of 18 months from the date of its service, save where compensation has been agreed or awarded or has been paid or paid into court, a vesting declaration has been executed, notice of entry has been served or the question of compensation has been referred to the Lands Tribunal.^[21]

Notice of entry

4.18     We proposed the imposition of a time limit on notice of entry: that it should take effect two months from the date of its service (an automatic fixed period) and be valid for one month, during which period the acquiring authority must take possession. If possession is not taken during that period, the notice of entry would cease to have effect, and the authority would be precluded from serving further notice.^[22]

Time extension

4.19     We proposed that all these time limits should be capable of extension by agreement between the parties, or on application to the confirming authority.^[23] In cases of particular complexity, an acquiring authority may genuinely need more time.

Consultation

4.20     In our Consultative Report on Procedure we asked consultees whether they agreed with our provisional proposals and, in particular, the issues on which we had suggested that some further clarification of the Government's proposals would be valuable.^[24] We were conscious that, in adopting the general framework envisaged by Government for compressing time limits, we were moving into an area of public policy that could prove contentious. Understandably there was a mixed response.

Validity of CPO

4.21     Around half of those responding on this issue agreed with the proposal that the current three–year time limit contained in section 4 of the 1965 Act should be reduced to eighteen months, subject, however, to the important proviso that this period could be extended by agreement where circumstances dictated. One respondent emphasised that the right to seek extension should be the same for both authority and for the landowner. Another respondent indicated that the "operative date" for a CPO should be six weeks after confirmation of the order, rather than on publication of notice of confirmation^[25] (which notice has to be published "[a]fter the order has been confirmed"^[26]). 4.22     The main expressions of dissent came from bodies which have acquiring authority status. The thrust of their concern was that, although clarity is important, a truncated time limit would not allow sufficient flexibility to authorities involved in complex land assembly projects. The Highways Agency, for example, told us that because the national road programme is constantly evolving, particular schemes could be delayed subsequent to confirmation of the CPO through insufficient funding, changes in Government policy, or even change of Government. Without reasonable time limits for implementation, some schemes would simply expire, necessitating re-making of the order once the particular problem causing delay is resolved. That would result in further delay to the particular scheme and the burdening of the taxpayer with avoidable costs. 4.23     The same point was made by other authorities who explained that the complexity of funding arrangements and of design issues for major projects could put schemes in jeopardy. Large-scale redevelopment or infrastructure projects would become increasingly difficult to deliver. London Transport Property, in particular, told us that schemes such as Crossrail could become unworkable. They cited the Jubilee Line extension and the East End Line extension projects where, because of the thousands of separate properties involved in the construction of major tunnelling, service of notice to treat had taken many months to accomplish. In the former scheme, completion of the project took over six years following service of notices to treat. In practice the placing of works contracts for a linear scheme (and the execution of those contracts) is handled in phases. Signing of contracts in order to implement development can only occur once confirmation of the order has been achieved. 4.24     The City of London Law Society suggested that, in the light of the complex funding and site assembly concerns, the minimum period for serving notice to treat (or for executing a vesting declaration) should be two years, subject to the ability to extend by agreement or on application to the minister. The Welsh Development Agency advised the same time limit.

Notice to treat

4.25     Respondents' views on this issue in the main mirrored the concerns expressed above. Those who agreed with our proposal reinforced their point that it is essential that there be provision for extension of time limits by agreement, and that the authority and the landowner have parity of right. Likewise, those who disagreed did so for the reasons already explained. The City of London Law Society suggested that the period should be two years (again with power to extend). On the other hand, the NFU suggested that the period of 18 months was too long, and that it should be reduced to 15 months (with notice of entry then having a three–month life).

Notice of entry

4.26     Those who responded in favour of our proposal repeated their concern that there should be provision for extension by agreement. The Highways Agency had reservations, however, about the practicality of effecting entry within the one–month period, particularly where a sheriff's warrant is required in order to facilitate the process.^[27] They suggested that an exception be framed to our proposal to the effect that, where entry is refused necessitating application for a warrant, there be deemed compliance with the one–month time limit where application has been made for a warrant within that month (even if execution falls outside the period). The Welsh Development Agency argued for considerably greater latitude,^[28] subject to the claimant being able to require possession by service of a seven–day counter–notice. 4.27     LT Property suggested two amendments to our proposal in order to surmount, in particular, the special engineering problems which attach to tunnelling projects:

(1) In tunnelling schemes there should be a minimum period for serving notice of entry (as now), which they suggest be one month, but there should be no maximum period for its validity;^[29]

(2) In other projects there should again be no maximum period, but it should be open to a claimant to serve counter-notice on the authority (two months after receipt of notice of entry), requiring possession to be taken in 28 days.

Time extension

4.28     There was virtual consensus on the suggestion that time limits should be capable of extension. Respondents, particularly those representing acquiring bodies, were anxious that flexibility should be built into the process to allow for complex cases. Westminster City Council indicated that if the notice of entry provisions are made immutable (with fixed minimum and maximum periods), local authorities would have significant difficulty in entering into undertakings with owners not to implement confirmed CPOs.^[30] RICS drew attention to the fact that our proposal relating to time extensions omits a requirement to justify the seeking of extension with reasons. They felt that should be rectified. 4.29     The major voice of dissent to our proposal was ODPM who suggested that, if time extensions were to be sought from the confirming authority (rather than by agreement), a statutory procedure would be required for representations to be made to, and considered by, the minister. That would be cumbersome and would lead to delays in the process.

Recommendations for reform

4.30     Ultimately the issue of whether, and if so how, CPO procedures are to be expedited is a matter of policy for Government. Insofar as new time limits are to be introduced to achieve such an objective, it is particularly difficult for the Law Commission to justify, and hence to make, precise recommendations as to the appropriate length they should attract. In formulating our recommendations we have not therefore sought to quantify precisely the appropriate time limits. We do, however, believe that reform of time limits is necessary in the following respects. 4.31     First, there is clearly a strong case for reducing the time during which an acquiring authority may implement a CPO from the three–year limit which is currently applicable. A majority of our respondents would favour a reduction of the limit to two years or less. 4.32     Secondly, we believe that there is also a strong case for reducing the time during which a notice to treat may be acted upon by an acquiring authority. Similarly, a majority of our respondents would favour a reduction of the limit to two years or less. 4.33     Thirdly, we consider that it is essential to introduce time limits to control the operation of notice of entry. In particular, a notice of entry should not remain valid irrespective of the interval of time elapsing since its service on owners and occupiers of the land. We therefore believe that a notice of entry should specify a date on which it takes effect (being a reasonable time after service) and also a date by which entry must be made and possession taken, failing which the authority will be unable to act upon the notice. 4.34     We believe that some flexibility should be introduced into the system and that it should be possible for the acquiring authority and the landowner to agree between themselves an extension of the time for acting upon a notice to treat or a notice of entry (as the case may be). We are not convinced, however, that those parties should be entitled to agree an extension of the time for implementation of the compulsory purchase order, as that order will have been confirmed by the confirming authority on the basis that the acquiring authority is expected to proceed expeditiously with the acquisition. 4.35     Finally, it would be extremely valuable to resolve those difficulties that have arisen in the interpretation of section 4 of the Compulsory Purchase Act 1965. It should be made clear that in determining whether an acquiring authority has implemented a CPO within the prescribed period, the question is whether the authority has either served notice to treat or executed a general vesting declaration.

Recommendation (11) – Time limits

(1) The powers exercisable pursuant to the compulsory purchase order should only be exercisable for a prescribed period (being less than the current period of three years) from the date on which the order becomes operative.

(2) On the expiration of the prescribed period the compulsory purchase order should cease to have effect. Section 4 of the Compulsory Purchase Act 1965 should be amended accordingly.

(3) An acquiring authority should be treated as having exercised powers by service of notice to treat or by execution of a general vesting declaration but not otherwise.

(4) A notice to treat should cease to have effect on the expiration of a prescribed period (being less than the current period of three years) from the date on which the notice to treat is served, save and insofar as it relates to land in respect of which:

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

(b) a general vesting declaration has been executed;

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

(d) reference has been made to the Lands Tribunal for determination of the compensation payable.

(5) A notice of entry should not take effect until the expiry of a prescribed period from the date on which it is served, and it should cease to have effect on the expiration of a prescribed period from the date of service, save and insofar as it relates to land in respect of which entry has been made and possession taken. Where notice of entry has expired without entry being made, it should not be permitted to serve any further notice in respect of the land to which the expired notice relates.

(6) The time limits referred to in (4) and (5) above should be capable of extension by agreement between the acquiring authority and those persons owning land or interests in land.

(2) LIMITATION PERIODS FOR COMPENSATION CLAIMS

4.36     Recent case law has emphasised the importance of making compensation claims to the Lands Tribunal within the statutory time limits. Failure to do so may result in the claim becoming statute-barred. In our Consultative Report on Procedure we considered the case for rationalising the law of limitation as it applies to the payment of compensation for compulsory purchase and made provisional proposals for reform.^[31] These proposals sought to take account not only of the existing law of limitation, primarily contained in the Limitation Act 1980, but also of the recommendations made by the Law Commission, and accepted in principle by Government, for reform of the law of limitation in our 2001 Report on Limitation of Actions.^[32]

Existing Law

4.37     The Limitation Act 1980 does not deal specifically with claims for compensation on compulsory purchase. By section 9 of that Act, however:

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.

4.38     In Hillingdon Borough Council v ARC Ltd,^[33] the Court of Appeal held that, applying section 9 of the Limitation Act 1980, references of compulsory purchase compensation claims must be made to the Lands Tribunal within six years of accrual of the cause of action. Where the acquiring authority was proceeding by notice to treat, the cause of action accrued on the date of entry upon the subject land.^[34] The same time limit applies in relation to claims for injurious affection.^[35] 4.39     The Compulsory Purchase (Vesting Declarations) Act 1981 specifically imposes a time limit for reference of a compensation claim to the Lands Tribunal where the acquiring authority is proceeding by general vesting declaration: in this case six years from the date on which the claimant (or his or her predecessor) "first knew, or could reasonably be expected to have known" of the vesting of title in the authority.^[36] Once that period has expired, the authority is wholly relieved of any obligation to pay compensation.^[37] 4.40     By section 20(1)(b) of the Limitation Act 1980, no action shall be brought to recover proceeds of the sale of land after the expiration of twelve years from the date on which the right to receive the money accrued. As a result of the operation of the "statutory contract" arising on the agreement or determination of compensation, it is thought that the claimant has twelve years from such agreement or determination to bring proceedings to recover the sum in question. 4.41     Where the acquiring authority has invoked the deed poll procedure,^[38] and has paid compensation moneys into court, it appears that potential claimants have 12 years in which to exercise their rights to take the money out. Section 29 of the Local Government (Miscellaneous Provisions) Act 1976 (applicable only to local authorities) provides that, once 12 years have elapsed since the date of payment into court, the acquiring authority may apply for unclaimed compensation to be paid out to them. The court does, however, have a discretion, exercisable after the 12 year period, to order payment of such sum as it considers just to persons who would previously have been entitled.^[39]

Law Commission Report on Limitation of Actions (2001)

4.42     The Law Commission's 2001 Report on Limitation of Actions was published with a draft Bill annexed in June of that year.^[40] No specific recommendations were made on the law of limitations as it applies to compensation for compulsory purchase. 4.43     The 2001 Report recommended replacing the present statutory time limits with a "core regime", based on a "primary limitation period" of three years, running from the date when the claimant knows (or ought reasonably to know) of the facts giving rise to the claim. This core regime was however to be subject to a "long-stop limitation period" of ten years from the accrual of the cause of action.^[41] 4.44     Pursuant to the recommendations, claims arising from a statute (such as those for compensation for compulsory purchase) would be subject to the "core regime", with a primary limitation period of three years.^[42] Claims to recover the proceeds of sale of land would not be subject to the "primary" period, but would be subject to the "long-stop" period, which would run from the date on which the vendor became entitled to recover the proceeds.^[43] 4.45     At the date of publication of the 2001 Report, the compulsory purchase project was in its infancy, no more than a preliminary "scoping" study having been published. It did not therefore seem appropriate to make recommendations in relation to compulsory purchase and limitation in advance of completion.^[44] However, in the light of comments made by consultees we did agree "with some hesitation" that claims under the Compulsory Purchase (Vesting Declarations) Act 1981 should be excluded from the core regime. We also recommended that claims under section 32 of the Land Compensation Act 1973 should be brought within that regime.^[45] 4.46     On 16 July 2002 it was announced that Government accepted in principle the Law Commission's recommendations relating to limitation of actions, and that it would "give further consideration to some aspects of the report, with a view to introducing legislation when an opportunity arises."^[46] At the date of writing this Report no such legislation has been introduced.

Deficiencies

4.47     In our Consultative Report on Procedure we highlighted the anomaly, brought to our attention by consultation responses on the Limitation of Actions project, that there is a specific statutory time limit for compensation claims under the vesting declarations procedure, but no such specific time limit where the authority is proceeding by way of notice to treat.^[47] Although in Hillingdon Borough Council v ARC Ltd^[48] the Court of Appeal held that, following notice to treat and entry, a compensation claim under section 11 of the Compulsory Purchase Act 1965 is subject to a six-year limitation period,^[49] the position remains unsatisfactory. Under the vesting declaration procedure, the six-year period for reference to the Lands Tribunal runs from the date of knowledge, or presumed knowledge, of vesting. By contrast, under the notice to treat route, the six years runs from the date of entry upon the subject land irrespective of the state of the claimant's knowledge.

Provisional proposals

4.48     We provisionally proposed in our Consultative Report on Procedure that the limitation periods relating to compensation under the present law should be rationalised. Our proposals were framed in the alternative, first on the basis of no change to the existing general law, and secondly on the basis of an amended law of limitations implementing our recommendations in the 2001 Report. 4.49     The provisional proposals were to the following effect:

(1) For reference of compensation claims to the Lands Tribunal:

(a) under the existing law, a period of six years running from the date when the claimant knew, or ought reasonably to have known, of the taking of possession of the subject land or of its vesting in the acquiring authority as the case may be;

(b) under the amended law, in accordance with the "core regime", a period of three years from the date when the claimant knew or ought reasonably to have known of the taking of possession or vesting, with a "long-stop" period of ten years.

(2) For actions to recover compensation following determination by the Lands Tribunal, or agreement:

(a) under the existing law, a period of twelve years;

(b) under the amended law, a period of ten years;

in either case from the date of the determination or agreement.

(3) For payment out of court to a claimant of sums paid into court:

(a) under the existing law, a period of twelve years;

(b) under the amended law, a period of ten years;

in either case from the date of payment into court, but subject to the proviso that the court may order payment to a claimant where it is satisfied there are good reasons for an application not having been made within that period, or in other exceptional circumstances. ^[50]

Consultation

4.50     In our Consultative Report on Procedure we asked consultees whether there should be time limits for reference of compensation disputes to the Lands Tribunal and whether the time limits should be the same under both the notice to treat and the vesting declaration procedures.^[51] 4.51     A significant majority of respondents agreed that there should be time limits for reference of claims to the Lands Tribunal so that they could not run indefinitely and that any such time limits should be standardised. Concern was expressed by the NFU that claimants should be made aware of the time limits applicable; they suggested that acquiring authorities should be under an obligation to give such information to potential claimants and to remind claimants before the limit expires. We consider that this is an important point. We believe that the authority should be obliged to provide such information, perhaps in notes of guidance accompanying the notice to treat or the vesting declaration notification. We are not convinced, however, that it is desirable to require authorities to remind claimants at any later stage, although this may be good practice. 4.52     ODPM suggested to us that, if there were to be a limitation period or periods, there should be provision for such period or periods to be extended by agreement. This approach would be preferable to the artificiality of requiring the commencement of proceedings within a time limit in circumstances where such proceedings would then be inevitably adjourned. 4.53     Although neither the Limitation Act 1980 nor the Compulsory Purchase (Vesting Declarations) Act 1981 makes express provision for mutual extension of limitation periods without the sanction of the court, we are aware that the courts have read into the legislation a power to extend limits by agreement, so long as the extension is for a reasonable period only.^[52] In Chester-le-Street DC v Co-operative Wholesale Society^[53] it was held that the time limit was procedural rather than jurisdictional, and thus was capable of being waived explicitly or by behaviour. 4.54     In its original Policy Statement, DTLR indicated that it saw some merit in the automatic reference of compensation disputes to the Lands Tribunal on expiry of a prescribed period of time.^[54] Following consultation, however, ODPM formed the view that it would be unwise to proceed with such a reform because of difficulty in formulating the appropriate trigger for automatic reference, and because acquiring authorities might be tempted to put undue pressure on claimants to settle quickly for less than their proper entitlement.^[55] We agree with this view. 4.55     We have always envisaged that the proposed rationalisation relating to referrals to the Lands Tribunal should apply both to the existing law and to any amended law based upon our 2001 recommendations. The Highways Agency expressed doubt about the "core regime", on the basis that if claimants were subject to the "primary limitation period" (three years) rather than the "long-stop" period (ten years), they would not have sufficient time to quantify all their losses adequately. Monitoring and assessing adverse effects of works on trade may take several years beyond the construction phase. Otherwise, respondents supported the policy we advanced. 4.56     An additional issue was raised concerning the interrelationship of statutory limitation and the deed poll procedure contained in section 9 of the Compulsory Purchase Act 1965. It was contended that section 9 does not make appropriate provision to ensure finality where a landowner fails to co-operate in making title or conveying. 4.57     Section 9 operates only where the authority is able to tender the "compensation agreed or awarded to be paid" leading to payment into court..^[56] If no claim has been made by the landowner, and the matter is not referred by the acquiring authority to the Lands Tribunal for determination within the limitation period,^[57] the matter then becomes statute-barred. Even though the authority has taken possession, there is no machinery available for completion of the purchase. Vesting defective title in an authority may obviously lead to practical problems at a later stage.^[58] 4.58     We do not believe that the solution is to interfere with the current limitation provisions. We consider that the appropriate reform is by imposing an obligation on the acquiring authority to refer the matter to the Lands Tribunal within the limitation period. This can best be effected by amendment of section 9 of the 1965 Act. We deal with this issue separately in our discussion of the deed poll procedure in Part 5(1) below.^[59]

Recommendations for reform

4.59     We confirm our provisional proposals and recommend accordingly that there should be standardisation of the limitation provisions as they apply to the dual implementation procedures of notice to treat and vesting declaration. Whichever implementation procedure is adopted, we recommend that the claimant should be required to claim compensation within a prescribed period of the date on which they knew (or ought to have known) of the entry upon, and taking possession of, the subject land,^[60] or of the vesting of title in the acquiring authority.^[61] The period for bringing a claim should be six years under the current limitation regime. In the event of implementation of the recommendations in the 2001 Report the period should be three years, with a "long-stop" of ten years. Once a claim has been brought, time then stops running and adjudication on the quantum of the claim (including computation of future losses) can occur outside the limitation period. 4.60     We further recommend that once compensation has been agreed or determined, the claimant should be required to recover the compensation payable within a prescribed period of the agreement or determination: 12 years under the current limitation regime, ten years under any amended law. Similar provisions should apply in relation to sums paid into court by the acquiring authority pursuant to the deed poll procedure.

Recommendation (12) – Limitation periods

(1) Where the acquiring authority has proceeded by notice to treat or by vesting declaration and compensation has not been agreed, the issue should be referred to the Lands Tribunal for determination:

(a) (under the existing law) within six years of the date when the claimant knew, or ought reasonably to have known, of the taking of possession of the subject land or its vesting in the acquiring authority; or

(b) (under the amended law) within three years of the claimant's date of knowledge, in accordance with the "core regime", with a "long-stop" period of ten years.

(2) Following agreement, or determination by the Lands Tribunal, of the amount of compensation payable by the acquiring authority, that amount should be recoverable by the claimant within:

(a) twelve years (under the existing law), or

(b) ten years (under the amended law)

of the date of agreement or determination as the case may be.

(3) Following payment of compensation into court by an authority, the claimant should apply for payment out within:

(a) twelve years (under the existing law), or

(b) ten years (under the amended law)

from the date of the payment into court, subject to the proviso that the court may order payment to a claimant subsequently where it is satisfied that there are good reasons for an application not having been made previously, or that there are other exceptional circumstances.

(4) Section 9 of the Limitation Act 1980 should be amended accordingly.

Note 1    Law Com CP No 169, Part V(2).    [Back]

Note 2    Other than an order to which the Statutory Orders (Special Procedure) Act 1945 applies.    [Back]

Note 3    Acquisition of Land Act 1981, s 26(1).    [Back]

Note 4    Ibid, s 15.    [Back]

Note 5    Grice v Dudley Corporation [1958] Ch 329.    [Back]

Note 6    (1990) 60 P & CR 380.    [Back]

Note 7    (1993) 91 LGR 608.    [Back]

Note 8    ODPM Circular 06/2004, para 63.     [Back]

Note 9    Compulsory Purchase (Vesting Declarations) Act 1981, s 6.    [Back]

Note 10    Ibid, s 9.    [Back]

Note 11    Law Com CP No 169, para 5.8. The right to serve the reverse notice to treat would arise once one year had elapsed after the confirmation of the CPO.    [Back]

Note 12    “Fundamental review of the laws and procedures relating to compulsory purchase and compensation” Final Report (DETR, July 2000).    [Back]

Note 13    Policy Statement (DTLR, December 2001), paras 3.10, 3.11 and App, paras 2.25-2.27.    [Back]

Note 14    Policy Response Document (ODPM, July 2002), para 12(iii).    [Back]

Note 15    This followed CPPRAG’s recommendations in its Final Report, para 61(i).    [Back]

Note 16    Policy Response Document, para 12(iii).    [Back]

Note 17    Law Com CP No 169, para 5.15, Proposal 5(1).    [Back]

Note 18    The “operative date” is the present trigger in the Compulsory Purchase Act 1965, s 4.    [Back]

Note 19    Law Com CP No 169, Proposal 5(2).    [Back]

Note 20    (1990) 60 P & CR 380.    [Back]

Note 21    Law Com CP No 169, Proposal 5(3). The exceptions replicate those currently contained in Compulsory Purchase Act 1965, s 5(2A): see para 3.18 and n 17, and para 4.7 above.    [Back]

Note 22    Law Com CP No 169, Proposal 5(4).     [Back]

Note 23    Law Com CP No 169, Proposal 5(5).    [Back]

Note 24    Law Com CP No 169, para 5.15, Consultation issue (G).    [Back]

Note 25    As presently provided for in the Acquisition of Land Act 1981, s 26(1).    [Back]

Note 26    Acquisition of Land Act 1981, s 15 as amended by the Planning and Compulsory Purchase Act 2004, s 100(7). The new section 15 lays down no time limit for publication, although, in respect of the new site notice, the confirming authority must maintain it in place for six weeks from “the date when the order becomes operative.” Before the section was amended by the 2004 Act it provided for newspaper publication “[a]s soon as may be after the order has been confirmed”.    [Back]

Note 27    Compulsory Purchase Act 1965, s 13. We deal with this procedure under Part 3(5) above and Recommendation 8 (refusal of entry).    [Back]

Note 28    Notice of entry having validity for up to three years.    [Back]

Note 29    LT Property argued that, in their view, claimants are unlikely to be prejudiced by delay in taking possession of subsoil.    [Back]

Note 30    We discuss the issue of undertakings in the context of abortive orders in Part 9 below.    [Back]

Note 31    Law Com CP No 169, paras 7.2-7.17.    [Back]

Note 32    Limitation of Actions (2001) Law Com No 270.    [Back]

Note 33    [1999] Ch 139.    [Back]

Note 34    The right to recover interest on the compensation sum does not accrue until the amount on which the interest is payable is awarded or agreed: Halstead v Manchester City Council [1998] 1 All ER 33 (CA).    [Back]

Note 35    See, for a recent example where the claimant unsuccessfully argued that the acquiring authority was estopped from relying on section 9 of the Limitation Act 1980, Bridgestart Properties Ltd v London Underground Ltd [2004] EWCA Civ 793.     [Back]

Note 36    Compulsory Purchase (Vesting Declarations) Act 1981, s 10(3).    [Back]

Note 37    Royal Bank of Scotland plc v Clydebank District Council [1992] SLT 356, explained in Hillingdon Borough Council v ARC Ltd [1999] Ch 139, para 36, per Potter LJ.    [Back]

Note 38    Where, for example, an owner is untraceable: see Parts 5(1) (deed poll procedure) and 5(5) (untraced owners) below.    [Back]

Note 39    Local Government (Miscellaneous Provisions) Act 1976, s 29(2).    [Back]

Note 40    Limitation of Actions (2001) Law Com No 270.     [Back]

Note 41    Law Com No 270, para 1.12.    [Back]

Note 42    Law Com No 270, paras 4.201, 4.202. The three-year limitation period would apply, without more, for referral of claims to the Lands Tribunal.    [Back]

Note 43    Law Com No 270, para 4.151.    [Back]

Note 44    Law Com No 270, para 4.285, n 333.    [Back]

Note 45    Law Com No 270, para 4.287. The reference in this paragraph to section 34 is erroneous: see Law Com CP No 169, para 7.10, n 14. Section 32 of the 1973 Act sets out the mechanics for making a claim for a statutory “home loss payment” where an individual has been displaced from their dwelling. By section 32(7A), for the purposes of the Limitation Act 1980, a person’s right of action to recover a home loss payment is deemed to accrue on the date of displacement. Section 32 does not, however, stipulate a limitation period.     [Back]

Note 46    “Government accepts law commission proposals on time limits” 16 July 2002, press release Lord Chancellor’s Department 217-02 (http://www.gnn.gov.uk/Content/Detail.asp?ReleaseID=27098&NewsAreaID=2).    [Back]

Note 47    Law Com CP No 169, para 7.13.    [Back]

Note 48    [1999] Ch 139.    [Back]

Note 49    Under Limitation Act 1980, s 9.    [Back]

Note 50    Law Com CP No 169, para 7.17, Proposal 12.    [Back]

Note 51    Law Com CP No 169, para 7.17, Consultation issue (T)(1), (2).    [Back]

Note 52    The limitation period applies only to reference for determination. Even where it expires, there is nothing to prevent the parties settling the claim by agreement or from enforcing an agreement by reference to arbitration under Lands Tribunal Act 1949, s 1(5): see BP Oil UK Ltd v Kent CC [2003] RVR 276 (CA), rather than determination under s 1(3).     [Back]

Note 53    [1998] EGCS 76 (CA). See also Bridgestart Properties v London Underground [2004] EWCA Civ 793; [2004] All ER(D) 267 (Jun) (CA) where the reference was held statute-barred.    [Back]

Note 54    Policy Statement (DTLR, December 2001), App, para 2.34. Such a reform would require amendment of the Land Compensation Act 1961, s 4. That falls outside our terms of reference: see para 1.18 above.     [Back]

Note 55    Policy Response Document (ODPM, July 2002), para 17(ii).    [Back]

Note 56    Compulsory Purchase Act 1965, s 9(1).    [Back]

Note 57    Limitation Act 1980, s 9.    [Back]

Note 58    For example, if the authority subsequently enters into leases with operating companies. It is also important that an authority does not retain indefinite contingent liabilities to pay compensation following closure of a project.    [Back]

Note 59    Paragraph 5.28 and Recommendation 13(5).    [Back]

Note 60    Where the authority is proceeding by notice to treat.     [Back]

Note 61    Where the authority is proceeding by vesting declaration.    [Back]