UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2011] UKUT 38 (LC)

LCA/435/2010

 

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPENSATION – mining subsidence – damage to residential property – repairs and remediation – Schedule of works – time taken to effect works – definition of “dwellinghouse” – entitlement to compensation – Coal Mining Subsidence Act 1991 section 6, and Coal Mining Subsidence (Blight and Compensation for Inconvenience During Works) Regulations 1994 – Regulation 7 

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN MRS KATHLEEN ROBERTS Claimant

 

and

 

THE COAL AUTHORITY Compensating

Authority

 

Re: 128 Old Penkridge Road, Cannock, Staffs

 

 

Before: P R Francis FRICS

 

 

Sitting at: 43-45 Bedford Square, London WC1B 3AS

on

24 November 2010

 

 

 

 

 

 

 

Adam Tedstone of Tedstone, George & Tedstone, solicitors of Penkridge Staffs, for the claimant

Michael Wright of DLA Piper UK LLP, solicitors of Sheffield, for the compensating authority

 

DECISION

Introduction

1.           This is a reference made on 1 June 2010 by Mrs Kathleen Roberts (the claimant), who is the owner of 128 Old Penkridge Road, Cannock, Staffs (the subject property), a dwelling in which she has resided for many years.  The claim is for compensation for inconvenience suffered during works that were undertaken by the Coal Authority (the compensating authority) to reinstate, repair and make good an area of the back garden that had suffered subsidence in February 2008.

2.           In her statement of case, the claimant said that (a) she sought an order that the Coal Authority should send a Schedule of remedial works to her pursuant to Section 6 of the Coal Mining Subsidence Act 1991 (the 1991 Act) and (b) that she reserved the right to bring a claim for compensation amounting to 10% of the cost of the works to her property estimated in that schedule under Regulation 7 of the Coal Mining Subsidence (Blight and Compensation for Inconvenience During Works) Regulations 1994 (the 1994 Regulations).  In its reply, the compensating authority asserted that a schedule of works that complied with section 6 of the 1991 Act had been served on the claimant, thus complying with the requirement of Regulation 6(1)(b) of the 1994 Regulations, but it contended that, in any event, there was no entitlement to compensation under the Regulations on two other grounds: 6(1)(a) and (d).  It suggested at the commencement of the hearing that, rather than dealing with the matter as a two-stage process in the way proposed in the statement of case, it would be proportionate to deal with all matters relating to the claimant’s entitlement to compensation at a single hearing.  At the hearing, which was heard under the Simplified Procedure (rule 28 Lands Tribunal Rules 1996, as amended), I determined that this course should be followed.

3.           Mr Adam Tedstone, a solicitor and partner in Tedstone, George & Tedstone of Penkridge Staffs, appeared for the claimant and, in response to a request from me, called Mr Reginald Kelvin Roberts, the claimant’s son, to give evidence under oath in respect of an issue that arose during the course of the hearing.  Mr Michael Wright, Legal Director of DLA Piper UK LLP, solicitors of Sheffield, appeared for the respondent and, in respect of the same issue, called Mr Lee Cammack, Deputy Operations Manager – Subsidence, for the Coal Authority who gave evidence of fact.

Statutory Provision regarding entitlement to compensation

4.     The Coal Mining Subsidence (Blight and Compensation for Inconvenience During Works) Regulations 1994 provide, where relevant:

“Interpretation

5.–  In regulations 6 and 7 “the responsible person” means, in relation to subsidence damage to a dwelling-house, the person who, by virtue of sections 43 and 44 of the Coal Industry Act 1994, is the responsible person in relation to that damage.

Entitlement to compensation

6.– (1) Subject to paragraphs (2) and (3) below, a person shall be entitled to claim compensation in accordance with regulation 7 if –

(a) he is the owner of, or any other person liable to make good in whole or in part the damage to, a dwelling-house which has been affected by subsidence damage;

(b) a schedule of remedial works has come into effect in relation to that damage and the remedial works specified in that schedule have been, or are being, carried out by or on behalf of the responsible person;

(c) the total cost of the remedial works specified in the schedule of remedial works at the time the person makes a claim under regulation 7 exceeds £3,000;

(d) the remedial works were not, or have not been, completed within 6 months from the date of their commencement; and

(e) the person has resided in the dwelling-house for a total period of 6 months during the time from the commencement of the remedial works.

(2)  There shall not be counted in the determination of any period of 6 months for the purposes of paragraph (1)(d) or (e) of this regulation or paragraph (2) of regulation 7 any period during which the carrying out of remedial works has ceased –

(a) at the request of the owner of, or any other person interested in, the dwelling-house;

(b) on account of any conduct on the part of any person residing in the dwelling-house; or

(c) in accordance with a stop notice.

(3)  Where a person has made a claim for compensation in accordance with regulation 7, there shall not be counted for the purpose of determining the period of residence in the dwelling-house in question of any other person for the purpose of paragraph (1)(e) of this regulation any period before the completion of the remedial works to which the claim of the first person referred to above relates during which the other person resides in the dwelling-house.

Payment of compensation

7.–  (1)  The responsible person shall pay to any person entitled to compensation in accordance with these Regulations, on that person making a claim in accordance with paragraph (2) below –

(a) a sum equivalent to 10 per cent of the total cost of the remedial works specified in the schedule of remedial works at the time those works are completed; and

(b) interest on the sum specified in sub-paragraph (a) above at the applicable rate(a) for the period commencing on the date on which the person claimed compensation under these Regulations and expiring on the date on which he received it.

(2)  A claim for compensation in accordance with these Regulations shall be made to the responsible person in writing after the expiry of 6 months from the date of commencement of the remedial works.

Facts

5.     The subject property comprises a detached bungalow with gardens to the rear, enclosed by panel fencing.  There is also a small, unfenced, front garden with driveway to an attached/integral garage.  The property, which is in a residential area to the west of Cannock, backs onto woodland and Cannock Park Golf Club.  It is occupied by the claimant, a widow in her 90s.  In February 2008 a large hole appeared in the rear garden in the location of a previously repaired fissure.  A section of the panel fencing on the north-western boundary fell into it, and the subsidence continued into the area of open land adjacent to, but outside the boundaries of the bungalow.

6.     On 11 February 2008, the claimant sent a Damage Notice to the Coal Authority, pursuant to section 3 of the 1991 Act.  On 4 March, the Coal Authority gave notice under section 4 agreeing that it was under a remedial obligation in respect of the damage, it being accepted that it was the “responsible person” pursuant to section 43(3) of the Coal Industry Act 1994 (the 1994 Act) in respect of any subsidence damage to the claimant’s land, within the meaning of section 1 of the 1991 Act.  It included a document dated 21 February 2008 entitled “Schedule of Accepted Liability”.  That Schedule said, in regard to the initial investigative works that its nominated contractors, Carmelor Construction, were to undertake:

“ V001 Include the following provisional sum(s) for work or costs which cannot be entirely foreseen, defined or detailed, to be expended as directed by the Engineer or Contract Administrator, deductible wholly or in part if not required.

V002 Trial hole to expose possible fissure to rock head and take further instruction from the Engineer thereafter.”

and quoted a PC (Provisional Cost) sum for those works of £2,000.

7.           The Coal Authority’s contractors subsequently commenced reparation works on 16 July 2008 and, following a meeting on 21 August 2008 between their representative and Mr Kelvin Roberts (the claimant’s son who was acting on her behalf) provided, on 26 August, a letter of comfort confirming that whilst it was not known how long the works would take, the affected areas would be reinstated on a “like for like” basis, and enclosing a set of drawings (but no costings) showing the location and design of the fissure capping works that were being undertaken over a total affected area of 940 sq m.  In response to some more specific concerns set out by Mr Roberts in a letter of 26 August, including a request that there should be “some tangible recognition” by the Coal Authority of the distress and inconvenience to his mother, Mr Cammack responded on 2 September and in respect of that point, said

“…any liability as a result of disruption to your mother’s property is covered by the Coal Mining Subsidence (Blight and Compensation for Inconvenience During Works) Regulations 1994.  Any entitlement to compensation as a result of the work will be dealt with upon the completion of the claim and I enclose a copy of the relevant sections of the Regulations for your convenience.”

8.           On 15 July 2009, following completion of the works, the claimant’s solicitor sent a letter to the Coal Authority setting out his interpretation of the relevant provisions of the 1991 and 1994 Acts, and the 1994 Regulations, and seeking a Schedule of remedial works relating to the subject property in accordance with section 6 of the 1991 Act.  It also put them on notice that it was thought that the claimant was entitled to compensation under regulation 7 of the 1994 Regulations and purported to enclose a copy of the title to the property which, in fact, was not enclosed, and sought their considered response.  On 31 July 2009, the Coal Authority responded seeking a copy of the title and clarification of some of the points that Mr Tedstone had made, but at the same timing denying that the claimant was entitled to compensation, principally because it was contended that the works to Mrs Roberts’ property were completed within the “relevant 6 month period.”  The letter also stated, at the second numbered paragraph:

“…It is not accepted that your client can claim compensation under the regulations for inconvenience during works carried out to the property not within her ownership or for which she has no liability to make good.”

9.           Completion of the whole of the works (both within and without the boundaries of the subject property) occurred by May 2009.  The claimant was provided with a copy of the final Bill of Costs, in the sum of £269,452.28, shortly before the commencement of this hearing.

Issues

10.        The issues in dispute are whether the requirements of Regulation 6(1) have been met, so as to entitle the claimant to claim compensation under Regulation 7 and specifically:

1. Is subsidence damage to a garden alone sufficient to bring an entitlement to claim pursuant to regulation 6(1)(a) of the 1994 Regulations?

2. Has a Schedule of remedial works pursuant to section 6 of the 1991 Act come into effect (regulation 6(1)(b))?

3. Were the repair works completed to the claimant’s property in accordance with Regulation 6(1)(d) within 6 months of the date of commencement: i.e., by 16 January 2009?  In determining the time taken to complete the works for the purposes of a claim pursuant to regulation 7, is it appropriate to take into account works on land outside the boundaries of the claimant’s property?

4. What was the area of the claimant’s land affected as a proportion of the whole area over which works were required?

11.        In his skeleton argument, Mr Tedstone had submitted that the key question was whether an appropriate Schedule in accordance with section 6 of the 1991 Act had been served as, without it, the Tribunal was powerless to determine the matter of compensation under Regulation 7 of the 1994 Regulations.  He said that, as to regulation 6(1)(d), and whether the works were finished within 6 months of  their commencement, as alleged by the compensating authority, this issue “…has no relevance to the matter before the Tribunal – unless and until the Schedule of Remedial Works is served, the time it took for the work to be completed is not relevant.”  However, during the hearing, he acknowledged that if I determined that the works were completed within the relevant timescale, thus meaning that the requirement under regulation 6(1)(d) has not been met, then the question of the Schedule did not need to be considered as there could be no entitlement to compensation under Regulation 7. Nevertheless, he said he thought the Tribunal should determine the Schedule issue “for the claimant’s peace of mind.”

12.        It is necessary for all five of the requirements under Regulation 6(1) to be met, and I therefore deal with the evidence and draw conclusions on the three disputed issues thereunder in turn.

The evidence and conclusions

Regulation 6(1)(a)

 

13.        It was stated by the Coal Authority that the term “dwelling house” is not defined in the 1994 Regulations.  It is defined in section 52 of the 1991 Act as meaning “any building or part of a building used wholly or partly as a private dwelling, together with any yard, garden, outhouses and appurtenances belonging to or usually enjoyed with that building or part” and that definition should prevail.  Accordingly, it was submitted that a correct interpretation of that wording meant a garden on its own does not come within the definition of a dwelling house, and could only come within that definition in conjunction with the building. Regulation 6(1)(a) requires  the dwelling house itself to be affected by subsidence damage, and as in this instance it was not, there were no grounds upon which the claim could be substantiated.  It was agreed by the claimant that the 1991 Act definition should prevail in the 1994 Regulations.  However, it was the interpretation of the precise meaning that was in issue, and it was submitted that a correct understanding was that as garden areas were plainly included within the definition, as part of a dwelling-house, then it could not be a pre-requisite that the main building had to be affected before damage to other areas could be considered. 

14.        It is agreed that the definition of dwelling-house as set out in section 52 of the 1991 Act is applicable to the 1994 Regulations.  This is undoubtedly correct.  The 1994 Regulations were made under section 25 of the 1991 Act.  Under section 11 of the Interpretation Act 1978, definitions contained in an Act apply also to regulations made under it unless the contrary intention appears, and there has been no suggestion that it did.  It is the strict interpretation of the meaning of the definition that is in issue, and whilst, as I indicated at the hearing, I inclined to prefer the claimant’s argument, there is no need for me to determine the point in the light of my conclusions upon the next point in issue.

Regulation 6(1)(b)

15.        This was the claimant’s principal issue.  It will be helpful, I think, to summarise the statutory steps that are required in the event of damage occurring to a property caused by coal mining subsidence.

16.        Part II of the 1991 Act makes provision for remedial action where subsidence damage has occurred.  “Subsidence damage” is defined by section 1(1) to mean any damage to land or to any buildings, structures or works on, in or over land caused by the withdrawal of support from land in connection with lawful coal-mining operations.

17.        Section 2 contains the duty that is placed on the Authority to take remedial action:

“(1) Subject to and in accordance with the provisions of this Part, it shall be the duty of [the Authority] to take in respect of subsidence damage to any property remedial action of one or more of the kinds mentioned in subsection (2) below.

(2)  The kinds of remedial action referred to in subsection (1) above are –

(a)     the execution of remedial works in accordance with section 7 below;

(b)     the making of payments in accordance with section 8 or 9 below in respect of the cost of remedial works executed by some other person; and

(c)     the making of a payment in accordance with section 10 or 11 below in respect of the depreciation in value of the damaged property.”

18.        Under section 3 an owner whose property is damaged by mining subsidence and who wishes to invoke the provisions relating to remedial action must give the Authority notice within 6 years of having the knowledge required to found a claim.  The notice must state that the damage has occurred and must give the prescribed particulars.  The owner must afford the Authority reasonable facilities to inspect the property. 

19.        Under section 4, as soon as reasonably practicable after receiving a damage notice, the Authority must give notice to the claimant indicating whether or not they agree that they have a remedial obligation in respect of the whole or any part of the damage specified in the damage notice.  If they indicate that they do have a remedial obligation they must state the kinds of remedial action available for meeting the obligation and which one they intend to take. Section 5 requires the compensating authority to meet their remedial obligation by taking such action.  If they could have elected to make a payment but did not do so in their notice, they may do so subsequently, but only with the agreement of the claimant.  Under section 6(1) when giving notice of proposed remedial action the Authority is required to serve a schedule of remedial works which must (under subsection (2)) specify:

“(a) the works which the Authority consider to be remedial works in relation to the damage, that is to say, such works (including works of redecoration) as are necessary in order to make good the damage, so far as it is reasonably practicable to do so, to the reasonable satisfaction of the claimant and any other person interested; and

(b)  in the case of each item of those works, the amount of the cost which the Authority consider it would be reasonable for any person to incur in order to secure that the work is executed.”

20.        The claimant may notify the Authority within 28 days of receipt that he does not agree the schedule (subsection3), and, if agreement is not reached between them within another 28 days, either of them may refer the matter to the Lands Tribunal, which may determine the works and costs to be specified in the schedule (subsection (4)).  Subsection (5) states that the Schedule comes into effect if no notification is made under ss (3) or when it is agreed under ss (4), and that it can subsequently be varied (subsection (6)).

21.        Under section 7, where the Authority are under an obligation to execute remedial works, they must do so as soon as reasonably practicable after the schedule of remedial works comes into effect.  Under section 8, if the claimant notifies the Authority that he wishes to execute any of the remedial works himself or to have them executed by a person specified, the Authority may elect to make a payment equal to the costs specified in relation to those works in the schedule.  Subsection (7) provides that the Authority must not unreasonably refuse any request to make such an election.

22.        It is common ground that the statutory steps required under sections (3) and (4) were complied with, and it is not in dispute that the works were carried out (section (5)).  It was submitted by the claimant that the schedule of accepted liability purported to have been enclosed with the compensating authority’s letter of 4 March 2008 was not a schedule of remedial works under section 6.  It did not specify the works required to make good the damage, nor the cost for each item of the works.  Although it was admitted by the compensating authority that it was not possible to ascertain the precise extent of the works required to repair the fissure at the time it was acknowledged that the Coal Authority was the “responsible person” under section 43(3) of the 1994 Act, and neither was it in a position to estimate the cost, it was denied in the reply to the claimant’s statement of case that no schedule of remedial works had been sent to the claimant.  It was argued that the 4 March letter was accompanied by a schedule of remedial works, and the claimant was subsequently provided with a plan showing the design of the fissure capping works.  Accordingly, it was denied that no schedule had been served.

23.        In my judgment, the document of 21 February 2008 entitled “Schedule of Accepted Liability” which was enclosed with the compensating authority’s letter of 4 March 2008 was not a schedule of remedial works and, as the Coal Authority admitted, it was nothing more than an instruction to the contractor to undertake initial investigations, and identified a provisional cost sum for that stage of the process alone.  The set of detailed drawings that accompanied the authority’s letter of 26 August 2008 did, in my view, comply with section 6(2)(a) but not with (b).  No breakdown of costs which “the Corporation [Authority] consider it would be reasonable for a person to expend in order to secure that the work is executed” was included. 

24.        The authority argued that it did not know how much the project would cost until the works were done, and the figure of over £269,000 related to the whole scheme of repair and could not be broken down on an individual property by property basis.  Nevertheless, the fact remains that there is an obligation upon the Coal Authority which was not complied with.  The requirement under Regulation 6(1)(b) is not, therefore, met.  There can also, now, be no question of a schedule being served as it is required to set out proposed remedial action, and that action has now been taken. 

25.        It is perhaps worth noting here that if I had found that the notice attached to the Coal Authority’s letter of 4 March 2008 constituted a compliant schedule, regulation 6(1)(c) would not have been satisfied as the estimated cost was below £3,000.

Regulation 6(1)(d)

 

26.        The question here is whether or not the works, as specified in a schedule of remedial works served in accordance with section 6(1), were completed within 6 months of their commencement.  It is, of course, only possible to identify what the remedial works were by reference to that schedule, and since there was no such schedule, there were no remedial works for the purposes of Regulation 6(1)(d).  That requirement is not, therefore, satisfied.  Thus the arguments relating to whether or not the works of repair and reparation were completed within the 6 month timescale and whether for the purposes of determining that timescale, damage over a wider area can be taken into account do not need to be considered. 

27.        However, had a schedule been served, the remedial works could only have been works to the claimant’s property (and not to other property).  If I had to determine the timescale issue I would, on the facts, incline to the conclusion that they were complete when the ground to the rear garden and boundary was made good, and not when the security fencing that encroached onto the front garden was removed.  The date upon which the works (within the boundaries of the claimant’s property) commenced was agreed to be 16 July 2008, and for there to be an entitlement to compensation they would have had to be continuing beyond 16 January 2009. The Coal Authority’s agreed bundle of documents included a series of good quality, A4 size coloured and dated photographs which clearly showed that the works of reparation, together with reinstatement of the garden and boundary fence to the rear of the bungalow, were completed by 28 November 2008 (bundle pp.35 & 36), and all that remained was a section of orange plastic fencing to prevent anyone walking on the newly laid turf.  There was in any event no issue in regard to the works at the rear, and it was common ground that they were completed well within the 6 months referred to in Regulation 6(1)(d). 

28.        The damage was described in the Damage Notice originally submitted by the claimant as “Collapse of a previously repaired fissure (Coal Authority ref: 66112 January 1999) creating a hole approx 20’ x10’ x 2’ deep on the property boundary into which fence and garden has fallen.”  It was agreed that the damaged area was the area of rear garden, and that there was no damage either to the bungalow or to the front garden.  That must, in my view, be that, and I would not accept Mr Tedstone’s protestations that as part of the front garden was not “handed back” to the claimant until much later that took the duration of works beyond the six month limit for the purposes of 6(1)(d).  It follows that the requirement under 6(1)(d) would have been complied with if a proper schedule had been served.   

29.        In the light of my findings above, it is not necessary to deal with issue 4.

30.        This decision determines the substantive issues in this reference, and I determine that in the light of these findings, the claimant is not entitled to any compensation under Regulation 7 of the 1994 Regulations.

31.        The Simplified Procedure is in general a no-costs regime, and I infer that in agreeing to it, the parties intended that no order for costs should be made.  I therefore make no such order.

DATED 28 January 2011

 

P R Francis FRICS