Hillingdon London Borough Council v ARC Ltd

Compulsory purchase — Compensation — Entry under section 11 of Compulsory Purchase Act 1965 — Whether claim for compensation subject to limitation period under section 9 of Limitation Act 1980 — Whether cause of action accrues on entry of acquiring authority — Whether reference to Lands Tribunal an action to recover sums On December 24 1980 the plaintiff council made a compulsory purchase order which related, inter alia, to land of which the defendant held a lease. On April 26 1982, the council entered and took possession of the defendant’s land pursuant to the service of a notice to treat and notice of intention to enter served on April 7 1982. On April 19 1982 the defendant served a notice of claim in response to the notice to treat. On January 2 1992 the defendant’s claim relating to the works carried out by the council was received by the council and rejected. On October 25 1993 a further claim was made and rejected. On September 6 1995 the defendant made a reference to the Lands Tribunal. On May 21 the Lands Tribunal declined jurisdiction to decide whether the defendant’s claim was statute-barred by section 9 of the Limitation Act 1980. The council commenced the present proceedings to have that question decided. Held: The cause of action of the defendant for the purposes of section 9 of the Limitation Act 1980 accrued on April 26 1982, on the council’s entry on the land under section 11 of the Compulsory Purchase Act 1965. Subject to any question of estoppel, the limitation period within which the defendant should have commenced an action to recover compensation had expired. Obiter: The Lands Tribunal is a court of law within the meaning of the 1980 Act and can order the payment of compensation. A reference to the Lands Tribunal is an action to recover a sum of money for the purposes of the period of limitation under the 1980 Act. The following cases are referred to in this report. Attorney-General v BBC [1981] AC 303; [1980] 3 WLR 109; [1980] 3 All ER 161, HL Central Electricity Generating Board v Halifax Corporation [1963] AC 785 China v Harrow Urban District Council [1954] 1 QB 178; [1953] 3 WLR 885; [1953] 2 All ER 1296; (1953) 51 LGR 681 Co-operative Wholesale Society v Chester le Street District Council (1996) 73 P&CR 111; [1996] 2 EGLR 143; [1996] 46 EG 158 Coburn v Colledge (1897) 1 QB 702 Pegler v Railway Executive [1948] AC 332; [1948] 1 All ER 559; (1948) 64 TLR 212, HL Scott v Avery (1856) 5 HLC 811 Swansea City Council v Glass (Executor) [1992] QB 844; [1992] 3 WLR 123; [1992] 2 All ER 680; (1992) 90 LGR 265; [1992] 1 EGLR 303 Turner v Midland Railway Co [1911] 1 KB 832 West Riding County Council v Huddersfield Corporation [1957] 1 QB 540; [1957] 2 WLR 428; [1957] 1 All ER 669; (1957) 55 LGR 153 This was the hearing of an originating summons issued by the plaintiffs, Hillingdon London Borough Council; the defendant was ARC Ltd. Joseph Harper QC (instructed by the solicitor to Hillingdon London Borough Council) appeared for the plaintiffs; Neil King (instructed by Lawrence Tucketts) represented the defendant. Giving judgment, MR STANLEY BURTON QC said: This case raises an interesting and important point of law. The sole question before me is whether a claim for compensation for compulsory purchase, resulting from the entry by an acquiring authority on land pursuant to section 11 of the Compulsory Purchase Act 1965, is subject to the limitation period laid down in section 9 of the Limitation Act 1980, notwithstanding that the amount of compensation payable has not been agreed or determined by the Lands Tribunal. It is widely assumed, on the basis of the decision of the Divisional Court in Turner v Midland Railway Co [1911] 1 KB 832, that no limitation period is applicable until the amount of compensation has been agreed or determined. For example, in Co-operative Wholesale Society v Chester le Street District Council (1996) 73 P&CR 111*, the President, Judge Bernard Marder QC, said, at p120: *Editor’s note: Also reported at [1996] 2 EGLR 143 … where an acquiring authority chooses to proceed in pursuance of a Compulsory Purchase Order by the more conventional route of a Notice to Treat followed by Notice of Entry, there is no statutory time limit for a reference of disputed compensation to the Lands Tribunal. The plaintiff contends that this assumption is incorrect. I add that there is also an issue between the parties as to whether, if the defendant’s claim for compensation would otherwise be statute-barred, by their conduct the plaintiffs have precluded themselves from relying on the limitation defence, or have waived the limitation period. That issue only arises if the plaintiffs succeed on the point of law, and will be determined subsequently if necessary. The facts The facts of this case for present purposes are not in dispute. On March 23 1972 the defendant became the lessee of land bordering the Grand Union Canal and known as the West Drayton Aggregates Depot under a lease for 35 years from December 24 1970. On December 24 1980, the plaintiffs made a compulsory purchase order which related, inter alia, to land which was part of that depot. The compulsory purchase order was the London Borough of Hillingdon Yiewsley By-Pass (Cherry Lane Roundabout to High Street Yiewsley) compulsory purchase order (No 1) 1980 (‘the compulsory purchase order’). In relation to this litigation, it involved principally land on which supports for a single carriageway road was to rest and to the airspace that the road would go through. On December 21 1981 the Secretary of State confirmed the compulsory purchase order without amendment. 22 On March 22 1982 the plaintiffs served a notice to treat in respect of the defendant’s land, and on April 7 1982 the plaintiffs served a notice of intention to enter. On April 19 1982 the defendant served a claimant’s claim in answer to notice to treat. On April 26 1982 the plaintiffs entered and commenced what are referred as ‘the Phase I Works’. (The phase II works, which involved dualling a single carriageway, came later and did not result from a compulsory acquisition.) The phase I works were completed in April 1984, and on May 11 1984 the (first) carriageway opened. On March 29 1991 the freehold reversion of land and rights relating to acquired land (and the phase II land); were conveyed to the plaintiffs by the British Waterways Board. On January 2 1992, the defendant’s claim relating to the above (phase I) works and further (phase II) works was received by the plaintiffs (and rejected). On the October 25 1993 a further claim was submitted by the defendant (and rejected by the plaintiffs). Eventually, on September 6 1995 the defendant made its reference to the Lands Tribunal. On December 12 1995, the registrar of the Lands Tribunal ordered, among other things, that the following point of law be determined, namely: (1) Whether any claim for compensation by ARC Limited arising from the exercise by the London Borough of Hillingdon of its powers under the (Compulsory Purchase Order) is now barred as a result of the provisions of (section 9(1)) of the Limitation Act, 1980. On May 21 1996, the Lands Tribunal declined jurisdiction to decide that issue. These proceedings were commenced by originating summons on July 9 1996. Statutory framework (a) Compulsory purchase The defendant’s right to compensation (in respect of the phase I works) arose under the Compulsory Purchase Act 1965, as a result of the expropriation of land by virtue of a confirmed compulsory purchase order. Section 1 of the 1965 Act provides: This Act shall apply in relation to any compulsory purchase to which Part II of the Acquisition of Land Act 1981 or Schedule 1 to that Act applies The defendant’s entitlement to compensation arose as a result of the entry on the land by the acquiring authority, on April 26 1982. Section 11 of the 1965 Act, so far as is material, is as follows: (1) If the acquiring authority have served notice to treat in respect of any of the land and have served on the owner, lessee and occupier of that land not less than fourteen days notice, the acquiring authority may enter on and take possession of that land, or of such part of that land as is specified in the notice; and then any compensation agreed or awarded for the land of which possession is taken shall carry interest … from the time of entry until the compensation is paid, or is paid into court in accordance with this Act. … (2) The acquiring authority may also enter on and take possession of any of the land by following the procedure in Schedule 3 to this Act. (3) … (4) Except as provided by the foregoing provisions … the acquiring authority shall not, except with the consent of the owners and occupiers, enter on any of the land subject to compulsory purchase until the compensation payable for the respective interests in that land has been agreed or awarded, and has been paid … Schedule 3 to the 1965 Act provides an alternative procedure for obtaining right of entry. Basically this involves the acquiring authority securing the compensation in order to obtain entry. The security can be paid into court or a bond can be given; and the amount is such as is determined by an independent surveyor appointed by two justices of the peace. Section 7 of the 1965 Act provides: In assessing the compensation to be paid by the acquiring authority under this Act regard shall be had not only to the value of the land to be purchased by the acquiring authority, but also to the damage, if any, to be sustained by the owner of the land by reason of the severing of the land purchased from the other land of the owner, or otherwise injuriously affecting that other land by the exercise of the powers conferred by this or the special Act. In relation to disputed compensation, section 6 provides: If a person served with a notice to treat does not within twenty-one days from the service of the notice state the particulars of his claim or treat with the acquiring authority in respect of his claim, or if he and the acquiring authority do not agree as to the amount of compensation to be paid by the acquiring authority for the interest belonging to him, or which he has the power to sell, or for any damage which may be sustained by him by reason of the execution of the works, the question of disputed compensation shall be referred to the Lands Tribunal. This is consistent with section 1 of the Land Compensation Act, 1961: Where by or under any statute … land is authorised to be acquired compulsorily, any question of disputed compensation … shall be referred to the Lands Tribunal and shall be determined by the Tribunal in accordance with the following provisions of this Act. (b) Limitations It is common ground between the parties that the applicable provision of the Limitation Act 1980 is section 9(1): 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. The Compulsory Purchase Act 1965 does not contain any provision concerned expressly with limitation of actions. However, section 10 of the Compulsory Purchase (Vesting Declarations) Act 1981 provides as follows: 10 Acquiring authority’s liability arising on vesting of land (1) Where any of the land specified in a general vesting declaration has become vested in an acquiring authority by virtue of Part III of this Act, the acquiring authority shall be liable to pay the like compensation, and the like interest on the compensation agreed or awarded, as they would have been required to pay if they had taken possession of the land under section 11(1) of the Compulsory Purchase Act 1965. (2) … (3) The time within which a question of disputed compensation arising out of an acquisition of an interest in land in respect of which a notice to treat is deemed to have been served by virtue of Part III of this Act may be referred to the Lands Tribunal shall be 6 years from the date at which the person claiming compensation, or a person under whom he derives title, first knew, or could reasonably be expected to have known, of the vesting of the interest by virtue of Part III of this Act. This subsection shall be construed as one with Part I of the Limitation Act 1980. I must also mention section 3(6)(a) of the Lands Tribunal Act 1949: 3 Procedure, appeals, costs and fees … (6) Subject to the provisions of this Act, rules may be made for 10 regulating proceedings before the Lands Tribunal … and may in particular — (a) make provision — (i) … (ii) as to the time within which any proceedings before the Lands Tribunal are to be instituted; Neither the Lands Tribunal Rules 1975 nor the Lands Tribunal Rules 1996 make any such provision. The issues Mr Joseph Harper QC, for the plaintiffs, submitted that the defendant’s cause of action arose when the plaintiff entered upon and took possession of the land in question in accordance with the procedure laid down in section 11 of the 1965 Act. From that date, the defendant had a right to compensation, and indeed to interest on that compensation. The compensation to which the defendant was entitled was ‘a sum recoverable by virtue of any enactment’ within the meaning of section 9 of the Limitation Act 1980, irrespective of 23 whether the compensation had been quantified by agreement or by the Lands Tribunal, and the defendant’s cause of action accrued on the plaintiffs’ entry upon the land. It followed that an action to recover such compensation cannot be brought after the expiration of six years from the date of the plaintiffs’ entry, namely April 26 1982. On this basis, the applicable limitation period expired long ago, in 1988. Mr Neil King, for the defendant, submitted that the defendant’s cause of action was not complete, and therefore did not accrue, until the amount of its compensation was either agreed or determined by the Lands Tribunal. Until then, there is no ‘sum recoverable by virtue of any enactment’. Since there has been no such agreement or determination, and the defendant’s compensation remains unquantified, the limitation period in respect of its claim has not started to run, let alone expired. Neither of these submissions as enlarged upon in the course of argument, would if accepted produce a particularly attractive result. Mr Harper submitted that an ‘action’ within the meaning of section 9 of the Limitation Act, 1980 is an action in the High Court (or presumably in appropriate cases the county court). Since the claimant’s cause of action accrues on entry, he argued that in order to stop the limitation period from running, a claimant must issue a writ claiming his compensation from the acquiring authority before the expiration of six years from the date of entry, whether or not his claim has been referred to the Lands Tribunal. He submitted that the function of the Lands Tribunal was merely to quantify the amount of compensation, so that a writ could be issued claiming compensation in such amount as may be determined by the Lands Tribunal. In practice, no steps would normally be taken to prosecute an action so commenced prior to the decision of the Lands Tribunal, but the action could be struck out if the claimant failed diligently to seek a decision by the Lands Tribunal as to his compensation. In this way, an acquiring authority would have some sanction available to them in the event of delay on the part of a claimant in presenting or in prosecuting his claim to compensation. A writ seeking an order for the payment of a sum to be ascertained by some other tribunal would be unusual, and its issue would seem to have no point, where the defendant is necessarily a public authority, and as such certain to pay in accordance with the decision of the Lands Tribunal, except to prevent a limitation defence arising. Normally, the only issues between the parties to such litigation would be those referred to the Lands Tribunal. It is the Lands Tribunal, not the High Court, which must determine ‘the question of disputed compensation’. It follows that the action in the High Court would not result in any decision of the court on any of the issues between the parties, or, because the obligor is always a public authority, normally result in execution of any judgment obtained. It is however fair to say that in practice, if Mr Harper’s submissions represent the law, where a claim for compensation is being diligently pursued, one may expect the parties to agree to extensions of the limitation period in order to avoid the unnecessary costs of issuing and serving, and then dealing with, High Court actions. None the less, Mr Harper’s submissions involve the proposition that a claimant who has referred his claim to compensation to the Lands Tribunal, and is diligently prosecuting his reference before the Lands Tribunal, may find his claim for compensation statute-barred during the pendency of the Lands Tribunal proceedings if he fails to issue a protective writ. Given that claims for compensation for compulsory purchase are often not decided within the six-year period, if Mr Harper’s submissions are correct, section 9 of the Limitation Act 1980 is indeed a trap for the unwary. I find the consequences of Mr King’s submissions equally unattractive. If he is correct, a claimant may delay in referring his claim to compensation to the Lands Tribunal for 10 or 20 years without losing his right to make a reference. In the present case, 13 years elapsed between entry on the land and the reference to the Lands Tribunal, and if Mr King is correct, the cause of action for compensation still has not accrued. This would, in my view, be an ‘anomalous and inconvenient result’ (to adopt the words of Lopes LJ in a somewhat different context in Coburn v Colledge (1897) 1 QB 702, at p709). It is right that the acquiring authority can themselves refer his claim to the Lands Tribunal; but to expect them to do so is akin to expecting a potential defendant in ordinary litigation to issue proceedings for a declaration as to the amount of his liability. Furthermore, it is not clear why parliament should have provided for a limitation period under section 10(3) of the 1981 Act, but none otherwise. Section 10(3) of the 1981 Act suggests, however, that a reference to the Lands Tribunal stops time running in the same way that an action does in private litigation. This led me to consider whether a reference to the Lands Tribunal is, ‘An action to recover any sum recoverable by virtue of any enactment’ for the purposes of section 9 of the Limitation Act 1980. If it is, this would provide a sensible answer to the questions raised in this case. A claimant would be bound to refer any question as to his compensation to the Lands Tribunal within six years of his right to compensation accruing, and it would be unnecessary for him in addition to commence a pointless High Court action to preserve his cause of action. However, I do not have to reach a conclusion on this point. The crucial question before me is whether the defendant’s cause of action accrued in April 1982, on the plaintiffs’ entry on the land under section 11 of the 1965 Act. If it did, and if the compensation payable by the plaintiffs is a sum recoverable by virtue of an enactment, the limitation period applicable to the compensation claim has expired, because no action to recover the compensation was brought within the limitation period; and, subject to the issue of waiver, no such action can now be brought. I turn first to the authorities on the question when a cause of action accrues for the purposes of limitations. The authorities (a) Prior to the Limitation Act 1939 Mr King submitted that there is authority, binding on me, to the effect that the cause of action for compensation for compulsory purchase does not accrue until the amount of compensation is agreed or determined, namely the decision of the Divisional Court in Turner v Midland Railway Co [1911] 1 KB 832. Indeed, it is clear that it is this decision which is the basis for the common assumption to that effect. In Turner the plaintiff had been the owner of houses which had been injuriously affected, within the meaning of section 68 of the Lands Clauses Act 1845, by works carried out by the defendant under a special Act of parliament. The works had been completed in April 1903. The plaintiff made a claim for compensation for the first time in August 1909. The defendant refused to pay, and the matter went to arbitration. The arbitrator awarded £10 8s as compensation, plus costs of £79. When the plaintiff brought an action on the award in the county court, the defendant contended that the action was barred by the Statute of Limitations 1623. The county court judge held that the cause of action arose upon the presentation of the claim for compensation, and that the action was consequently brought in time. On appeal, Mr Danckwerts KC for the defendant appellant accepted that the appeal must fail. He argued, however, that the judge below had applied the wrong limitation period, and that the correct limitation period was 20 years, under the Civil Procedure Act 1833, rather than six years under the Statute of Limitations, on the basis that: The action is not brought upon the award, for the award does nothing more than fix the amount. The right of action is given by the statutes authorizing the work, and the amount when assessed becomes a statutory debt. The action is an action of debt upon the statute. But an action for a statutory debt is treated as an action of debt upon a specialty, and therefore falls within s 3 of 3 & 4 Will. 4, c. 42 [The Civil Procedure Act 1833], and not within the statute of James I. The period of limitation, therefore, is twenty years. The result is that this appeal must fail; but it is desired to have the decision put on the true ground. Perhaps not surprisingly, given that the concession that the appeal must fail, counsel for the plaintiff was not called upon. Ridley J said: 24 Mr Danckwerts has not convinced me that the Statute of Limitations applicable to this case is the 3 & 4 Will. 4, c. 42, under which the period of limitation would be twenty years instead of six. I think that we ought to hold the case to fall within the statute of James I. The effect of work being done under the authority of a statute is that any cause of action in respect of damage caused by the execution of the work is prevented from accruing, the work being made lawful. And even though the statute may incorporate s 68 of the Lands Clauses Act, that will give no cause of action in respect of the damage. That section gives, not a cause of action for a wrong, but compensation for damage by a lawful act. At the date, therefore, of the execution of the work, and down to the time of the arbitrator’s award, there is no cause of action at all to which the Statute of Limitations can apply. But on the making of the award a cause of action, in my opinion, for the first time arises. The action is founded on the award and on the award alone, and it is from the date of the award that the statute runs. Avory J said: I am of the same opinion. I agree that there was no cause of action till the award was made. The statute which empowered the defendants to do the work did not give rise to any cause of action. The defendants in doing the work did something which they were authorized to do. All that s 68 gave was a right to compensation, which is a very different thing from a cause of action. But until the amount of that compensation was ascertained by the award no action could be brought. With regard to the period of limitation Mr Danckwerts says that the period applicable is twenty years. With that I cannot agree. Given the concession by the appellant that the appeal must fail, I am not sure that the judgments in Turner are binding authority. But in any event, it is impossible to understand them without appreciating the provisions of the Statute of Limitations then in force. Section 3 of the statute imposed a limitation period of six years for, among other things, ‘all Actions of Trespass, … all Actions … upon the Case, all Actions of Debt grounded upon any Lending or Contract without Specialty’. Once the court had decided that the plaintiffs’ claim did not come within the Civil Procedure Act 1833, debt was the only head under which her cause of action could come. There was no 5 equivalent of section 9 of the 1980 Act. Compensation for a lawful act, as Ridley J put it, was not a cause of action for the purposes of the Statute. As Avory J put it: All that s 68 gave was a right to compensation, which is a very different thing from a cause of action. The causes of action to which Avory J was referring were those set out in the Statute 10 of Limitations. A debt is necessarily a liquidated sum. It followed that there could be no completed cause of action, among those set out in the Statute of Limitations, until the compensation was quantified. However, a right to compensation may be a right to a ‘sum recoverable by virtue of (an) enactment’ within the meaning of section 9 of the Limitation Act, 1980, and if it 15 is, there is a cause of action for the purposes of section 9 of the 1980 Act. Turner cannot be authority on this question, since there was no such provision when it was decided. Mr Harper sought to distinguish Turner on the additional ground that it was a decision on compensation for injurious affection, rather than for the taking of land by compulsory purchase. I do not think that this is a valid ground for distinguishing that case from the present. In cases of injurious affection, as in cases of taking of land, it is possible to identify when the event giving rise to the right to compensation occurs, and in both cases the claim for compensation is unquantified until agreed or determined by the appropriate tribunal. I therefore turn to consider the authorities on section 9 and its precursors. (b) Authorities on the Limitation Acts 1939 and 1980 Section 2(1)(d) of the Limitation Act 1939 was the precursor of section 9 of the Limitation Act 1980. It provided: (1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued, that is to say: — … (d) actions to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture. Section 31(1) of the 1939 Act defined ‘action’ as follows: In this Act, unless the context otherwise requires … ‘action’ includes any proceedings in a court of law, including an ecclesiastical court; For present purposes, there is no material difference between the terms of the 1939 Act and those of the 1980 Act. The first case cited to me which was decided under the 1939 Act was Pegler v Railway Executive [1948] AC 332. In Pegler the claimant had claimed compensation on the ground that he had suffered loss as a result of the postponement of his promotion as a railway employee. The loss arose because in 1924 there had been a change in his conditions of employment, which were alleged to be contrary to the provisions of Schedule III of the Railways Act 1921. In immediate financial terms, his loss was suffered in 1933, when a man who under the original conditions of employment would have been junior to him, but who under the new conditions was senior to him, was promoted to be a driver, whereas the claimant was not so promoted until 1936. Schedule III created a right to compensation for his loss, and provided that any question as to whether there had been a breach of the relevant provision of the statute should be referred to statutory arbitration, and that the arbitrator should award a claimant such sum as was sufficient to compensate him for his loss. The claimant made a claim for compensation in 1942. The respondent argued that his claim was statute-barred. It was argued on behalf of the claimant that no cause of action arose until the date of the arbitration award, or when he made his claim for compensation, and at the earliest when he first suffered any financial loss, in 1933, and that he continued to suffer loss until he reached the maximum rate of pay in 1937. The House of Lords held that the claim was statute-barred. The fact that his claim was to be determined by arbitration meant that references in the 1939 Act to ’cause of action’ had to be read as ’cause of arbitration’. The claimant’s cause of action accrued when his conditions of employment were changed to his detriment, notwithstanding the difficulties of then quantifying his loss. Pegler is not authority on the meaning of ‘any sum recoverable by virtue of any enactment’, because it was common ground between the parties that the limitation period applicable to the claim was six years, and there was no discussion as to whether these words applied to the claim. In China v Harrow Urban District Council [1954] 1 QB 178, the respondent rating authority had applied to the justices for a distress warrant to recover rates which had fallen due before July 1940. Lord Goddard CJ held that the expression ‘action’ in the Limitation Act 1939 was to be widely construed, and included an application for a distress warrant. Rates were a sum payable by virtue of an enactment, and the cause of action in relation to them arose when demand was made for their payment, which was more than six years before the application for the distress warrant. Lord Goddard said, at p186: But when I find reference both to ecclesiastical courts and to all classes of arbitration in the present Act it leads me to think that the legislature meant to bring every class of litigation, before whatever tribunal it might come, within the ambit of the statute. Sellers LJ said, at p186: In this special case the question has been raised, apparently for the first time in the courts, whether the provisions of section 2(1)(d) of the Limitation Act 1939, apply to proceedings brought in a court of summary jurisdiction for the issue of a distress warrant for the recovery of rates … The main question which arises is whether the definition of ‘action’ in section 31(1) of the Act of 1939 can be applied to section 2. Section 31 (1), as far as it is material, is as follows — ‘In this Act, unless the context otherwise requires … ‘Action’ includes any proceeding in a court of law, including an ecclesiastical court.’ It was submitted on behalf of the respondents that the context in section 2 did require that some restriction should be put on the words ‘any proceeding in 25 a court of law’ because the section makes the time of limitation run from the date ‘on which the cause of action accrued,’ and it was said this was inappropriate to the procedure by which and by which alone, rates can be recovered. But whilst in the case of rates it cannot be said there is a cause of action — Liverpool Corporation v Hope [1938] 1 KB 751 — there does arise a cause of proceeding in a court of law. If the appropriate proceedings are taken to enforce a debt for rates the hearing is a judicial proceeding and not as the respondents apparently submitted before the justices a ministerial matter: Potts v Hickman [1941] AC 212. In such a judicial proceeding matters have to be proved by the applicant and issues may be raised by a person so summoned before the court. The elements for constituting a proceeding in a court of law are present. In Roberts v Metropolitan Borough of Battersea (1914) 110 LT 566 Buckley LJ said (at ibid 568): ”Proceeding’ would be a word with a larger meaning than ‘action.’ Every action is a proceeding, but it is not possible to say that every proceeding is an action.’ The definition in the Act was obviously intended to enlarge the more normal meaning of action and I do not think the context of section 2 does require that the definition of ‘action’ should not be applied to it. If the definition is applied, then the section should be read to provide that the following proceedings in a court of law shall not be brought after the expiration of six years from the date on which the cause of proceedings in a court of law accrued, that is to say, (d) proceedings in a court of law to recover any sum recoverable by virtue of any enactment. That interpretation seems to me to be in harmony with the context, not repugnant to it. In Davis v Burrell and Lane 10 CB 821, Jervis CJ said (ibid 826): ‘When a rate is duly made and published, it is the duty of the parties assessed to seek out the collector and to pay it … The statute 43 Eliz. c. 6 [Apparently a reference to the Poor Relief Act 1601] requires a personal demand before the rate can be distrained for. That shows that a demand would otherwise be unnecessary.’ The cause of the proceedings, therefore, for a rate might be said to arise when the rate is duly made and published and is not paid, but a demand as a matter of procedure has always been necessary before the recovery of the rate could be enforced. In respect of a general rate, section 7 of the Rating and Valuation Act, 1925, requires that information with respect to a number of matters shall be included in the demand note on which the general rate is levied. As proceedings cannot be taken until such a demand note has been given and the demand has not been met, I think the cause of the proceedings for a rate should be held to be the failure to pay on demand and, if I am right that section 2 can be applied to the proceedings for a distress warrant, the period of six years in which the proceedings must be taken would run from the time of the demand of the rate in question. I agree that the justices came to an incorrect decision in law and I would allow the appeal. Havers J said, at p190: In my opinion, it is clear that proceedings for the recovery of rates do not fall within the category of personal actions mentioned in section 3 of the Limitation Act, 1623, or within any other Limitation Act which was in force prior to the Act of 1939. It is perhaps somewhat surprising that, if it was intended to make a change in the law for the first time since 1601 by imposing a limitation of time upon proceedings for the recovery of rates, clearer language specifically referring to rates should not have been used in section 2 of the Limitation Act of 1939. The Act of 1939 is, however, an amending as well as a consolidating Act, and as the language used in section 2(1)(d) and section 31 is apt to cover an application to justices for the issue of a distress warrant for arrears of rates, I see no good reason why such proceedings should be excluded. My view is strengthened by a comparison between the definition of ‘action’ in section 225 of the Supreme Court of Judicature (Consolidation) Act, 1925, and in section 31 of the Limitation Act of 1939. In the former, ”Action’ means a civil proceeding commenced by writ or in such other manner as may be prescribed by rules of court, but does not include a criminal proceeding by the Crown.’ The wide words of the definition in the Limitation Act, 1939, show that it was intended to bring within the ambit of section 2 proceedings to which the term ‘action’ would not normally be appropriate. It remains to consider the meaning of ’cause of action’ if ‘action’ is to be considered as including proceedings for the recovery of rates. If the word ‘action’ is to embrace proceedings which are not actions in the ordinary sense, ’cause of action’ should, in my view, be read as ’cause of proceeding.’ The cause of the proceedings, in my opinion, accrues when a ratepayer fails to pay on demand a rate duly made and published in respect of which he has been assessed and the period of six years in which the proceedings must be taken would run from the failure to pay on demand. The judgments in China are important in two respects. First, they demonstrate the width of meaning to be given to the word ‘action’ in the Limitation Acts. Second, they show that the words ’cause of action’ must be similarly, and consequentially, widely construed. Of particular relevance in the present connection is the statement of Sellers J, at p187, that ‘whilst in the case of rates it cannot be said there is a cause of action … there does arise a cause of proceeding in a court of law’, and therefore a cause of action within the meaning of the Limitation Acts. It is to be contrasted with the statement of Avory J, in Turner, that ‘a right to compensation … is a very different thing from a cause of action’. The meaning of ’cause of action’ depends on the context, and in particular on the meaning given to ‘action’. The width and effect of section 2(1)(d) of the 1939 Act were further emphasised by the judgment of Lord Goddard CJ in West Riding County Council v Huddersfield Corporation [1957] 1 QB 540. Orders had been made under the Local Government Act 1929 transferring parts of the area of the West Riding County Council to the Borough of Huddersfield. The Local Government Act 1933 provided for there to be financial adjustment resulting from such a transfer, which in default of agreement was to be referred to arbitration. The county council presented their claim to Huddersfield more than six years after the transfer. Lord Goddard held that the arbitration was to recover a sum of money by virtue of the provisions of the 1933 Act, and was therefore statute-barred. The decision of the House of Lords in Central Electricity Generating Board v Halifax Corporation [1963] AC 785 arose from the transfer of the assets of electricity undertakings to electricity boards under the Electricity Act 1947. By the Electricity Act 1947, the assets and liabilities of electricity undertakings were transferred to electricity boards which were set up to carry on the nationalised industry. A number of local authorities, including the respondents, were electricity undertakers, and special provision was made for the separation and transfer to the boards of those parts of their assets and liabilities which pertained to their electricity undertakings. The combined effect of sections 14(1) and 15(1) of the 1947 Act was that: property held or used by the local authority wholly or mainly in their capacity as authorised undertakers, and rights, liabilities and obligations acquired or incurred by the local authority in the said capacity ‘should’ on the vesting date vest by virtue of this Act and without further assurance in such electricity board or boards as may be specified in the following provisions of this section or determined thereunder. In general the assets and liabilities vested in the appropriate area board, but under proviso (iii) to section 14(2) all investments and cash vested in the central authority, British Electricity Authority, of which the appellants were the successors. Before the ‘vesting date’, which was April 1 1948, the respondent local authority had accumulated a fund of £34,500 out of the revenues of their electricity undertaking. On March 31 1948, they transferred that fund from their electricity account to their general rate account. It would seem that they relied on some provision in a private Act. It did not appear when this first came to the knowledge of the electricity authority, but nearly three years elapsed before a claim was made that this fund had vested in the authority by virtue of the Act. The claim was denied by the respondents, but no further action was taken until January 3 1957. On that date the dispute was referred to the minister under section 15 (3), of which the relevant parts were: Any question arising under this section as to whether any property is; or was held or used by any such local authority wholly or mainly in their capacity as authorised undertakers … or whether any rights, liabilities or obligations were acquired or incurred by any such local authority in the said capacity … shall, in default of agreement, be determined by the Minister of Health … By that time more than six years had elapsed since the vesting date. The respondents contended that the appellants’ claim was barred by section 2 (l)(d) of the Limitation Act 1939. The minister held that the question whether the claim was statute-barred was not for him and he decided on September 18 1958, that this sum was held by the respondents wholly or mainly in their capacity as electricity undertakers. The respondents refused to pay this sum to the appellants 26 and on March 6 1959, the action was begun by the appellants, claiming that the sum of £34,500 due to them. The House of Lords held that the claim was statute-barred, notwithstanding that, if the question whether the money in question had been held by the respondents in their capacity as electricity undertakers had been denied by them, that question could only have been determined by the minister. The requirement of the minister’s decision was procedural rather than substantive. Lord Reid said, at p801: No new right or liability came into existence at its date (ie the date of the Minister’s decision) … the effect of the Minister’s decision was merely to prove that this sum had belonged to the appellants ever since the vesting date. It created no new right of property or chose in action: it merely enabled a pre-existing right to be enforced … If the appellants had begun an action within six years of the vesting date, and had applied to the Minister for his decision when the respondents traversed their allegation that the sum sued for had been held or used by the respondents in their capacity of electricity undertakers, proceedings in the action could, if necessary, have been stayed to await the Minister’s decision. But they did not do that and, in my judgment, this action is barred by section 2(1)(d) of the Limitation Act. The CEB case shows that a cause of action may accrue although one of the issues which may be, or is, raised as to the cause of action cannot be decided by the court before which the action must be brought. Last, I must refer to the decision of the Court of Appeal in Moore v Gadd, The Times, February 17 1997, in which it was held that proceedings under section 214 of the Insolvency Act 1986 for a declaration that a director knew or ought to have concluded that there was no reasonable prospect that a company would avoid going into insolvent liquidation and that he should make a contribution to the assets of the company were proceedings to ‘recover any sum recoverable by virtue of any enactment’ within section 9 of the Limitation Act, 1980. These authorities establish the following propositions: (1) The expression ‘action’ in section 9 is extremely wide, encompassing all proceedings in a court of law: China v Harrow Urban District Council. (2) The expression ’cause of action’ in section 9 is correspondingly wide: China v Harrow Urban District Council. (3) What may not have been a cause of action under the Statute of Limitations, 1623, may be a cause of action for the purposes of the Limitation Act 1980: China v Harrow Urban District Council. (4) The policy of the Limitation Acts, to prevent the litigation of stale claims, is equally applicable to claims against public authorities for sums payable by them pursuant to statute: the CEB case and the West Riding County Council case. (5) A cause of action may accrue for the purposes of section 9 although a constituent element of the cause of action, if disputed, may have to be determined by someone other than a court of law: the CEB case. (6) An action may be for a sum recoverable by virtue of an enactment even though the liability in question is not and cannot be quantified when the action is commenced: Moore v Gadd. Accrual of the cause of action In the light of these authorities, I turn to the issue in this case, namely when the defendant’s cause of action accrued or will accrue. It was common ground that the question when the cause of action arose depends on the true construction of the enactment which created the right to compensation, that is the 1965 Act. In this connection, see Swansea City Council v Glass (Executor) [1992] 2 All ER 680*, per Taylor LJ at p685h: *Editor’s note: Also reported at [1992] 1 EGLR 303 Where the cause of action arises from statute, the question as to what is merely procedural and what is an inherent element in the cause of action is one of construction. As is well known, the 1965 Act, like other enactments in this sphere, does not in terms confer a right to compensation. The right to compensation was effectively created by judicial decision. The 1965 Act assumes that there is a right to compensation, and section 11, with which I am primarily concerned, assumes that compensation may be awarded in respect of the land of which possession is taken. There is nothing in section 11 to suggest that the right to compensation is inchoate or incomplete, and the express provision that such compensation is to carry interest from the time of entry until the compensation is paid strongly suggests that the right to compensation accrues at the time of entry. It is true, of course, that compensation is not quantified until agreed or awarded. However, many causes of action accrue before the plaintiff is able to quantify his claim, and before a specific figure is agreed or determined for it. The authorities to which I have referred above make it clear that a ‘sum recoverable by virtue of any enactment’ need not be liquidated or quantified. Furthermore, the legislation does not suggest that the agreement of the parties as to the amount of compensation, or that the award of the Lands Tribunal, constitutes or completes the right of action. To the contrary, the wording of section 6 of the 1965 Act that ‘the question of disputed compensation shall be referred to the Lands Tribunal’ suggests a procedural provision, whereby what is alleged to be an existing right to compensation is referred for decision, rather than a substantive provision, completing an inchoate cause of action. The wording of section 10 of the 1965 Act, that in the case of a claim for compensation for injurious affection, ‘any dispute arising in relation to the compensation shall be referred to and determined by the Lands Tribunal’ is even clearer, following the wording of a typical and conventional arbitration agreement, which applies to an accrued cause of action or cause of arbitration. The is no wording suggestive of a Scott v Avery (1856) 5 HLC 811 approach. It has not been suggested that a different rule as to the accrual of a cause of action should apply under section 10 to that under section 11. I am fortified in my view that the cause of action accrues on entry by the wording of section 10 of the Compulsory Purchase (Vesting Declarations) Act 1981. It in effect treats the cause of action for compensation under that section as accruing when the land in question vests in the acquiring authority. It is inconsistent with the limitation period in relation to such compensation starting to run only when the compensation is agreed or awarded. It expressly refers to section 11 of the 1965 Act, which suggests that parliament assumed that there was no material difference between the right to compensation under section 11 of the 1965 Act and under section 10 of the 1981 Act. The only indication to the contrary is the provision of section 3(6)(a) of the Lands Tribunal Act 1949, to which I have referred above. It is however too equivocal to lead me to conclude that limitation of actions for the recovery of compensation for compulsory purchase is not subject to section 9(1) of the Limitation Act 1980. I therefore conclude, and hold, that the defendant’s cause of action accrued on April 26 1982, on the plaintiffs’ entry on the land, pursuant to section 11 of the 1965 Act. It follows that, unless by reason of its conduct the plaintiffs are not entitled to rely on section 9 of the Limitation Act, no action to recover the defendant’s compensation may now be brought. Is a reference to the Lands Tribunal ‘an action to recover’ compensation? It is on the facts of the present case unnecessary for me to decide whether it is sufficient for a claimant of compulsory purchase to refer the question of his compensation to the Lands Tribunal within six years of his claim arising in order to prevent his claim becoming statute-barred, or whether, as Mr Harper submitted, he must issue a writ in the High Court. In the present case, the defendant took neither step. It follows that any view that I express as to whether a reference to the Lands Tribunal is an action to recover compensation for the purposes of section 9 of the Limitation Act 1980 will be obiter. I raised this question with counsel after the conclusion of oral argument, but, because its resolution is unnecessary for the determination of the present case, I did not think it appropriate to involve the parties in the additional costs of a further hearing for it to be argued orally. I do, however, question whether it is necessary for High Court proceedings to be issued. In the first place, I consider that the Lands Tribunal is a court of law within the meaning of section of the 27 Limitation Act. What is a court of law, at least for the purposes of the law of contempt of court, was most recently authoritatively considered in Attorney-General v BBC [1981] AC 303. In the House of Lords, Viscount Dilhorne at p338 and Lord Edmund-Davies at p350 considered the Lands Tribunal to be a court of law. Lord Scarman, at pp359–360, formulated the test to be applied as follows: I would identify a court in (or ‘of’) law, ie a court of judicature, as a body established by law to exercise, either generally or subject to defined limits, the judicial power of the state. In this context judicial power is to be contrasted with legislative and executive (ie administrative) power. If the body under review is established for a purely legislative or administrative purpose, it is part of the legislative or administrative system of the state, even though it has to perform duties which are judicial in character. Though the ubiquitous presence of the state makes itself felt in all sorts of situations never envisaged when our law was in its formative stage, the judicial power of the state exercised through judges appointed by the state remains an independent, and recognisably separate, function of government. Unless a body exercising judicial functions can be demonstrated to be part of this judicial system, it is not, in my judgment, a court in law. In my view, the Lands Tribunal is a court of law within this test. It has a specialised and defined jurisdiction, but this does not prevent its being a court of law. Its functions, procedural rules, powers and its composition qualify it as a court of law. Furthermore, the context here is the Limitation Act 1980 rather than contempt of court, and as has been seen it contains a wide definition of a court of law. The only indication to the contrary is that the Lands Tribunal is a ‘tribunal’ designated under the Tribunals and Inquiries Act 1992, in Schedule 1, as a tribunal under the supervision of the Council on Tribunals; from which it would seem to follow that it is not one of the ‘ordinary courts of law’: see section l(l)(b). Given the width of the definition of a court of law in the Limitation Act 1980, I do not think that it follows that the Lands Tribunal cannot be a court of law for the purposes of that Act, even if it is not an ‘ordinary court of law’ (which it clearly is not) for other purposes. Is a reference to the Lands Tribunal ‘an action to recover’ compensation within the meaning of section 9(1) of the Limitation Act 1980, or only a procedural step required in order to quantify a sum to be recovered by an action before another court? Both Mr Harper and Mr King stated, and I accept, that the Lands Tribunal only quantifies a claim for compensation. This may be explicable on the basis that no order for the payment of compensation is in practice necessary because the party liable is always a public authority. However, whether a reference to the Lands Tribunal is an action for the recovery of the compensation in question depends on the procedure and powers of the tribunal, as set out in the relevant statutes and in its procedural rules. The wording of the 1965 Act and of the Land Compensation Act 1961 that the ‘question of disputed compensation’ be referred to the Lands Tribunal seems to me sufficient to enable the Lands Tribunal to make an order for payment of disputed compensation. The wording of section 10 of the 1965 Act, similar to that found in a typical arbitration clause, would also justify such an order: arbitrators regularly make enforceable awards, ordering the payment of a sum of money, in the exercise of the contractual jurisdiction created by such words. It was not suggested that these provisions deprived the High Court of jurisdiction to decide the issue raised by the originating summons. Under r 38 of the Lands Tribunal Rules 1975, which were in force at the times material to this case, section 26 of the Arbitration Act 1950 was made applicable to all proceedings in the Lands Tribunal as it applied to an arbitration. It follows that an award of compensation could have been enforced, by leave of the High Court, in the same manner as a judgment to the same effect, and, where leave was given, judgment might be entered in terms of the award. This suggests that the Lands Tribunal had power, under those rules, to award (that is to say, make an order for) the payment of compensation by an acquiring authority to a claimant: there would otherwise be no point in this provision applying to ‘all proceedings’. R 38 also made applicable to all proceedings in the Lands Tribunal sections 14 (interim awards) and 20 (interest on awards) of the Arbitration Act 1950. Section 20 of the Arbitration Act 1950 was as follows: A sum directed to be paid by an award shall, unless the award otherwise directs, carry interest as from the date of the award … Thus, the 1975 rules envisaged that the Lands Tribunal could direct that compensation be paid. The Lands Tribunal also had power, under section 4 of the Land Compensation Act 1961 and under r 56, to direct that the costs of a party be paid by the other party to the proceedings. Under the Lands Tribunal Rules 1996 (which did not apply when, as I have held, the cause of action of the defendant accrued and when it became statute-barred) the Lands Tribunal has express power to award interest in the same way as an arbitrator, and section 20 of the Arbitration Act 1950 was again applied to ‘all proceedings as they apply to an arbitration (r 32(e)). It would be strange if, having power to award interest on compensation (that is to say, to make an order that it be paid by the acquiring authority), it does not have power to award the principal sum, that is the compensation, itself. It also has power to make an order as to costs, to direct that the costs of a party be paid by the another party: r 52. R 50(3) empowers the tribunal to ‘issue an order incorporating its decision’. For reasons which are obscure, the 1996 Rules did not contain the equivalent of r 38 of the 1975 Rules, enabling an award of the Lands Tribunal to be enforced in the same way as an arbitration award. These provisions would lead me to conclude that a reference to the Lands Tribunal was, and is, ‘an action to recover’ compensation for the purposes of the Limitation Act 1980. I add that there is nothing in the Lands Tribunal Rules that would lead me to doubt my conclusion as to the accrual of the defendant’s cause of action. To the contrary, the reference in r 10(5) of the 1996 Rules to ‘A notice of reference in relation to the compensation payable on the compulsory acquisition of land’ is consistent with my conclusion. Lastly, it seems to me that section 10(3) of the Compulsory Purchase (Vesting Declarations) Act 1981, indicates that parliament assumed that the reference of a question of disputed compensation to the Lands Tribunal was the equivalent of the commencement of a High Court action for the purposes of the Limitation Act 1980. If this is the position, the law is more just and practical and consistent than it would be if the position were as suggested by Mr Harper. Assuming that an action for a declaration of the sum payable by a defendant is not an ‘action to recover’ that sum for the purposes of the Limitation Act 1980, if necessary I should have held, for the above reasons, that a reference to the Lands Tribunal is ‘an action to recover’ compensation for compulsory purchase for the purposes of section 9 of the Limitation Act 1980. I end this judgment with a plea that the law on this question be clarified as soon as possible. If my decision is not appealed, the position should be clarified by legislation. It is obviously highly undesirable that there should be uncertainty as to the law and procedure on an important question affecting rights and obligations between public authorities and the private citizen. Declaration accordingly.