Cohen v London Borough of Haringey

Compulsory purchase — Question as to validity of notice to treat and notice of entry — Acquiring authority served two invalid notices to treat (invalid because served on previous owners who had sold the subject property) — Third notice to treat served on the correct person, the present appellant, but after authority had already taken possession of the land — Both notices, although served on June 24 1975, were back-dated to April 14 1975, the notice of entry being expressed to expire at midnight on April 27, the council having taken possession on April 28 — Appellant claimed that the notices were invalid, that the council had occupied the premises unlawfully and were trespassers — Held that the notice to treat, despite being back-dated, was valid at date of service and that the notice of entry was also valid, although served when the authority were already in possession — Notice of entry operated to legalise entry 14 days after service, mesne profits being payable by the authority for the period before the entry became legalised — Appellant’s claim that he was entitled to have the land returned to him (together with two houses which the authority had built upon it) rejected — Appeal dismissed, but on grounds different from those in the judge’s decision This was an appeal by the plaintiff, Stephen Cohen, from a decision of Judge Stabb QC, sitting as a High Court judge in the Queen’s Bench Division, in an action by the plaintiff against the London Borough of Haringey, the present respondents. The plaintiff claimed that, as a result of the alleged invalidity of a notice to treat and a notice of entry, the authority had entered on his land unlawfully. The judge held that the notices were bad, but decided against the plaintiff on the ground of equitable estoppel. The property which was the subject of the proceedings was a house at 29 Antill Road, Tottenham. Philip Goodenay (instructed by Nicholas & Co) appeared on behalf of the appellant; Michael Rich QC and C J Lockhart-Mummery (instructed by T F Neville, chief solicitor, Haringey Borough) represented the respondents. Giving judgment, LORD DENNING MR said: In compulsory purchase the notice to treat is vital. Halsbury, vol 8, 4th ed, paragraph 136 says: The effect of serving a notice to treat is to establish a relation analogous in some respects to that of vendor and purchaser, a relation which binds the owner of the land to give up the land subject to his being paid compensation, and which binds the undertakers or acquiring authority to take the land, but there is no contract of sale until the price is ascertained and the land remains the property of the landowner. Both parties have the right to have the price ascertained and the purchase completed in manner provided by the Lands Clauses Acts or the Compulsory Purchase Act 1965 or any Acts modifying those Acts. The rights and obligations created by the service of the notice to treat are legal as distinct from equitable, and they bind all persons claiming under the owner, whether with notice of the service or not. If a notice to treat is valid, it binds the owner. If it is invalid, or it is not served on the proper persons, it does not bind the owner. The acquiring authority cannot proceed with the acquisition. In the present case the acquiring authority, the London Borough of Haringey, served two notices to treat in succession. Each was bad because it was not served on the right persons. Then it served a third notice. This was served on the right person. But it was back-dated. The question is: Does that make it invalid?  It was served at a time when the acquiring authority was already in possession of the land. Does that make the notice to treat invalid? In 1972 there were slums in the Borough of Haringey. Many houses were unfit for human habitation. The borough council decided to clear the area under the slum clearance provisions. They made a list of the houses. They gave the preliminary notices to the owners — as at that time in 1972. In particular, they gave notice to the owners of 29 Antill Road, Tottenham. The owners at the time — in 1972 — were a Mr and Mrs Berkovitz. The house was occupied by a widow Mrs Thomas. She was a protected tenant, who paid £3.50 a week rent. Two years passed. The compulsory purchase order was confirmed on October 23 1974. But meanwhile, since 1972, there had been dealings with the house. In September 1973 Mr and Mrs Berkovitz sold the house. In September 1973 Mr and Mrs Berkovitz sold the house to a Mr Alexandros Papaioannou. In January 1974 Mr Papaioannou sold it to a Mr Stephen Cohen. Those transfers were notified to the rating department of the council. They demanded rates from those new owners: and they were duly paid. Also the agents for Mr Cohen notified the valuation department of the council that the property had been transferred to him. So the council knew perfectly well, from various notices which had been given, that the owner now was Mr Cohen. But apparently other departments of the council (especially those concerned with notices to treat) did not realise this. They did not know of the change of ownership. They went by the 1972 list. In 1974, after the compulsory purchase order was made, the council’s solicitor first served a notice to treat on Mr and Mrs Berkovitz. That was on December 9 1974. Mr and Mrs Berkovitz sent it on to their solicitors, who wrote to the council’s solicitor, saying, ‘Our clients have sold the property to Mr Alexandros Papaioannou’. So the council’s solicitor served a new notice to treat on Mr Papaioannou — thinking he was the owner. But he was not. Mr Papaioannou did not reply. So the council’s solicitor did not get to know that Mr Papaioannou had sold the house to Mr Cohen. The council’s solicitor thought the notices he had served on Mr Papaioannou were all right. The council determined to enter into possession. They gave notice to Mrs Thomas that she must go. They were ready to rehouse her. She left on April 26 1975. Mrs Thomas knew that her landlord was Mr Cohen. She told him or his agents that she was going. Then, for the first time, Mr Cohen got to know that the procedure for compulsory purchase was going forward. But he had never been served with a notice to treat or a notice of entry. So his solicitors took the point up with the council solicitor. They said that they were astonished and amazed that the council had gone into possession of Mr Cohen’s house in this way. They found out in the first week of May 1975 that the premises had been boarded up by the Borough of Haringey. Mr Cohen could not get in to do repairs. So Mr Cohen’s solicitors took the point that he had not been served with any notices at all. When the council looked into the matter, they realised they had not served the proper notices. They tried to put it right. On June 24 1975 the council tried to put everything in order. They served notice to treat and notice of entry so that they could operate thereafter the compulsory purchase procedure. I will read the important parts of the letter of June 24 1975. The borough secretary and solicitor wrote to Mr Cohen, saying: . . . As your solicitors had affirmed that you are the proper owner of the property, it appears that the position should be regularised accordingly. I therefore enclose herewith a copy of the above compulsory purchase order as confirmed . . . together with a notice to treat in respect of the above property. I will stop there. The notice to treat, which was enclosed, was a perfectly proper notice to treat to Mr Cohen saying, ‘the council are willing to treat with you for the purchase of your estate and interest in the said lands . . .’  At the bottom the date was given ‘April 14 1975′. That was wrong. It was back-dated. The true date was June 24 1975. Does that make it bad?  I think not. The body of the notice is what matters. The operative part required Mr Cohen within 21 days of the service thereof to give the particulars of his property. The letter continues: I also enclose three forms of claim, two copies of which should be completed and signed and returned to me within 21 days. I also enclose a formal notice of entry . . . . The notice of entry was enclosed, saying that the council, in exercise of the power conferred on them by section 11 of the Compulsory Purchase Act 1965, were giving notice that upon the18 expiration of 14 days from the service of the notice, they were going to enter the premises. Now they had already entered the premises. Does that make it bad?  Again I think not. That notice also was back-dated April 14. That does not matter either. In addition to the notice of entry, three forms of claim were enclosed. Mr Cohen was asked to set out the particulars of the property, the figure at which he valued it, and so forth. The letter goes on: Please note that I have back-dated both notices, so that in respect of the notice of entry, it will be deemed to have expired at midnight on April 27, the council having taken possession for the purposes of rehousing the tenant and subsequent demolition on April 28 last. Thus, from the date of such rehousing, the council will be responsible for the whole of the property actually taken and will be liable to pay interest at the appropriate rate on the compensation finally agreed from the date of entry up to the date of actual completion. In the circumstances, I look upon that part of the letter as an offer: whereby — if Mr Cohen so wished — they back-dated everything to April (the date on which they took possession), and from that date he would get interest on the purchase money. That was a very important letter. Mr Cohen’s solicitors did not reply to it until September 8. They did not take any objection to it at that stage. They said: Our client is prepared to dispose of his interest without prejudice in the sum of £8,000.00. The borough secretary and solicitor wrote back on September 12 saying: It will facilitate negotiations if full particulars of the nature of your client’s interest in the property and certain other particulars are submitted in the form of claim. Then comes the important letter of September 18 1975 from Mr Cohen’s solicitors, enclosing the completed form of claim but insisting that the notice to treat had been served not in April but on June 24. They said: We now enclose herewith claim form in answer to the notice to treat which incidentally was only served on our client on or about June 24 1975 when you have already taken possession. The form of claim, which had been filled in, also stated distinctly that the notice to treat had been served on or about June 24. They gave all the particulars of the property, and put its value at £8,000. It seems to me that Mr Cohen’s solicitors were acting very properly. They treated the notice to treat and the notice of entry as valid but insisted that they should be regarded as served on June 24 — not on April 14. In short they ignored the back-dating. They treated it as a perfectly good notice to treat served on June 24. So from 14 days after the service — that is, July 9 — the possession would be lawful. Unfortunately, thereafter there was disagreement. The parties could not agree upon the price. Then, in February 1976, the solicitors for Mr Cohen turned round and said that the council had occupied the premises unlawfully and were guilty of a trespass. In March 1976 Mr Cohen’s solicitors issued a writ against the council, saying that they had been guilty of trespass. Meanwhile the council have demolished the house and have built two new houses on the land. If Mr Cohen is right — and the property is still his — it means that, not only have the council been trespassing on the land, but that he is entitled to have the land returned to him, presumably with the houses upon it. That is the issue in the case. The judge found the notices to be bad. He said: They (the council) sought, however, to regularise the position as from April 28 by back-dating the notices. I do not think that notices in that form could be said to comply with the Act because a notice to treat must be served before entry into possession, and it was not within the defendants’ power to serve a notice to treat while in possession. So the judge held that the notices were invalid. But he went on to hold, on the ground of equitable estoppel, that Mr Cohen had so acted that he was estopped from taking advantage of the bad notices. I take a different view from the judge. In my judgment, the notice to treat was perfectly valid as at the date it was served. The date it bore at the bottom does not matter in the least. The council, on the date of service, demanded particulars of the estate and interest. They said they were willing to treat with him for the purchase of the estate, and gave him 21 days after the service of the notice. The service was on June 24. It seems to me that, although the date was April 14, nevertheless it was an effective notice to treat as at the date of its service on June 24. Then I turn to the notice of entry. Again it seems to me that that was perfectly valid. It is true that the council were already in possession on June 24. But the effect of section 11 of the 1965 Act is that, after the 14 days have expired, the possession thereafter is perfectly lawful. It would be absurd if the council had to go through the form of going out of possession for a moment on June 24 and then immediately afterwards serving a fresh notice of entry. It seems to me that a notice of entry can be served while the acquiring authority is in possession. It may be — as in this case — that the possession at that time was unlawful. Nevertheless, on the notice of entry being given, it became lawful 14 days after service. In short, section 11 protects the acquiring authority against any claim for trespass after the 14 days have expired. So it seems to me that the notice of entry was valid, and operated to legalise this entry as from July 9. Mesne profits for trespass are payable up to that date — but not thereafter. That is, in effect, the order which the judge made. It seems to me, therefore, on that ground his judgment should be upheld. It is unnecessary in these circumstances to go into the question of estoppel. If it had been necessary, I should have been disposed to agree with what the judge said, namely, having regard to the dealings which had taken place between the parties, it would be inequitable to allow Mr Cohen now to tear the whole thing up and claim the land and the properties which have been built on it. He has treated the notices as good. The council have acted on them. Having regard to the principles we stated in Crabb v Arun District Council [1976] Ch 179, equity would restore the position to what it would have been if valid notices had been served on June 24. But it is quite unnecessary to go into all that because in my opinion the notice to treat was good and the notice of entry was good as at June 24. I would dismiss the appeal accordingly. Agreeing ORMROD LJ said: I think it is important in this case to set the facts in the correct key. This is not a case of a local authority endeavouring to acquire property by manipulating its compulsory purchase powers at a price much below its true value and to take advantage of the owner of the property  On the contrary, it is precisely the opposite. The key to this case is that it was the owner of the property, the plaintiff, who has been trying to take advantage since 1975 of a mistake made by the local authority in their paperwork in connection with the acquisition of this property; a mistake for which they are of course responsible; a mistake which they should not have made, but in the circumstances it is not very difficult to understand how it came to be made. For that purpose one has to look back a little and try to keep in mind the fundamental fact of this case, which is that there was a compulsory purchase order in force covering this property, and many other properties, at all material times in this case. The council had made the original compulsory purchase order on November 27 1972; and it had been confirmed by the Secretary of State on October 23 1974. Meanwhile this property, and I dare say other properties subject to the compulsory purchase order, were changing hands in the most surprising fashion, as they were sold and bought and sold and bought. It is a remarkable fact that Mr and Mrs Berkovitz bought this property, already plainly subject to the compulsory purchase order, on April 16 1973. They got rid of it as quickly as they could and sold it to Mr Papaioannou on September 14 1973 for the same price as they paid for it; so they got out without burning their fingers. Mr Papaioannou sold it to Mr Cohen, the plaintiff in this case, in September 1974 so far as we know. But Mr Papaioannou did rather better; he got £2,900 for this property. It may be that the plaintiff did not know there was a compulsory purchase order in force. That is his affair. But, with property19 changing hands at this rate in these circumstances, it is not altogether surprising that the local authority’s solicitor’s department sometimes failed to keep up with the changes. That they ought to have done is plain, but they did not. The result was, as my Lord has said, that they served their necessary notice to treat under section 5 of the Compulsory Purchase Act 1965 and the notice of entry under section 11, firstly, on the wrong people. It is quite right to say that it seems as if Mr Cohen himself did not know that the local authority had taken possession of his property until he went one day to look at it with a builder and found that it had been boarded up to keep the vandals out because the tenant had gone. Then his solicitors wrote — perfectly sensibly — to the council protesting, as he thought, at their behaviour; and he received a letter back from the council, with which my Lord has dealt in detail and I will not repeat, which, like my Lord, I regard as a perfectly reasonable sensible letter suggesting a way of sorting out this mistake in such a way as to hurt Mr Cohen as little as possible. The object of the suggestion of back-dating the notice to treat and the notice of entry was to ante-date the date from which interest would run. The only person that would help would be Mr Cohen. Apart from that, I should have thought, speaking for myself, that it was as fair and as reasonable a way of dealing with this mistake as anyone could devise. But unfortunately Mr Cohen neither accepted the proposal nor rejected it; he did nothing for two months. Then, in a desultory kind of way he appears to have followed the procedure as if the notice to treat had been properly served. He never made any claim against the council for the possession of his property. There was not a hint of it until he finally issued a writ in March 1976 claiming possession. So we reach the absurd situation that today, if he is right, he would be entitled to an order for possession of this land on which the council have now built at least one and possibly two houses — or it may be that one house is on one bit of the land and the other house is on another bit of the land. It would produce a ridiculous situation in which Mr Cohen would be able to bargain with the council in the strongest possible way to get the maximum amount of money out of them. The normal compensation to which he would be entitled presumably, as with the other properties in the neighbourhood, would be something like £1,500. He has been trying to get £8,000 on the basis that he was selling the house with vacant possession, I suppose. So what this case is about is whether Mr Cohen should get the ordinary site value compensation for this property or some much higher sum. I entirely agree, for the reasons which my Lord has given, that the notice to treat which was served in fact on June 24, although dated April 14, was a perfectly good notice. There seems to be nothing whatever in the section to support the learned judge’s conclusion that the notice to treat must be served before entry into possession. I see nothing in the section to that effect. If it were otherwise, it would lead to some very strange conclusions; but the section is quite clear. Once the compulsory purchase order has been made, in order to start the procedure rolling notice to treat is the first step. I can see no reason why that notice to treat should not be given at any stage so long as it is not outside the time limit fixed by the Act — which was not so in this case. Consequently, it is a perfectly good notice to treat. All that remains, therefore, to be either agreed or determined by the Lands Tribunal in the event of dispute is the problem of compensation. As soon as that has been assessed, under the statute the council can execute the necessary deed to transfer the title to themselves. The only effect of not serving a notice of entry, in my judgment, is to place the defendant acquiring authority here in the position of trespassers and subject, no doubt, to a claim for damages for any loss which the plaintiff might have suffered. The only function of the notice to enter is to prevent the acquiring authority being trespassers from the moment that they enter upon the land. I am unable to see any reason why, having wrongly entered by accident, as it turned out in this case, they should not be able to put themselves right by serving a notice under section 11(1) without going through the farce of moving out of possession momentarily, whatever that might involve. It has been suggested that it might involve taking down the hoarding around the property for 14 days and then issuing the notice. For my part, I should be very reluctant to have to come to a conclusion in this day and age that the law imposes quite such a farcical formality on people who are trying to do their best in the circumstances. It is eminently desirable that this legislation should be construed reasonably and not formalistically and, for my part, I see no reason why the notice to enter was not a perfectly good notice as at the date when it was served, which was June 24. I do not find it necessary to say anything on the equitable side of this case; although, had it been necessary to do so, I, like my Lord, would have been disposed to agree with the way in which the learned judge put it in his judgment below. I agree that this appeal should be dismissed. O’CONNOR LJ also agreed. The appeal was dismissed with costs.