Gozra v Hackney London Borough

Land Compensation Act 1973, sections 37(5) and 38(4) — Jurisdiction of Lands Tribunal to determine a dispute as to the amount of a payment under section 37(5) — Appeal by local authority against tribunal’s acceptance of jurisdiction — Section 38(4) provided that any dispute as to the amount of a disturbance payment shall be referred to and determined by the Lands Tribunal or, in Scotland, the Lands Tribunal for Scotland — The issue was as to whether the discretionary payment under section 37(5) was a ‘disturbance payment’ for this purpose — Section 37(5) covers cases where a person is displaced from land as mentioned in section 37(1) but is not entitled, as against the local authority, ‘to a disturbance payment or to compensation for disturbance under any other enactment’ It was submitted by the appellant local authority that the wording of the 1973 Act drew a clear distinction between a disturbance payment, defined in section 37(1) as one which a person displaced from land is entitled to receive, and a discretionary payment, described simply as a payment made pursuant to section 37(5) — It was contended that the jurisdiction conferred on the Lands Tribunal related only to an actual disturbance payment — The Court of Appeal rejected this submission, although the argument had ‘some sterile appeal’ — Its acceptance would have produced anomalous results, such as a remedy by way of judicial review in section 37(5) cases, ‘a remedy far inferior to an absolute right to have the amount of the payment determined by the Lands Tribunal under section 38(4)’ — As a matter of construction the three members of the Court of Appeal expressed the result in slightly varying ways, but in essence the point was the same — Section 38(4) gave the tribunal jurisdiction as to the amount of a disturbance payment — Although the authority had a discretion whether to make a payment under section 37(5) the amount of the payment had to be determined under section 38(1) to (3) — Thus the tribunal in determining the amount of a section 37(5) payment had to determine the amount of a disturbance payment, which was exactly what section 38(4) empowered it to do — Appeal dismissed No cases are referred to in this report. This was an appeal by the London Borough of Hackney against a preliminary decision by the Lands Tribunal accepting jurisdiction under section 38(4) of the Land Compensation Act 1973 in the following circumstances. The claimant, respondent to the present appeal, Mr Jagir Singh Gozra, was the weekly tenant of a house at 11 Ickburgh Road, London E5. On being rehoused he had claimed a home loss and a disturbance payment. No question arose in regard to the former. As regards the disturbance payment, it was agreed that it could only be made undersection section 37(5), but some other questions arose, including the preliminary question as to the Lands Tribunal’s jurisdiction, which the tribunal decided in favour of the claimant. D J Lamming (instructed by the solicitor’s department, Hackney Borough Council) appeared on behalf of the appellant council; R S Johnson (instructed by Clinton Davis & Co) represented the respondent claimant. Giving the first judgment at the invitation of the Master of the Rolls, NOURSE LJ said: This is an appeal by way of case stated from a decision of the Lands Tribunal (Mr W H Rees) on a question of its jurisdiction under section 38(4) of the Land Compensation Act 1973 to determine a dispute as to the amount of a payment made or decided upon under section 37(5) of that Act. Between November 1977 and February 1984 the claimant, Mr Jagir Singh Gozra, was the weekly tenant of 11 Ickburgh Road, London E5. His landlord, and the freehold owner of the property, was the London Borough of Hackney, who rehoused him elsewhere on the determination of his tenancy. On May 25 1984 the claimant, through his solicitors, made a claim to Hackney for a home loss payment under section 29 of the 1973 Act and for a disturbance payment under section 37(1). On August 14 1984 Hackney sent a cheque for £1,105 to the claimant direct, which purported to be £930 for home loss payment and £175 for disturbance payment. The claimant presented the cheque for payment without reference to his solicitors and signed a receipt acknowledging that the sum of £175 was in full settlement of the disturbance claim under section 37. No question arises in regard to the home loss payment, which has been calculated at three times the rateable value of the property, but the amount of the disturbance payment is in dispute. Indeed, on September 19 1984 the claimant’s solicitors, apparently in ignorance of the payment which had already been made to him direct, wrote to Hackney setting out details of the disturbance claim, which consisted of 12 items amounting to £1,204.57 in all. There were then nearly 18 months of correspondence, mostly on the side of the claimant’s solicitors, from which it appears that Hackney were in a state of some confusion as to the particular statutory provision under which the purported disturbance payment had been made. It is now agreed on both sides that it can only have been made under section 37(5). In any event, the dispute was referred to the Lands Tribunal by the claimant, and an interim decision, which is dated July 7 1987, was duly given. There are a number of further issues in dispute between the parties, including the question whether, having regard to the provisions of section 37(3), the claimant was entitled in law to make a claim for the payment which he has already received. That may be a question which can properly be raised in front of the Lands Tribunal in due course. It is not a question which is before us today. There is also the question whether there has already been a binding accord and satisfaction in respect of the claim for a disturbance payment by reason of the claimant’s having banked the payment of £175. That question is not before us either. As is pointed out in the decision, the Lands Tribunal took the view that the immediate and preliminary question was that of jurisdiction. Accepting the submissions which were made on that question on behalf of the claimant, the tribunal held that it did have jurisdiction, and against that holding Hackney have now appealed to this court. For the purposes of the limited question which is before us, the material provisions of sections 37 and 38 are few in number. Section 37, to which the marginal note is ‘Disturbance payments for persons without compensatable interests’, by subsection (1), provides as follows: Where a person is displaced from any land in consequence of and there are then four lettered paragraphs describing separate events he shall, subject to the provisions of this section, be entitled to receive a payment (hereinafter referred to as a ‘disturbance payment’). I need not read any more of subsection (1). I can go straight to subsection (5), which is in these terms: Where a person is displaced from any land as mentioned in subsection (1) above but is not entitled, as against the authority there mentioned, to a disturbance payment or to compensation for disturbance under any other enactment, the authority may, if they think fit, make a payment to him determined in accordance with section 38(1) to (3) below. The marginal note to section 38 is ‘Amount of disturbance payment’. Subsection (1) begins with these words: 21 The amount of a disturbance payment shall be equal to — (a)  the reasonable expenses of the person entitled to the payment in removing from the land from which he is displaced. I need not read any more of subsections (1) to (3), because I do not think that they have any relevance to the claim which is made by the claimant in this case. However, subsection (4) is crucial. It is in these terms: Any dispute as to the amount of a disturbance payment shall be referred to and determined by the Lands Tribunal . . . As to those provisions, a number of points are either not in dispute or are so clear that they do not require elaboration. First, a disturbance payment made under section 37(1) is mandatory once the necessary requirements are satisfied. Second, the power to make a payment under section 37(5) is discretionary. Third, if Hackney did make the payment under that subsection, then, in making it, they effectively exercised that discretion. Fourth, if the discretion was exercised, there is no further discretion as to the amount of the payment. It must be determined in accordance with subsections (1) to (3) of section 38. Fifth, and contrary to what was said in the Lands Tribunal’s decision, section 37(5) does not describe a payment under that subsection as ‘a disturbance payment’. It draws a distinction between a disturbance payment or compensation for disturbance on the one hand and ‘a payment . . . determined in accordance with section 38(1) to (3) below’ on the other. The basic submission of Mr Lamming on behalf of Hackney is that the 1973 Act draws a clear distinction between a disturbance payment, defined in section 37(1) as one which a person displaced from land is entitled to receive, and a discretionary payment, described simply as a payment made pursuant to section 37(5). He says that it is only a dispute as to the amount of the former payment which may be referred to and determined by the Lands Tribunal under section 38(4), which refers only to an actual disturbance payment. As a matter of cool statutory interpretation, that submission has some sterile appeal to it. But I do not think that it can be the function of the court to put such a construction on the Act unless the material provisions absolutely require it. As the Lands Tribunal pointed out, it would produce an incongruous difference of remedy for settling disputes as to the amount of section 37(1) payments on the one hand and section 37(5) payments on the other, even though they have to be determined according to precisely the same criteria. Not only would the remedy be different. In the case of a section 37(5) payment the remedy would be that of judicial review, a remedy far inferior to an absolute right to have the amount of the payment determined by the Lands Tribunal under section 38(4). I emphasise that the amount of both payments must be determined in accordance with subsections (1) to (3) of section 38 and that there is no discretion in either case. If the amount of the section 37(5) payment, as well as the decision to make it, had been discretionary, then the picture might well have been different. I think that the answer to the apparent problem presented by the wording of section 37(5) is to be found in the opening words of section 38(1): ‘The amount of a disturbance payment shall be equal to . . .’. Once a payment is, by section 37(5), to be determined in accordance with section 38(1) to (3), its amount must necessarily be the equivalent of that of a disturbance payment. On that footing the Lands Tribunal, when determining the amount of a section 37(5) payment, determines the amount of a disturbance payment, which is exactly what section 38(4) empowers it to do. Another way of looking at it is to say that the opening words of section 38(1) treat the section 37(5) payment as a disturbance payment for the purposes of that section, so that once again it falls within section 38(4). This is a short point of statutory construction. For the reasons which I have given, I would resolve it in favour of the claimant, affirm the decision of the Lands Tribunal and dismiss this appeal accordingly. Agreeing, MANN LJ said: I add a few words of my own only because we are differing from the reasoning of a very experienced member of the Lands Tribunal. The ‘disturbance payment’ is a term of art for the purposes of this fasciculus of sections (see section 37(1)). Mr Gozra was not entitled to a disturbance payment. However, the housing authority decided to exercise its discretion under the power conferred by section 37(5). I remind myself that that says: Where a person is displaced from any land as mentioned in subsection (1) above but is not entitled, as against the authority there mentioned, to a disturbance payment or to compensation for disturbance under any other enactment, the authority may, if they think fit, make a payment to him determined in accordance with section 38(1) to (3) below. Ex hypothesi a payment under section 37(5) is not a disturbance payment, for there is no entitlement to a disturbance payment. However, the payment under 37(5) is to be determined in accordance with 38(1) to (3). Sections 38(1) to (3) deal with the amount of a disturbance payment. Thus the payment under section 37 is a payment of the amount of a disturbance payment. Determination of the amount of a disturbance payment is, in my judgment, a matter squarely within section 38(4). I reach that conclusion with satisfaction, because it would seem strange if the quantification of a section 37(1) claim and of a claim under section 37(5) is referable as to the first to the Lands Tribunal and as to the second to the High Court on proceedings for judicial review. The question as to quantification is identical in each case. Also agreeing, LORD DONALDSON OF LYMINGTON MR said: The answer to the question stated by the member of the Lands Tribunal depends upon what is in dispute between Mr Gozra and the local authority. Both parties are agreed that he is not entitled to a disturbance payment as defined in section 37(1) of the Land Compensation Act 1973. Both parties are agreed that, if a discretionary payment is to be made under section 37(5), it has to be of an amount equal to a disturbance payment under section 37(1). The borough has resolved to make such a discretionary payment, and Mr Gozra says that it is inadequate because it is less than would have been payable if he had been entitled to a disturbance payment as defined under section 37(1). The issue thus is: what would have been the amount of a disturbance payment under section 37(1) if Mr Gozra had been entitled to receive such a payment?  That issue falls precisely within the terms of section 38(4) of the Act as being ‘Any dispute as to the amount of a disturbance payment’. The appeal will accordingly be dismissed. The appeal was dismissed with costs; order for legal aid taxation of the respondent’s costs; application for leave to appeal to the House of Lords refused.