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 In 1980 the respondent council made a compulsory purchase order which related, inter alia, to land of which the appellants held a lease. On April 26 1982 the council entered and took possession of the appellants’ land pursuant to a notice to treat and notice of intention to enter served on April 7 1982. On April 19 1982 the appellants served a notice of claim in response to the notice to treat. On January 2 1992 the appellants’ more detailed claim in respect of the works was received by the council. That and a subsequent claim under section 52 of the Land Compensation Act 1973 were both rejected for failing to provide sufficient proof. On September 6 1995 the appellants made a reference to the Lands Tribunal. On May 21 1996 the Lands Tribunal declined jurisdiction to decide whether the appellants’ claim was statute-barred by section 9 of the Limitation Act 1980. In proceedings by the council, Mr Stanley Burnton QC (sitting as a deputy judge of the Chancery Division) decided that the appellants’ claim for compensation was time-barred. The appellants appealed. Held: The appeal was dismissed. (1) A cause of action may accrue for ‘any sum recoverable by virtue of any enactment’, for the purposes of section 9 of the Limitation Act 1980, although that sum has yet to be quantified by some process of agreement or adjudication. The right to compensation which arises as at the date of entry of the acquiring authority is an immediate right which, in the absence of agreement, can only be enforced at the suit of the claimant by initiating proceedings to quantify the sums due. That can only be done by the Lands Tribunal. Although the exercise may be simply one of quantification, it is in reality an action to recover a sum of money. The right or cause of action which arises on entry by the authority may properly be characterised as a right to be paid such compensation as may be agreed or assessed by the Lands Tribunal. (2) The Lands Tribunal is a court of law within the meaning of section 38 of the Limitation Act 1980. A reference to the Lands Tribunal by a claimant for the purposes of resolving a question of disputed compensation is an action to recover compensation within the meaning of section 9(1) of the Limitation Act 1980. 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 Farmizer (Products) Ltd, Re; Moore v Gadd [1997] 1 BCLC 589 Halstead v Manchester City Council [1998] 1 All ER 33; [1998] 1 EGLR 1; [1998] 06 EG 143 Hillingdon London Borough Council v ARC Ltd [1998] 1 WLR 174; [1997] 3 All ER 506; 96 LGR 131; [1997] 2 EGLR 21; [1997] 29 EG 125 Pegler v Railway Executive [1948] AC 332; [1948] 1 All ER 559; (1948) 64 TLR 212, HL Royal Bank of Scotland v Clydebank District Council 1992 SLT 356 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 an appeal by the defendants, ARC Ltd, against a decision of Mr Stanley Burnton QC, sitting as a deputy judge of the Chancery Division, in proceedings by an originating summons issued by the plaintiffs, Hillingdon London Borough Council. Neil King (instructed by Lawrence Tucketts, of Bristol) appeared for the appellant defendants; Joseph Harper QC (instructed by the solicitor to Hillingdon London Borough Council) appeared for the respondents. Giving the first judgment, POTTER LJ said: The question that arises upon this appeal is whether a claim for compensation for compulsory purchase resulting from entry by an acquiring authority on to land pursuant to section 11 of the Compulsory Purchase Act 1965 (the 1965 Act) is subject to the limitation period laid down in section 9 of the Limitation Act 1980 (the 1980 Act), notwithstanding that the amount of compensation payable has not been agreed or determined by the Lands Tribunal. Facts There are agreed facts in this case, which can be shortly summarised in this way. In 1972 the appellants became the lessees of land bordering the Grand Union Canal on which they operated their minerals, processing and distribution depot, known as West Drayton Aggregates Depot. The lease was for a period of 35 years from December 24 1970. In 1980 the respondents, Hillingdon London Borough Council (the authority), made the Hillingdon London Borough Council Yiewsley By-pass (Cherry Lane Roundabout to High Street Yiewsley) Compulsory Purchase Order (No 1) 1980 (the CPO). It authorised compulsory purchase of land for the Yiewsley Bypass 19 including parts of the appellants’ depot, which were required for the construction of a single carriageway flyover. In December 1981 the Secretary of State confirmed the CPO without amendment. On March 22 1982 the authority served a notice to treat in respect of the appellants’ land, followed, on April 7 1982, by a notice of intention to enter. On April 19 1982 the appellants served a claimant’s claim in answer to the notice to treat. The sum stated to be claimed by way of compensation was £400,000 plus costs. On April 26 1982 the authority entered to construct what were known as the phase 1 works, which were completed by April 1984. The carriageway was officially opened on May 11 1984. However, for reasons which need not be elaborated, no detailed claim was put forward by way of follow up to the appellants’ original claim in answer to the notice to treat, until January 2 1992 when the authority received the appellants’ claim in respect of both the phase 1 works and certain further phase 2 works carried out in the interim. That claim, and a subsequent claim under section 52 of the Land Compensation Act 1973, were both rejected by the authority for failing to provide sufficient proof to justify the appellants’ claims. A subsequent claim was made in respect of the phase 1 and phase 2 works, which was also rejected on November 9 1993. By notice dated September 6 1995, the appellants made a reference to the Lands Tribunal under section 1 of the Land Compensation Act 1961 in respect of both the phase 1 and phase 2 works. It was the authority’s case that the claim in respect of phase 1 was so stale that it was not capable of precise investigation so long after events to which it referred. On November 29 1995 the authority made an interlocutory application to the Lands Tribunal pursuant to r 49 of the Lands Tribunal Rules 1975 for a preliminary hearing on a point of law. By order dated December 12 1995, the Lands Tribunal identified one of the points of law in issue as: (1) Whether any claim for compensation by ARC Ltd arising from the exercise by the … [authority] … of its powers under the … [CPO] … is now barred as a result of the provisions of S 9 of the Limitation Act 1980. By a further order made on May 21 1996 the Lands Tribunal declined jurisdiction to decide that issue. By originating summons dated July 9 1996, the authority sought the determination of the High Court, Chancery Division, upon the issue, claiming a declaration that the claim of the appellants for compensation was time-barred under section 9 of the 1980 Act. Judge’s decision On June 12 1997 Mr Stanley Burnton QC, sitting as a deputy judge of the High Court, determined that the appellants’ claim for compensation was indeed time-barred under that section. His decision is reported at [1998] 1 WLR 174*. *Editor’s note: Also reported at [1997] 2 EGLR 21 Observing that it had been 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 the compensation has been agreed or determined, the judge held that such assumption was incorrect. He found that the appellants’ cause of action arose when the authority entered upon and took possession of the land, in accordance with the procedure laid down in section 11 of the 1965 Act, that being the day when the defendants first had a right to compensation and to interest upon the amount of such compensation. He held that the compensation to which the appellants were entitled was ‘a sum recoverable by virtue of any enactment’ within the meaning of section 9 of the 1980 Act, irrespective of whether the compensation had yet been quantified by agreement or by the Lands Tribunal and that, upon that basis, the applicable six-year limitation period expired in 1988. While it was not essential to his decision, he went on to hold that a reference to the Lands Tribunal is ‘an action to recover’ compensation for the purposes of section 9(1) of the 1980 Act. Relevant statutory provisions The appellants’ right to compensation in respect of the phase 1 works arose under section 1 of the 1965 Act, which 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 … Section 11 of the 1965 Act, so far as material, provides: (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 it 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 … Section 6 of the 1965 Act 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 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. 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. The provision in section 6 for the reference of the question of disputed compensation to the Lands Tribunal is consistent with section 1 of the Land Compensation Act 1961, which provides: 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. It is not in dispute between the parties that the provision of the Limitation Act 1980 applicable in this case is section 9, which provides: (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. (It is to be noted that the predecessor of this provision, section 2(1)(d) of the Limitation Act 1939, was to similar effect, although it contained an exception in respect of ‘a penalty or forfeiture or sum by way of penalty or forfeiture’.) By section 38 of the 1980 Act (Interpretation), previously section 31(1) of the 1939 Act: ‘action’ includes any proceeding in a court of law, including an ecclesiastical court; The 1965 Act does not contain any provision concerned expressly with limitation of actions. However, it is of interest that section 10 of the Compulsory Purchase (Vesting Declarations) Act 1981 provides as follows: Acquiring authority’s liability arising on vesting of the land. 20 (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. Finally, it is to be noted that whereas section 3(6)(a)(ii) of the Lands Tribunal Act 1949 provides that, subject to the provisions of that Act, rules may be made for regulating proceedings before the Lands Tribunal and may in particular make provision: as to the time within which any proceedings before the Tribunal are to be instituted; neither the Lands Tribunal Rules 1975 or 1996 make any such provision. The parties have treated the question to be determined under two separate heads for the purposes of their submissions. First: at what time does the cause of action accrue under section 9 of the Limitation Act 1980? Second: does section 9(1) apply to references to the Lands Tribunal? At what date does the cause of action accrue? It is not in issue between the parties that the compensation (if any) to which the appellants may be entitled is a ‘sum recoverable by virtue of any enactment’ under section 9(1) of the 1980 Act. There is also no dispute that, subject to the limitation point, the appellants are entitled to be compensated for the taking of their land pursuant to the CPO, notice to treat and notice of entry. While none of the relevant statutory provisions explicitly confers the right to compensation, that right is assumed or to be inferred from the terms of sections 6, 7, 11(1) and 11(4) of the 1965 Act, which refer variously to compensation being ‘paid’, ‘agreed’ or ‘awarded’. Finally, it is not disputed that both the authority and the appellants were entitled, in the event that the amount of compensation was not agreed, to have the disputed compensation referred to the Lands Tribunal for quantification under section 1 of the Land Compensation Act and section 6 of the 1965 Act. The rival submissions are directed to the question whether (as the authority contend) that right of the appellants itself amounts to a cause of action for the purposes of the 1980 Act (reference by the appellants to the Lands Tribunal in default of agreement in terms amounting to ‘an action to recover a sum recoverable by virtue of any enactment’), or whether (as the appellants contend) the cause of action does not arise unless, or until, the sum is quantified by agreement or decision of the Lands Tribunal. Mr Neil King, for the appellants, submits, rightly, that the answer to the question ‘when does a cause of action to recover a sum recoverable by virtue of any enactment accrue?’ is to be found in the proper construction of the statute giving the right to recover: see Swansea City Council v Glass (Executor) [1992] QB 844* per Taylor LJ at p852B–C. He goes on to submit that Turner v Midland Railway Co is authority for the proposition that the cause of action to recover compensation following the compulsory acquisition of land does not accrue until the amount of compensation has been agreed or determined. *Editor’s note: Also reported at [1992] 1 EGLR 303 The claim in Turner was for injurious affection under section 68 of the Land Clauses Act (now section 10 of the 1965 Act). Works carried out by the defendant under a special Act of parliament had been completed in April 1903, the plaintiff claiming compensation for the first time in August 1909. Upon the defendant refusing to pay, the matter went to arbitration. When the plaintiff brought an action on the award of compensation in the county court, the defendant relied on the Statute of Limitations 1623. The county court judge held that the cause of action arose upon presentation of the claim for compensation and the action had therefore been brought in time. On appeal, it was conceded that the appeal must fail. However, in the context of an argument about whether the appropriate limitation period was six years under the Statute of Limitations, as the judge had held, or 20 years under the Civil Procedure Act 1833, Ridley J observed at pp834–835: 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, to like effect, stated at p835: All that s 68 gave was 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. Mr King also relies upon the Scottish case of Royal Bank of Scotland v Clydebank District Council 1992 SLT 356. That was a case under para 36 of Schedule 24 to the Town and Country Planning (Scotland) Act 1972, a provision equivalent to section 10 of the Compulsory Purchase (Vesting Declarations) Act 1981 (the CP(VD)A), which is applicable where land is acquired by means of a general vesting declaration rather than (as in the present case) by means of a compulsory purchase order followed by entry on to the land. In such a case, section 10(3) of the CP(VD)A provides for a six-year time-limit for the reference of questions of disputed compensation to the Lands Tribunal. Section 7(1) provides that notice to treat is deemed to have been served on the date of the general vesting declaration, and section 10(1) provides that the compensation payable is the same as it would have been if possession had been taken under section 11(1) of the 1965 Act. The relevant Scottish legislation has similar provisions. In the course of holding that the obligation to pay compensation following the compulsory acquisition of land arose not out of common law but from statute, the Lord Justice Clerk stated at p361F: I do not read the legislation as imposing upon an acquiring authority an obligation to assess the amount of a claim for compensation nor to make payment of such an amount to the landowner; the obligation on the acquiring authority is an obligation to pay compensation as provided for in the statute, that is, an obligation to pay compensation where that has been agreed or assessed by the Lands Tribunal. See also per Lord McCluskey at p363L, and Lord Clyde at p367C. Mr King also relies on the decision of the Court of Appeal in Halstead v Manchester City Council [1998] 1 All ER 33*, in which it was held that the statutory right to recover interest on compensation under section 11(1) of the 1965 Act did not arise until the amount on which interest was due, was agreed or awarded. *Editor’s note: Also reported at [1998] 1 EGLR 1 On the basis of the above authorities, Mr King submits that the position is clear and that the judge was wrong to conclude that the appellants’ cause of action accrued at the time of the authority’s entry on the land pursuant to section 11 of the 1965 Act. Mr Joseph Harper QC, for the authority, on the other hand, supports the reasoning of the judge, which was to concentrate upon the wording of section 9 of the 1980 Act, which (as already noted) is in all relevant respects in the same terms as section 2(1)(d) of the Limitation Act 21 1939. He submits that various decisions in that context (see further below) make clear that the term ’cause of action’ is to be widely construed; and that it is apt to cover, and should be construed so as to cover, the right to compensation which arises following entry upon land by an acquiring authority pursuant to a notice to treat. He distinguishes the observations of the Divisional Court in Turner, on the grounds that there was no equivalent to section 9 of the 1980 Act at the time of that decision, so that the only way in which compensation could be enforced in the courts (if it could not be regarded as damages payable for some wrong) was by an action in debt (as made clear in the argument of counsel on p834). Since an action for debt could not be maintained otherwise than for a liquidated amount, the court did no more than decide that no cause of action arose in debt until the arbitrator’s award. Thus, he submits, the deputy judge in this case was right to conclude (at p182B) that: a right to compensation may be a right to a ‘sum recoverable by virtue of … [any enactment]’… within the meaning of section 9 of the Limitation Act 1980 and, if it is, there is a cause of action for the purposes of section 9 of the Act of 1980. Turner’s case cannot be authority on this question, since there was no such provision when it was decided. As to the Clydebank case, Mr Harper submits that it was principally concerned with whether or not there existed a common law right to compensation which, in circumstances where the limitation period had expired, could be relied on to ‘outflank’ the statutory scheme (including the limitation provision). He relies upon the finding that the statutory time-limit for reference to the Lands Tribunal in a vesting case was a procedural bar which did not extinguish the original right to compensation (per Lord Clyde at p367C–D), and emphasises that the decision did not determine when the petitioner’s substantive right to compensation first accrued, a point which does not appear to have been argued. As to the decision in Halstead, Mr Harper points out that the court simply held that the statutory right to interest under section 11 of the 1965 Act arose when the compensation was awarded or agreed and that it then became payable retrospectively, in respect of the period from the date when entry had occurred; the court did not purport to answer the question of when the right to compensation itself first arose or accrued. Indeed, in Halstead the Court of Appeal stated that the decision of the deputy judge in the present case was irrelevant: see p41e-g. Mr Harper submits that the judge was correct in approaching the question before him on the basis of the following propositions: 1. The expression ‘action’ in section 9 of the 1980 Act is extremely wide and encompasses all proceedings in a court of law. 2. The expression ’cause of action’ in section 9 is correspondingly wide: see China v Harrow Urban District Council [1954] 1 QB 178. (In that case the expression ‘action’ was held to include an application for a distress warrant in respect of local rates, and the ’cause of action’ was held to arise at the time demand was made for payment.) 3. What may not have amounted to a cause of action for the purposes of the Statute of Limitations 1623 (see Turner) may none the less be a cause of action for the purposes of section 9 of the 1980 Act, and indeed its predecessor, section 2(1)(d) of the 1939 Act: ibid. 4. The policy of the Limitation Acts, ie to prevent the litigation of stale claims, is equally applicable to claims against public authorities for sums payable by them pursuant to statute: Central Electricity Generating Board v Halifax Corporation [1963] AC 785 (the CEB case) and West Riding County Council v Huddersfield Corporation [1957] 1 QB 540. 5. A cause of action may accrue for the purposes of section 9 of the 1980 Act, even though a constituent element of the cause of action, if disputed, may have to be determined by someone other than a court of law: see 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: see Re Farmizer (Products) Ltd; Moore v Gadd [1997] 1 BCLC 589. Mr King does not dispute any of those six propositions, but says that neither individually nor collectively do they overcome the difficulty that the obligation of the authority is only to pay compensation once agreed or assessed by the Lands Tribunal (see the Clydebank case) and, hence, the cause of action or right to sue cannot arise before such agreement or assessment has taken place. It seems to me that a number of authorities make clear that, for the purposes of limitation, a cause of action may accrue for ‘any sum recoverable by virtue of any enactment’, although that sum has yet to be quantified by some process of agreement or adjudication. In Pegler v Railway Executive [1948] AC 332 the plaintiff claimed compensation on the ground that he had suffered loss as a result of the postponement of his promotion as a railway employee because there had been a change in his conditions of employment, which was alleged to be contrary to the provisions of Schedule III to the Railways Act 1921. That Schedule created a right to compensation for his loss and provided that any question as to whether there had been a breach of the statute should be referred to statutory arbitration, the arbitrator having power to award such sum as was sufficient to compensate the plaintiff for his loss. His loss began in 1933 when another man was promoted over him, the plaintiff not being promoted until 1936. The House of Lords held that the claim was time-barred. On the basis that the claim was required to be determined by arbitration, the reference to ’cause of action’ in the Limitation Act 1939 was read as ’cause of arbitration’. It thus followed that the plaintiff’s cause of action accrued at the time of the change in his conditions of employment notwithstanding the difficulties of quantifying the loss. In China v Harrow Urban District Council, to which I have already referred, Lord Goddard stated in relation to the 1939 Act 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 p187: 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. See also per Havers J at pp190–191. The effect of section 2(1)(d) of the 1939 Act was further considered by Lord Goddard CJ in West Riding County Council v Huddersfield Corporation [1957] 1 QB 540. In that case the plaintiff’s counsel sent to the defendant corporation for agreement claims in respect of two orders, being the proposed adjustments called for by section 151 of the Local Government Act 1933, which, in default of agreement as to any matter requiring adjustment, provided that the adjustment should be referred to arbitration. An arbitrator was appointed, before whom the corporation took the point that the claims were statute-barred as having arisen over six years before the claim was made. Lord Goddard stated at p546: In my opinion this is a money claim and the arbitration is one to recover a sum recoverable by virtue of an enactment. … [It has been] submitted that the cause of the arbitration, which would be equivalent for this purpose to a cause of action, did not arise until the parties failed to agree. I cannot think in the circumstances that that is right. There is no obligation on the parties to come to an agreement. The money was demanded by the county council more than six years after the transfer had taken place and more than six years, therefore, after the time by which they might have demanded or have required the money… In my opinion this is really, when the realities of the transaction are looked at and the documents to which I have been referred are considered, simply an action to recover a sum of money by virtue of the provisions of section 151 of the Local Government Act, 1933. Therefore, in my judgement, the answer to the arbitrator’s question is that the claim is barred by the statute, and I so declare. (Emphasis supplied.) In Central Electricity Generating Board v Halifax Corporation [1963] AC 785 a dispute arose between the plaintiffs and the defendants as to whether or not certain assets and liabilities of the defendants held in their capacity of electricity undertakers, prior to the Electricity Act 1947 coming into effect, vested in the plaintiffs on the ‘vesting date’ of April 1 1948. The defendants’ retention of a fund of £34,500 out of the revenues of their undertaking came to the knowledge of the plaintiffs, who allowed three years to elapse before making a claim that the fund had vested in them by virtue of the Act. Upon the denial of the claim by the defendants, no further action was taken until 1957 when the dispute was referred to the minister under section 15(3) of the Act, which provided for questions arising in such matters to be determined by the minister in default of agreement. By that time more than six years had elapsed since the vesting date and, upon the minister determining the question in favour of the plaintiffs, the respondents none the less refused to pay over the sum. When sued, they pleaded that the claim was barred under section 2(1)(d) of the Limitation Act 1939. The House of Lords upheld the limitation defence, holding that the requirement of the minister’s decision was procedural rather than substantive. Lord Reid stated at p801: No new right or liability came into existence at … [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, proceeding 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. Thus, it seems clear that a cause of action may accrue in respect of a right to payment of a sum pursuant to a statutory obligation, even though one of the elements of the claim or cause of action may, if disputed, have to be determined by someone other than a court of law. Finally, a striking example of the width of the court’s approach to the definition of ‘proceedings to recover any sum recoverable by virtue of any enactment’ is afforded by the recent decision of the Court of Appeal in Re Farmizer (Products) Ltd; Moore v Gadd [1997] 1 BCLC 589. In that case the court held that section 9 of the 1980 Act applied to proceedings under section 214 of the Insolvency Act 1986, for a declaration that a director was liable to make a contribution to the assets of the company, on the grounds that the director knew or ought to have concluded that there was no reasonable prospect that the company could avoid going into liquidation. A time-bar of six years from the date of liquidation was held to be applicable. In the course of his judgment, Gibson LJ said: If one asks, ‘By virtue of what is the sum of £1.25m recoverable?’, the answer would surely be: ‘By virtue of s 214’. It is of course only capable of being recovered if the court chooses to make the declaration after the statutory conditions are shown to be satisfied, but I have no difficulty in holding that s 9 of the 1980 Act applies to such a case. When considering the provisions of section 11 of the 1965 Act in the light of the authorities above cited, it does not seem to me that there is good reason to construe section 11 as giving rise to a cause of action within the meaning of section 9 of the 1980 Act only upon the agreement of the parties or the award of the Lands Tribunal. In my view, the requirement of section 6 of the 1965 Act that ‘the question of disputed compensation shall be referred to the Lands Tribunal’ is properly to be regarded as a procedural provision whereby the right to compensation is referred for quantification, rather than as an essential step without which the cause of action in respect of such compensation is inchoate or incomplete. I would adopt the approach of Lord Goddard in the West Riding case. I consider that, when the realities of the position are looked at in a case of this kind, the right to compensation which arises as at the date of entry of the acquiring authority is an immediate right which, in the absence of agreement (as to which there is no obligation upon the parties), can only be enforced at the suit of the claimant by initiating proceedings to quantify the sum due; that, in turn, can only be done by the Lands Tribunal, just as it must be done by an arbitrator in other statutory contexts. While the exercise may be simply one of quantification, it is in reality an action to recover a sum of money, namely the amount of the compensation due as assessed by the Lands Tribunal. In substance and effect the proceedings do not differ in any essential manner from any other kind of proceedings in which a claim is made on the party liable; liability is admitted or otherwise established and proceedings follow when quantum cannot be agreed. Thus, the right or cause of action which arises on entry by the authority may properly be characterised as a right to be paid such compensation as may be agreed or assessed by the Lands Tribunal. To treat the date of agreement or assessment as definitive of the point at which the claimant’s cause of action arises, seems to me to revive by the back door a distinction between debt, damages and other causes of action for statutory sums which section 2 of the Limitation Act 1939 and section 9 of the 1980 Act were intended to eliminate for the purposes of the law of limitation. The trend and weight of the authority to which I have referred are to be preferred to the observations of the Divisional Court in Turner, so far as those observations appear to lead to an opposite conclusion. It seems to me that the judge was right to treat the passages from the judgments in that case cited by Mr King as being limited to the context in which they arose, namely a situation where under the Statute of Limitations of 1623, there was no equivalent to section 9 of the 1980 Act. The question before the court in Turner was expressly argued, and implicitly decided, on the basis that any action brought could only be an action of debt, the question being whether the debt was to be treated as an ordinary debt to which the Statute of Limitations of 1623 applied, under which the limitation period was one of six years, or whether it was a debt upon a speciality, for which the limitation period was 20 years. Thus, the court held that there was no cause of action in debt until the arbitrator’s award. I agree with the judge that the case of Turner cannot be authority on the question of what amounts to a cause of action for purposes of section 9 of the 1980 Act. As to the Clydebank case, the observation of the Lord Justice Clerk to which Mr King attaches so much weight was, as submitted by Mr Harper, made in a different context, in which the mind of the court was not focused upon the question of when the claimant’s cause of action first arose for limitation purposes; rather, was it concerned with the position where a specific limitation period had admittedly expired and the question was whether some common law right to compensation could be said to survive outside the statutory regime. Reference to the relevant passage shows that the words relied on were framed so as to contrast the nature of the authority’s obligation to pay, following agreement or determination with the argument that the authority had an obligation themselves to assess the amount of the claim and make payment independently of the machinery provided in the statute. Mr King argues that the right of the claimant, and hence his cause of action, is one framed as a Hohfeldian correlative of the obligation defined by the Lord Justice Clerk. For the reasons already given, I do not agree. In this respect it is noteworthy that Lord McCluskey, at p363L, framed the obligation of the authority somewhat differently, namely: to pay as compensation such sum as might be agreed between the owner and that authority or, failing agreement, such sum as might be determined by the Lands Tribunal … I see no difficulty in adopting the correlative of that formulation as an appropriate definition of the claimant’s right, ie a right to compensation in such sum as might be agreed etc. In short, I do not consider that the Clydebank case assists Mr King’s submission. 22 Equally, in my view, the case of Halstead does not assist him for the reasons advanced in argument by Mr Harper. In the course of his judgment, the judge stated that he was fortified in his view that the cause of action accrued on entry by the wording of section 10 of the CP(VD)A, which treats the cause of action for compensation under that section as accruing when the land in question vests in the acquiring authority. He pointed out that such a provision is inconsistent with the limitation period for compensation, starting to run only when the compensation is agreed or awarded. He stated that the express reference to section 11 of the 1965 Act suggested an assumption by parliament that there was no material difference between the right to compensation under section 11 of the 1965 Act and section 10 of the CP(VD)A. Mr King criticises that reasoning, pointing out that, since subsection 10(3) makes provision for the time within which a question of disputed compensation must be referred to the Lands Tribunal (six years from the date when the claimant first knew or could reasonably be expected to have known, of the vesting of the interest), that would be equally consistent with a conclusion that no cause of action to recover the compensation was intended to accrue until the amount of compensation had been the subject of an award by the Lands Tribunal. It does not seem to me that valuable assistance is to be derived from section 10 of the CP(VD)A when seeking to construe the 1965 Act. The vesting declaration regime embodied in the CP(VD)A is of comparatively recent origin, essentially deriving from the setting up of the Land Commission in 1967, the vesting declaration procedure being made generally applicable by section 30 of the Town and Country Planning Act 1968, under which the six-year time-limit was incorporated by reference: see Schedule 3, para 9. The statutory law relating to compulsory acquisition, on the other hand, has much earlier origins in the Lands Clauses Consolidation Act 1845, which was passed to provide a set of provisions which could be incorporated with or without specified modifications in subsequent legislation. Under that Act, there were elaborate provisions for compensation to be set by justices, or by arbitration or by jury prior to possession being taken by the acquiring authority. Thus, there was no need for the provision of a limitation period in respect of the right to recover such compensation. It was not until the Acquisition of Land (Authorisation Procedure) Act 1946 that the acquiring authority were able to enter on and take possession of land notwithstanding that the purchase had not been completed. That legislation made no provision in respect of time-limits. However, it was passed against the background of the provisions of the Limitation Act 1939 and in particular section 2(1)(d) relating to sums recoverable by virtue of statute. Against that background it does not seem to me that the provisions of section 10 of the CP(VD)A, passed subsequently, can assist on the proper construction of the 1965 Act. Does section 9(1) apply to references to the Lands Tribunal? On this appeal it is strictly unnecessary for the court to decide whether it is sufficient for a claimant to refer the question of compensation to the Lands Tribunal within six years of his claim arising in order to prevent his claim becoming statute-barred, or whether he must, within that time, issue a writ in the High Court. That is because, in the present case, the appellants took neither step. However, I consider that for the purposes of future guidance, it is appropriate to deal with the matter. Like the judge, I consider that the Lands Tribunal is a ‘court of law’ within the meaning of section 38 of the 1980 Act. In Attorney-General v BBC [1981] AC 303 the House of Lords considered the question: what is a court of law, when dealing with the law of contempt of court? The House held that a local valuation court, despite its name, did not satisfy that description in the sense that it was essentially performing an administrative, as opposed to a judicial, function. However, those of their lordships who referred in passing to the Lands Tribunal did not doubt that it was a court: see Lord Dilhorne at p339F, and Lord Edmund-Davies at p350F. Lord Scarman stated at p359G: 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. In relation to a local valuation court, he said at p360C: The fact that it is a court (Parliament’s description) with an administrative purpose does not make it part of the judicial system of the Kingdom. The limits of its jurisdiction, as explored by Lord Radcliffe in Hope’s case, [1960] AC 551, reinforce the administrative nature of the purpose it serves. At the end of the day its one power is to correct a valuation list. It imposes no tax, no liability upon the citizen to pay any money or do any act. It has an important role in the machinery for determining a rate, and must act judicially: but it does not determine the amount of the rate or impose a liability to pay it. Its work is strictly comparable with the judicial responsibility of its predecessor, the assessment committee. (Emphasis supplied.) It seems clear to me that the Lands Tribunal has judicial rather than essentially administrative characteristics. As the judge observed, it has judicial powers and functions within a specialised and defined jurisdiction for the purpose of resolving disputes involving the valuation of interests in land. It also has procedural rules appropriate to a court of law. Further, in this context, it determines the amount of the liability of an acquiring authority. Because it is designated as a tribunal under the supervision of the council on tribunals by the Tribunals and Enquiries Act 1992 Schedule 1, it can hardly be regarded as one of the ‘ordinary Courts of Law’ referred to in section 1(1)(b) of the 1980 Act. However, because of the width of the definition of ‘action’ in section 38 of the 1980 Act, in which the qualification ‘ordinary’ is not applied to ‘court of law’, I too consider that the Lands Tribunal is a court of law for the purposes of the 1980 Act. That being so, it seems to me that it is appropriate to regard a reference to the Lands Tribunal by a claimant for the purposes of resolving a question of disputed compensation as ‘an action to recover’ that compensation within the meaning of section 9(1). The alternative is to regard it as no more than a procedural step required in order to quantify the sum to be recovered by an action before an ‘ordinary’ court of law. That seems to me both cumbersome and unnecessary. Nor, in my view, does any contrary argument arise on consideration of the procedure and powers of the Lands Tribunal as set out in its procedural rules. I do not propose to move to a detailed consideration of those rules. I would simply mention a point taken by Mr King in relation to the Lands Tribunal Rules 1996. The judge placed reliance upon the provision in r 38 of the Lands Tribunal Rules 1975, which were in force at the time the reference was made to the Lands Tribunal in this case. That rule applied section 26 of the Arbitration Act 1950 to all proceedings in the Lands Tribunal as the section applied to an arbitration. Thus, an award of compensation was enabled to be 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. R 38 also made applicable section 20 of the Arbitration Act 1950, which provides for an award to carry interest as from its date unless otherwise directed. As the judge noted, for reasons which he dubbed obscure, the Lands Tribunal Rules 1996 did not contain an equivalent of that part of the earlier r 38, which applied the enforcement provisions of section 26 of the Arbitration Act 1950, although by r 32(b) of the 1996 Rules provision was made for the award of compensation to carry interest. Mr King commented that it would be extraordinary if a reference to the Lands Tribunal to have compensation assessed were to be treated as an action to recover a sum within section 9 of the 1980 Act until May 1 1996 (when the 1996 Rules came into force), but not thereafter. 23 Mr Harper’s riposte to this point was that the omission from the 1996 Rules of a provision as to enforcement of an award appears to have been due to a simple oversight, arising when the rules were redrafted to refer to the relevant sections of the Arbitration Act 1996, which sections were themselves redrafted and differently numbered in that Act. That seems to me a likely explanation. In any event, the omission has since been rectified by the Lands Tribunal (Amendment) Rules 1998 in which r 4, by insertion of an additional para (d) into r 32 of the 1996 Rules, provides that section 66 of the 1996 Act (enforcement of the award) shall apply to all proceedings in the Lands Tribunal as they apply to an arbitration. Thus, I do not consider that the point made by Mr King detracts from the reasoning of the judge or the decision which he reached. In my view, a reference to the Lands Tribunal is ‘an action to recover’ compensation for compulsory purchase for the purposes of section 9 of the 1980 Act. I would therefore dismiss this appeal. MUMMERY LJ agreed and did not add anything. Also agreeing, NOURSE LJ said: I also agree that this appeal must be dismissed for the reasons given by Potter LJ. If you were to come fresh to section 9(1) of the Limitation Act 1980 and ask the question suggested by Peter Gibson LJ in Re Farmizer (Products) Ltd [1997] 1 BCLC 589 at p599, sc ‘By virtue of what is the compensation resulting from entry by an acquiring authority onto land recoverable’, the answer would surely be ‘By virtue of section 11 of the Compulsory Purchase Act 1965’. Moreover, as Potter LJ has demonstrated, it is established by authority that a cause of action for a sum recoverable by virtue of an enactment ‘accrues’ notwithstanding that it remains to be quantified and, further, that the quantification may have to be made by a tribunal other than a court of law. It is therefore clear that, for the purposes of section 9(1) of the 1980 Act, the cause of action for compensation resulting from entry pursuant to section 11 of the 1965 Act accrues on the date of entry. Appeal dismissed with costs.