Hillingdon London Borough Council v ARC Ltd (No 2)

Compulsory purchase –– Compensation –– Limitation period –– Reference to Lands Tribunal –– Expiry of statutory time limit –– Estoppel by convention –– Whether conditions for estoppel by convention satisfied –– Promissory estoppel –– Whether acquiring authority estopped from relying upon expiry of time limit In Hillingdon London Borough Council v ARC Ltd [1998] 3 EGLR 18, the Court of Appeal affirmed the decision of the court below that the claimant’s right to compensation was time-barred, unless, by reason of the acquiring authority’s conduct in relation to the claim, the acquiring authority were not entitled to rely upon section 9 of the Limitation Act 1980. No reference had been made to the Lands Tribunal, within six years of the date of entry by the acquiring authority on the claimant’s property in April 1982, for the determination of the compensation in respect of phase I of the works underlying the acquisition. The expiry of the limitation period in respect of phase II was 31 May 1993. At a further hearing, Judge Pryor QC, sitting as a deputy judge of the High Court, held that the acquiring authority were estopped by convention from relying upon the expiry of the time limit, having regard to the course of negotiations between the parties after April 1988. Alternatively, he decided that it would have been possible to spell out promissory estoppel or waiver from the conduct of the acquiring authority’s valuer. The acquiring authority appealed. Held: The appeal was allowed. (1) In relation to estoppel by convention, the acquiring authority were, at all material times, entitled to the view that the claim being advanced was not a valid claim, as it was not supported by appropriate evidence. There was no shared common assumption, communicated one to the other, that there was a valid claim and that the limitation period was not a defence to be relied upon as a basis upon which negotiations proceeded post-April 1988. If a common assumption existed up to March 1994, a letter sent by the acquiring authority in that month, indicating that they considered themselves free to take the limitation point, entitled the claimant to only a few weeks to issue a reference to the Lands Tribunal; it did not do so. The claim to estoppel by convention failed. (2) In relation to promissory estoppel, there was no clear and unequivocal representation by the acquiring authority that the claim was valid and that they would not rely upon the statutory limitation defence. (3) Although the question of unconscionability did not arise, it would be for a claimant to establish detriment. The acquisition of the land for no payment was not unconscionable, as the claimant had had ample opportunity to refer its claim to the tribunal. The following cases are referred to in this report Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84; [1981] 3 WLR 565; [1981] 3 All ER 577; [1982] 1 Lloyd’s Rep 27, CA Co-operative Wholesale Society Ltd v Chester-le-Street District Council (1997) 73 P&CR 111; [1996] 2 EGLR 143; [1996] 46 EG 158; [1996] RVR 185 Gillett v Holt [2000] 3 WLR 815; [2000] 2 All ER 289 Hamel-Smith v Pycroft & Jervase Ltd unreported 5 February 1987 Hillingdon London Borough Council v ARC Ltd [1999] Ch 139; [1998] 3 EGLR 18; [1998] 39 EG 202; [1999] Ch 139; [1998] 3 WLR 754; [1998] 3 EGLR 18; [1998] 39 EG 202; [1998] RVR 242, CA Hillingdon London Borough Council v ARC Ltd (No 2) [1999] 3 EGLR 125, ChD India (Republic of) v India Steamship Co Ltd (The Indian Endurance) (No 2) [1998] AC 878; [1997] 3 WLR 818; [1997] 4 All ER 380; [1998] 1 Lloyd’s Rep 1 Keen v Holland [1984] 1 WLR 251; [1984] 1 All ER 75; (1984) 47 P&CR 639; [1984] 1 EGLR 9; [1984] EGD 9; 269 EG 1043, CA Lokumal (K) & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28, CANorwegian American Cruises A/S v Paul Mundy Ltd (The Vistafjord) [1988] 2 Lloyd’s Rep 343, CA Taylor Fashion Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133; [1981] 2 WLR 576; [1981] 1 All ER 897; sub nom Taylor Fashion Ltd v Liverpool Victoria Friendly Society [1979] 2 EGLR 54; (1979) 251 EG 159 ChD Troop v Gibson [1986] 1 EGLR 1; (1986) 277 EG 1134 Turner v Midland Railway Co [1911] 1 KB 832 Unsworth v Elder Dempster Lines Ltd [1940] 1 KB 658; [1940] 1 All ER 362 This was an appeal by the acquiring authority, Hillingdon London Borough Council, from a decision of Judge Pryor QC, sitting as a deputy judge of the High Court, giving judgment to the respondent, ARC Ltd, on a claim by the appellant that it was not estopped from making a reference to the Lands Tribunal. Joseph Harper QC (instructed by the solicitor to Hillingdon London Borough Council) appeared for the appellants; Neil King QC (instructed by Lawrence Tucketts, of Bristol) represented the respondent. Giving judgment, Arden Jsaid: This appeal is another round in the litigation between Hillingdon London Borough Council (HLB) and ARC Ltd (ARC) arising out of the latter’s claim to compensation following the compulsory acquisition by HLB of land occupied by ARC at Yiewsley. As explained below, in April 1982 HLB entered the land to construct phase I of the works, which was completed in April 1984. ARC submitted its original claim for compensation on 19 April 1982. However, no reference to the Lands Tribunal was made until 6 September 1995, some 13 years after the original claim. HLB took the point that the proceedings were statute-barred as a result of section 9 of the Limitation Act 1980. On 12 June 1997 Mr Stanley Burnton QC, sitting as a deputy judge of the High Court, held that ARC’s claim was statute-barred unless HLB were precluded by their conduct from so asserting. He held that the relevant period was six years from the date upon which HLB entered the land. On 7 April 1998 this court (Nourse, Potter and Mummery LJJ) dismissed the appeal. Following the decision of Mr Burnton QC, and in accordance with directions given by him, ARC served a statement of claim in support of its contention that HLB was precluded from relying upon the limitation point. HLB served their defence, and trial of the action took place before Judge Pryor QC. On 30 April 1999 Judge Pryor QC gave98 judgment in favour of ARC: see [1999] 3 EGLR 125. He held that HLB were precluded by convention estoppel from relying upon the limitation point. He further considered that if the concept of estoppel by convention did not exist, it would have been possible to spell out a promissory estoppel or waiver, on the basis that HLB’s valuer, Mr Chambers, had allowed the negotiations to continue, in the sense that he attended meetings and sought further details of ARC’s claim, after he became aware of the possibility at least of a limitation defence becoming available. This is an appeal by HLB from the decision of Judge Pryor QC. ARC founded its estoppel claim primarily upon the communications between the parties from just prior to 26 April 1988, when the limitation period expired, to 18 March 1994, when HLB indicated for the first time to ARC that ARC’s claim might be statute-barred, but also on communications after this later date. The material parts of its statement of claim were as follows: 69. Both the Plaintiff and the Defendant conducted negotiations and discussions as to the Defendant’s claim for compensation before and after the expiry of the limitation period on 26 April 1988 upon a common understanding that the Defendant had a valid claim for compensation to be agreed (or in the absence of agreement) to be determined by reference to the Lands Tribunal. It would be unconscionable for the Plaintiff now to be allowed to rely on section 9 of the Limitation Act 1980. 70. Further or alternatively the Plaintiff after the expiry of the limitation period continued until 18 March 1994 to negotiate and discuss the Defendant’s claim for compensation on the basis that it was and remained a valid claim. Such continued negotiation and discussion amounted to a representation that the Plaintiff would not rely upon section 9 of the Limitation Act 1980. In reliance upon such representation and to the Plaintiff’s knowledge the Defendant altered its position by instructing valuers and solicitors (namely Strutt and Parker and Lawrence Tucketts respectively) and by not making a reference of its claim to the Land Tribunals until 6 September 1995. 71. Further or alternatively the Plaintiff by its aforesaid conduct after the expiry of the limitation period waived its right to rely upon section 9 of the Limitation Act in relation to the Defendant’s claim for compensation. Accordingly, the common understanding relied upon by ARC, and found by the judge, was that set out in para 69 of the statement of claim. The representation relied upon in the alternative was that HLB would not rely upon section 9 of the Limitation Act 1990. There was no express communication to this effect. ARC did not identify any particular communication by HLB as giving rise to this representation. The judge considered that promissory estoppel arose after Mr Chambers became aware of the possibility of a limitation defence, which, on the facts found by the judge, was in September 1991/January 1992. Background It is necessary to set out the parties’ discussions in some detail. They are to be found in the agreed statement of facts in this case, the correspondence between the parties and the facts found by the judge. At the trial, there were witness statements from Mr SWJ Pasterfield, Mr JK Chambers, Mr N McArthur, Mr RN Smith, Mr FJ Thompson and Mr RJC Dickinson, which we have seen, although we have not seen any transcript of the cross-examination of these witnesses. HLB are the highway authority for their area. The Yiewsley bypass was a road that was originally proposed to be built to bypass Yiewsley and to access London Airport from the north. In fact, the road was built in two phases. The first phase was a single carriageway. The second phase involved building a second carriageway. On 24 December 1980 HLB made a compulsory purchase order (the CPO) authorising HLB to purchase land compulsorily for the purposes (among other things) of: the construction of a new highway from a point approximately 190 metres north of the junction of Stockley Close with Stockley Road for a distance of approximately 122 metres including the construction of a new bridge over the railway line and the Grand Union Canal south-east of the Forester’s Arms public house in the London Borough of Hillingdon. The land required for these purposes included part of a site occupied by ARC as a railway aggregates depot under a lease granted by British Waterways Board (BWB) for a term of 35 years commencing on 25 December 1970. HLB sought, by means of the CPO, to acquire a plot of land, and also the right to construct a bridge over part of the land, the right to use an access road and the right to construct a bridge over a canal. On 21 December 1981 the CPO was confirmed by the Secretary of State for Transport. On 22 March 1982 HLB served a notice to treat in respect of the plots that it sought to acquire. On 7 April 1982 HLB served notice of intention to enter. On 19 April 1982 ARC returned a claim in answer to the notice to treat. Thereafter, HLB commenced work at ARC’s site for the construction of the Yiewsley bypass. These works involved the construction of the highway bridge, including the four column bases with columns for the first carriageway shown, and also accommodation works for ARC. Those works included: the construction of a two-storey office building in place of the existing single-story building, aggregate storage bunkers and a mess room/laboratory (in each case prior to the demolition of the building/structure being replaced); the repositioning of railway sidings; cesspool and drainage works; the construction of a new weighbridge office; the provision of lighting for the site; the construction of a new concrete vehicle wash area; and fencing works and resurfacing works for the site entrance. HLB claimed that the value of the accommodation works was not less than £441,000. Substantial completion of the first carriageway bridge structure took place on 30 November 1983, and the accommodation works arising from the construction of the first carriageway were substantially completed in March/April 1984. While the scheme constructed at this time involved the construction of a single carriageway, HLB were proposing (subject to funding) to construct a further carriageway adjacent to, and to the west of, the single carriageway. In the course of carrying out the construction of the first carriageway, HLB also constructed the column bases and columns for the second carriageway. These column bases fell partly outside the land that HLB were authorised to acquire under the CPO. This was recognised by the parties at the time, and ARC gave HLB permission to proceed. HLB completed construction of the column bases and columns for the second carriageway in August/September 1983. The first carriageway was officially opened on 11 May 1984. HLB commenced construction of the second carriageway (other than the already-constructed column bases and columns) in June 1985. The construction of a second carriageway required carrying out further accommodation works in relation to the land demised to ARC. These works included the construction of a replacement DIY/store building, and resurfacing and fencing works also commenced in June 1985. Substantial completion of the second carriageway bridge structure (excluding surfacing) was effected in November 1986. The ARC accommodation works arising from the construction of the second carriageway were completed by January 1987. Substantial completion of the section of the second carriageway, including the bridge, took place on 1 June 1987. The land for phase II had not been acquired under the CPO. The second carriageway was officially opened on 7 June 1987. HLB contends that the limitation period for the land taken under phase II was 31 May 1993, and this has not been disputed by ARC. On 29 March 1991 BWB conveyed to HLB its freehold interest in the land upon which the column bases are situated, and granted easements for, among other things, the highway bridge upon which the dual carriageway runs. Most of the communications between the parties can be taken from the correspondence between the parties. On 7 October 1987 Mr Douglas, the principal valuer for HLB, wrote to Mr Thompson, of ARC, asking for further progress on ARC’s claim. He stated: I would now like to conclude this claim as soon as possible and if the matter is not going to be capable of settlement by agreement I would wish to refer it to the Lands Tribunal as soon as possible. 99 Following further correspondence, on 10 March 1988, Mr Douglas wrote to Mr Thompson asking whether he was in a position to finalise the matter. He stated that in addition to the claim under the CPO: I would like to settle terms for use by your company of the land underneath the piers of the bridge which were acquired from British Waterways Board. On 26 April 1988 the six-year limitation period for starting proceedings in the Lands Tribunal to determine the compensation payable to ARC for the appropriation of its land pursuant to the CPO (phase I) expired. As stated above, this was decided by the Court of Appeal in Hillingdon London Borough Council v ARC Ltd [1999] Ch 139*, dismissing an appeal from Mr Burnton QC. In giving his judgment, Mr Burnton QC observed that it had been widely assumed, upon the basis of the decision of the Divisional Court in Turner v Midland Railway Co [1911] KB 832, that no limitation period was applicable until the amount of the compensation had been agreed or determined. Indeed, we note that in the recent case of Co-operative Wholesale Society v Chester-le-Street District Council (1997) 73 P&CR 111†, at p120, the president of the Lands Tribunal, Judge Bernard Marder QC, held that where an acquiring authority proceeded under a CPO by notice to treat followed by notice of entry, there was no statutory time-limit for a reference of disputed compensation to the Lands Tribunal. The president accepted that this was then a widely-held view, and we have no reason to doubt that the view was indeed widely held. * Editor’s note: Also reported at [1998] 3 EGLR 18; [1998] 39 EG 202 † Editor’s note: Also reported at [1996] 2 EGLR 143 On 13 February 1989 Mr Thompson wrote to HLB stating that the access was about to be permanently resolved and that, thereafter, it should be possible to resolve ARC’s compensation claim. On 10 March 1989 HLB wrote to Mr Thompson stating: I agree with you it should now be possible to resolve the compensation payable to your company due to the Yiewsley by-pass works. If you will submit your claim we will endeavour to reach agreement with you as Mr Douglas has now left for greener pastures. On 22 June 1990 Mr Harper, valuer for HLB, wrote to ARC stating that HLB were waiting for further details of ARC’s claim, and adding: We are near to the point of closing down accounts for this scheme and it has become necessary to ask if you intend to pursue your claim. A reminder was sent on 31 July 1990, to which ARC responded on 4 September 1990 by requesting HLB to bear ARC’s agent’s fee so that the matter could be resolved quickly. By a letter dated 21 September 1990, Mr Smith, then principal valuer for HLB, agreed to meet the cost of ARC’s surveyor’s fees in accordance with Ryde’s Scale. In consequence of this letter, ARC appointed Strutt & Parker to act as valuer on its behalf in October 1990. The representative of Strutt & Parker was Mr Thompson. ARC submits that there could be no reason for HLB to agree to pay ARC’s surveyor’s fees unless they considered that ARC’s claim was a valid claim, and it submits that, by this date, all the ingredients of convention estoppel were fulfilled. A meeting took place between HLB’s newly-appointed principal valuer, Mr Chambers, and Mr Thompson in July 1991. Following that meeting, by a letter dated 20 August 1991, Mr Thompson submitted a revised claim for compensation of £1.2m. He also suggested a way in which the matter could proceed. Mr Chambers referred this letter to HLB’s solicitor, Mr Dickinson. Mr Chambers asked for advice as to whether the claim was statute-barred. The judge found that Mr Dickinson gave no definitive answer to this question, but that both Mr Chambers and Mr Dickinson thought that the point might be a good one and that, in due course, they would need to take specialist advice about it. The date that the judge gives for this advice is 8 January 1992. These findings are not challenged. On 17 September 1991 Mr Chambers wrote to Mr Thompson. He promised to find out more information about the second carriageway. He added: In the meantime I note that your claim for compensation is of the order of £1.2m and I look forward to receiving a detailed break down of this claim. On 2 January 1992 Mr Thompson sent Mr Chambers a detailed breakdown of the claim. He stated: The details enclosed are comprehensive and self-explanatory, however, we will be pleased to discuss these further should you so wish. On 16 January 1992 there were discussions between Mr Thompson and Mr Chambers. These related to the substance of ARC’s claim. The note of these discussions prepared by Mr Chambers records that Mr Thompson stated that ARC was likely to apply for an advance payment of 90%, under section 52 of the Land Compensation Act 1973, and that Mr Chambers told him that he was in no position to make any estimate for anything other than the land-taken element, since HLB had not then been provided with anything upon which to base an opinion; for example, certified accounts over the period, plus receipts etc. The judge found that, at the date of this meeting, Mr Thompson was assuming that the claim would be taken to the Lands Tribunal if it could not be settled. Mr Thompson gave evidence that he was not aware of any set legal time-limit. The judge found that it was Mr Chambers’ view throughout that ARC had not provided sufficient information to substantiate its claim: see [1999] 3 EGLR 125 at p127K. In his witness statement he said: so far as I was concerned, and in so far as I can determine my predecessors were concerned, we adopted a “wait and see” attitude; there was no negotiation because there was nothing to negotiate about. Accordingly, HLB submitted that there could have been no common assumption between the parties that they were negotiating a settlement of a valid claim. On 24 January 1992 ARC wrote to HLB with a revised claim for the value of its interest in the land taken in the sum of £83,487. It submitted this claim for attention by HLB. Mr Thompson added that he was seeking accounting evidence in proof of the other points of claim and hoped to return to HLB shortly. In addition, he stated that he was seeking instructions to submit a claim under section 52 of the 1973 Act. On 5 March 1992 there was a further meeting between Mr Chambers, of HLB, and Mr Thompson, of Strutt & Parker, and Mr Lee and Mr Smith, of ARC. ARC’s substantive claim was discussed in detail. According to Mr Thompson’s note of this meeting, HLB told ARC that HLB were taking legal advice, but limitation was not mentioned; ARC was encouraged to submit a further proof of claim, including accounts, and HLB confirmed that, if the claim were substantiated, ARC’s claim would be settled. Indeed, the judge found that Mr Chambers had said that the claim could be determined within two weeks: see [1999] 3 EGLR 125 at p129A. According to Mr Chambers’ note, Mr Thompson said: Their accounts are likely to show a drop in profits but that there were items to be added to ARC’s claim. By a letter dated 10 April 1992, marked “without prejudice”, Mr Chambers wrote to Mr Thompson. He stated that to avoid double counting, he considered that the “land taken” claim and “injurious affection” claim should be taken together. He added that the matter was complicated by the interaction of compensation rights and lease liabilities, having regard to the landlord/tenant relationship with BWB. He ended: As mentioned I am not sure as to the correct method of dealing with some of these issues and to avoid the risk of some wasted effort I am trying to obtain appropriate legal advice during this period whilst ARC are assembling accounts and receipts etc prior to finalising the details and the basis of their claim. This was a reference to the legal advice discussed on 5 March 1992. On 28 April 1992 Mr Thompson wrote to HLB in order to encourage100 discussions to reach an agreed sum for compensation. The possibility was mentioned of a reference to the Lands Tribunal in the last resort. By a letter dated 1 July 1992, Mr Thompson sent a formal request to HLB’s solicitor for an advance payment of compensation. He stated that the company wished to complete this claim and therefore asked HLB’s solicitor to deal with the matter diligently. Mr Thompson pointed out (in a letter on the same date to Mr Chambers) that some evidence would have been lost. He added: Nevertheless, we would like to agree as much as possible and to identify only those areas where we are in dispute prior to any future reference of the matter for determination of the Lands Tribunal. Mr Thompson ended his letter by asking HLB to deal with the matter diligently, in order that an advanced payment could be made and/or a satisfactory reference to the Lands Tribunal. On 30 July 1992 HLB wrote to ARC requesting further particulars of its claim “so that it can be fully and properly considered, negotiated, agreed and/or rejected as appropriate”. On 8 August 1992 ARC submitted further material. ARC stated that its losses due to HLB’s bridge construction works had not been included. It invited HLB’s valuer to examine and discuss each item of the claim in order that proof of evidence could be obtained for those parts of the claim in dispute. On 3 September 1992 there was a discussion between Mr Chambers and Mr Thompson. Mr Chambers stated that HLB’s view was that the three months’ time-limit for responding to ARC’s request for an advance payment of compensation had not yet started because HLB had not received reasonable proof under the section 52 notice. He recorded in his note that Mr Thompson was to get ARC’s solicitor to examine whether they could agree with this interpretation. Mr Chambers’ note added that either side could refer the claim to the Lands Tribunal at any time, in any event. Accordingly, by this date it was clear to HLB that ARC was contemplating the possibility of taking its claim to the Lands Tribunal. On 13 October 1992 Mr Thompson wrote to HLB asking what the position was, and inviting discussions regarding a settlement. This was acknowledged by HLB on 20 October 1992. ARC instructed solicitors, Lawrence Tucketts, which wrote to HLB on 20 November to ask about the position, and again on three occasions in December 1992. On 6 January 1993 Mr Thompson wrote to HLB asking HLB what progress they were making. On 25 January 1993 HLB confirmed that the date of entry for the purposes of assessing interest on compensation should be taken as 28 April 1992. On 1 February 1993 Mr Chambers spoke to Mr Thompson, repeating his earlier view that he (Mr Chambers) still felt that the claim should be dealt with as one item because of the overlap. Mr Thompson told him that ARC might be in a position to put in a fully revised claim in about three to four weeks. This did not happen, and eventually, on 6 April 1993, HLB wrote to Strutt & Parker asking what progress was being made in the matter. Mr Thompson promised to submit an amended claim as quickly as possible. Finally, on 25 October 1993, ARC submitted a revised claim to HLB. At this point, Mr Thompson’s involvement ended. Also on 25 October 1993, ARC wrote to Mr Rippingale, the managing director of HLB, asking for an assurance that the claim would be dealt with expeditiously by HLB. On 27 October 1993 Mr Chambers submitted a draft response to Mr Rippingale, and wrote an internal memorandum to him stating that counsel’s advice was awaited on a number of points, including whether ARC’s claim might be time-barred. However, nothing was said about limitation to ARC. On 28 October 1993 Mr Rippingale replied to ARC (in terms of the draft): I understand that the claim is long outstanding due to the inability of your company to provide sufficient details for the claim to be properly proven and if these matters have now been adequately dealt with there should be no significant obstacle to its resolution. On 9 November 1993 HLB wrote to ARC stating that much of the compensation claim submitted by ARC was insufficiently proven; the betterment exceeded the provable loss; and HLB had decided to take counsel’s advice. On 28 January 1994 Lawrence Tucketts wrote again, reserving its rights, including the right to refer the matter to the Lands Tribunal. It appeared that counsel’s opinion had not then been sought. A reminder was sent. Finally, HLB wrote to ARC on 18 March 1994. The letter was marked “without prejudice”. The letter said: Thank you for your letter of 22 February. The Council is currently considering whether your client’s claim is out of time… and then sought further information. Lawrence Tucketts replied on 18 March 1994. It did not refer to the limitation point, but asked to see counsel’s opinion. HLB’s reply, dated 21 March 1994, indicated that counsel had still not been instructed, and, indeed, counsel was not instructed until June 1994, or, possibly early July. Further correspondence was exchanged. Finally, on 19 October 1994, HLB wrote to Lawrence Tucketts rejecting ARC’s claim. The first reason HLB gave was that leading counsel had advised that the six-year limitation period in section 9(1) of the Limitation Act 1980 “most probably applies”. Further correspondence ensued. HLB refused ARC’s request to see counsel’s opinion. HLB saw no purpose in having a meeting. In June 1995 ARC suggested a “without prejudice” meeting, and it repeated that offer in July 1995 and told HLB that it had been advised that the claim was not statute-barred. On 27 July 1995 Lawrence Tucketts wrote to HLB giving HLB one further opportunity “to respond positively”. When HLB failed to respond, ARC, on 6 September 1995, submitted a notice of reference to the Lands Tribunal. The Lands Tribunal declined to deal with a preliminary point raised by HLB on limitation, and HLB then commenced proceedings in the High Court to determine this question. Judgment of Judge Pryor QC As explained, the judge found as a fact that it never occurred to Mr Smith and Mr Thompson, both of whom were concerned in this matter for ARC, that there was any statutory limitation period: see page 129C. The judge found that Mr Smith and Mr Thompson thought that they were involved in negotiations, however desultory, of what they regarded as a genuine claim for compensation, which, if not settled, could be taken to the Lands Tribunal. The judge found that HLB did not consider that ARC had put forward a valid claim that deserved to be taken seriously in negotiation, and HLB’s view was that any claim was matched by betterment. In addition, the judge found that Mr Chambers had doubts about the position on limitation from about the autumn of 1991. The judge also found that, from that time, Mr Dickinson did not share any assumption with ARC as to application of the Limitation Act, but the doubts that Mr Chambers had were not communicated to ARC until March 1994. Notwithstanding this, the only sensible explanation that the judge could see for the letters between 13 February 1989 and 10 March 1989 was that both parties believed that ARC had a valid claim, and that this was confirmed by HLB’s agreement to pay ARC’s surveyor’s fees in September 1990: see [1999] 3 EGLR 125 at p129K-L. He considered that the overwhelming probability was that both sides made the same mistake, that there was no statutory time-limit applying to ARC’s claim. The only sensible inference to draw was that both parties were dealing with ARC’s claim on the basis that it was a valid claim, capable of being resolved by negotiation or referred to the Lands Tribunal if settlement could not be reached: see [1999] EGLR 125 at p130B. With regard to Mr Chambers’ uncommunicated reservations about the time-bar, Mr Chambers: consciously allowed Mr Thompson to continue negotiations on the mistaken assumption that [HLB] would have been if he had shared the same assumption. 101 The judge rejected the argument that because the limitation period had not expired in relation to phase II, it would be wrong to conclude that the parties were negotiating upon the basis that the limitation period in respect of phase I had not expired. Phase I constituted the greater part of the claim. Whatever may have been the position in relation to phase II, “the discussions about phase I were continuing in a way that only made sense if, ultimately in the absence of agreement there could be a reference to the Lands Tribunal”: see [1999] 3 EGLR 125 at p130F. In relation to the letter dated 20 September 1991, marked “without prejudice”, the judge held that “without prejudice” must be construed as meaning simply “without prejudice to any arguments which can be raised on an effective reference to the Lands Tribunal”. He saw no reason why, in any event, the privilege should not be limited to the arguments that might be raised before the Lands Tribunal, rather than the reference to it. The judge held that HLB’s letter dated 18 March 1994 was, in effect, notice bringing the shared assumption to an end, but that none the less ARC initiated the reference to the Lands Tribunal in sufficient time. The letter of 18 March 1994 was equivocal, and, in view of the general understanding of the law up to that time, it was reasonable for ARC to wait for a clear indication that HLB no longer shared the common assumption before embarking on the expense of a reference to the Lands Tribunal. Even after the clear notice by HLB in October 1994 that it would rely upon the statutory time limit, the time taken by ARC to take its own advice and refer the matter to the Lands Tribunal was not, in the circumstances, “so unreasonable as to preclude further reliance on the estoppel”: see [1999] 3 EGLR 125 at p131D. Any prejudice would fall on ARC. Convention estoppel The ingredients of estoppel are summarised in Waiver, Variation and Estoppel (Wilkens & Villiers, 1998, pp201-202) as follows: 9–01 On one level, the elements of estoppel by convention can be simply stated. Thus, the estoppel will arise where: (i) the parties have established, by their construction of their agreement or a common apprehension as to its legal effect, a convention basis; (ii) on that basis, the parties have regulated their subsequent dealings; and (iii) one party would suffer detriment if the other were to be permitted to resile from that convention. As such estoppel by convention can, on this level, be relatively easily distinguished from estoppel by representation and equitable forbearance. Estoppel by convention depends on a shared assumption which can be one of fact or law and not on either a representation as to a state of facts or a promise as to future obligations. Estoppel by convention is, as the law currently stands, therefore to be distinguished from equitable forbearance or estoppel by representation. 9-02 However, there are three complications to the above analysis. First, when as a matter of fact will the doctrine apply. Secondly, can estoppel by convention provide the party relying on it with a cause of action. Thirdly, can or could estoppel by convention be viewed as part of an overarching doctrine of estoppel. [footnotes omitted] The three ingredients identified by the authors in para 9-01 follow very closely the description of convention estoppel given by the Court of Appeal in Keen v Holland [1984] 1 WLR 251* at p261, save that the Court of Appeal gave as the third ingredient that it would be unjust or unconscionable if one of the parties resiled from that contention. There may be little difference between the two formulations provided that it is borne in mind that detriment is not a narrow or technical concept: see Gillett v Holt [2000] 2 All ER 289 and John v George (1996) 71 P&CR 375. As respects para 9-02 above, we are concerned, in this case, with the first only of the complications mentioned there. The second so-called complication does not arise in this case. As to the third complication, we note that the court has frequently said that various forms of estoppel can now be seen to merge into one general principle: see, for example, Amalgamated Investment, below, at p122 per Lord Denning MR, and Taylor Fashion below. However, as that issue was not argued in this case, it is not appropriate for us to express a view upon it on this occasion. * Editor’s note: Also reported at [1984] 1 EGLR 9; (1983) 269 EG 1043 The leading authority is Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. In that case, the bank agreed to make a further loan to a company on the basis that it would be covered by a guarantee to be executed by its parent company. The parent company duly executed a guarantee of all moneys due to the bank from the subsidiary, but the loan in question was, in fact, made through a subsidiary of the bank, and thus was not covered by the parent company’s guarantee. The parties believed that the guarantee covered the loan by the bank’s subsidiary and, in reliance upon that belief, the bank allowed the loan to remain outstanding, notwithstanding opportunities to call it in. The Court of Appeal held that since the parties had acted on the agreed assumption that the parent company was liable for the loan to its subsidiary, the parent was estopped by convention from denying that it was bound to discharge its indebtedness to the bank. Lord Denning MR held at p122C: When the parties to a transaction proceed on the basis of an underlying assumption –– either of fact or of law –– whether due to misrepresentation or mistake makes no difference –– on which they have conducted the dealings between them –– neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands. Eveleigh and Brandon LJJ gave concurring judgments. They both referred to a passage on estoppel convention from Spencer Bower and Turner, Estoppel by Representation 1977 (3rd ed) at p157. The full quotation reads: This form of estoppel is founded, not on a representation of fact made by a representor and believed by a representee, but on an agreed statement of facts the truth of which has been assumed, by the convention of the parties, as the basis of a transaction into which they are about to enter. When the parties have acted in their transaction upon the agreed assumption that a given state of facts is to be accepted between them as true, then as regards that transaction each will be estopped as against the other from questioning the truth of the statement of facts so assumed. This passage has often been cited in other cases on convention estoppel. Brandon LJ also made another point upon which Mr Neil King QC placed reliance, that the claimant’s error need not have originated in some communication from the party sought to be estopped: see [1982] QB 84 at p130. In the Amalgamated case, the Court of Appeal affirmed the decision of Robert Goff J. That judgment also contains a valuable discussion of convention estoppel. Of particular relevance to this appeal is a passage on causation (ie the need for the claimant to have acted on the faith of the communication from the party sought to be estopped) in [1982] QB 84 at pp104-105. In this passage, Robert Goff J stated: [I]t can only be unconscionable for the encourager or representor to enforce his strict legal rights if the other party’s conduct has been influenced by the encouragement or representation. In Norwegian American Cruises A/S v Paul Mundy Ltd (The Vistafjord) [1988] 2 Lloyd’s Rep 343, the plaintiff was the owner of a cruise liner, the Vistafjord, and the defendant was the plaintiff’s general passenger sales agent. By an agreement made in 1975, the plaintiff agreed to pay the defendant 15% commission on gross United Kingdom ticket sales-deductible on remittance of balance moneys. The defendant arranged a charter to British Leyland Cars for £1.3m and a sub-charter for the outward and inward legs of the charter. The plaintiff objected strongly about the sub-charter, and said it would not be paying the defendant any commission, or, at most, 1%, 2% or 3%. However, it had the choice to accept the charter and the sub-charter or to decline the charter and thus avoid the sub-charter. It took the former course. After the charter and sub-charter were duly performed, the plaintiff sued the defendant for amounts that it had retained, representing 10% commission on the charter hire after giving 5% to British Leyland Cars’ brokers. The plaintiff claimed that the commission was outside the102 general passenger sales agreement. The Court of Appeal held that the parties entered into the transaction between themselves on the basis of an agreed assumption that the defendant would receive commission, and it would not be fair to allow the plaintiff to repudiate that assumption, which enabled them to obtain the business in the first place. Bingham LJ held that there was very clear conduct crossing the line in that case. Both parties knew about the sub-charter and that the defendant would not commit itself without expectation of commission as a cushion against loss. It was not a case of inaction but of action on both sides of which the other was fully cognisant. The charter to British Leyland Cars was dependent on the sub-charter. A number of authorities were cited. The Court of Appeal approved a “valuable and illuminating commentary on the law” by Peter Gibson J in Hamel-Smith v Pycroft & Jervase Ltd unreported 5 February 1987. Peter Gibson J held that the well-known passage from Spencer Bower & Turner, quoted above, was best seen as illustrating, rather than defining, convention estoppel, for a number of reasons: First, the agreed assumption need not be of fact, but may be of law… Secondly, I do not see why the parties need to be about to enter a transaction when they make a common assumption… Estoppel is not dependent on a contract, but on a common assumption… A third reason why the two sentences in Spencer Bower should not be taken as definitions is that they are not unqualified, as I think that they should be, by considerations of justice and equity… Even if the parties had acted on a common mistaken assumption it does not follow that the estoppel will follow as of course… Bingham LJ also referred to Troop v Gibson (1986) 277 EG 1134*, in which the relevant transaction was not one entered into between the parties to the convention estoppel, and in which Purchas LJ held at p1143: The crucial requirement for convention estoppel is that at the material time both parties should be of a like mind. * Editor’s note: Also reported at [1986] 1 EGLR 1 A number of authorities illustrate the requirement for communication of the assumption between the parties. Communications complying with this requirement were described as “crossing the line” in K Lokumal & Sons (London) Ltd v Lotte ShippingCo Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28, in which a claim that a time-bar did not apply, based upon convention estoppel, failed because of the lack of communication. In that case, the plaintiff sued as assignee of a cargo owner. It had a claim of damage to the cargo incurred in December 1980. This meant that it had a two-year limitation period for bringing its claim. On 18 December 1982 the owner, P&I Club, sent a telex agreeing to an extension of time “provided charterers agreed likewise”. The plaintiff assumed that the owner had obtained the permission of the charterer. Thereafter, the charterer objected to the extension of time and the owner asserted that the plaintiff’s claim was statute-barred. The Court of Appeal held that the case was one of genuine misunderstanding, but there was no scope for estoppel by silence or acquiescence against the owner of the club, and, in addition, that there was no scope for convention estoppel. The parties had acted independently of each other. Nothing “crossed the line between them”. Kerr LJ, giving the judgment of the Court of Appeal, held at p34: All estoppels must involve some statement or conduct by the party alleged to be estopped on which the alleged representee was entitled to rely and did rely. In this sense all estoppels may be regarded as requiring some manifest representation which crosses the line between representor and representee, either by statement or conduct. It may be an express statement or it may be implied from conduct, eg a failure by the alleged representor to react to something said or done by the alleged representee so as to imply a manifestation of assent which leads to estoppel by silence or acquiescence. Similarly, in cases of so-called estoppels by convention, there must be some mutually manifest conduct by the parties which is based on a common but mistaken assumption. The alleged representor’s participation in this conduct can then be relied upon by the representee as a basis for this form of estoppel… There cannot be any estoppel unless the alleged representor has said or done something, or failed to do something, with a result that –– across the line between the parties –– his action or inaction has produced some belief or expectation in the mind of the alleged representee, so that, depending on the circumstances it would thereafter no longer be right to allow alleged representor to resile by challenging the belief or expectation which he had engendered. To that extent at least, therefore, the alleged representor must be open to criticism. In Republic of India v India Steamship Co Ltd (The Indian Endurance) (No 2) [1998] AC 878, the plaintiff was the consignee of a cargo of munitions that were damaged in the course of the voyage. On 1 September 1988 it issued proceedings in Cochin seeking damages in respect of a jettisoned cargo, and, in December 1989, obtained judgment in the rupee equivalent of £7,200. Meanwhile, on 25 August 1989, the plaintiff issued a writ in rem in the Admiralty Court in England and it was served on the defendant’s vessel, the Indian Endeavour. The plaintiff’s claim was for the Swedish kronor equivalent of £2.5m. The question arose as to whether there had been waiver or estoppel defeating the operation of section 34 of the Civil Jurisdiction and Judgments Act 1982, and whether the judgment in the Cochin court, being in personam, was on the same cause of action as that upon which the plaintiff asserted in the Admiralty Court action. Section 34 of the Act of 1982 precludes proceedings on a cause of action in respect of which judgment has been given in any jurisdiction, unless that judgment is unenforceable in England. The House of Lords held that section 34 applied. The House further held that the Court of Appeal had been entitled to hold that the defendant was not estopped by convention estoppel or acquiescence from relying upon section 34. As Lord Steyn held at 913F: It is not enough that each of the two parties acts on an assumption not communicated to the other. But it was rightly accepted by counsel for both parties that a concluded agreement is not a requirement for an estoppel by convention… and at p915D: The evidence does not begin to show that the defendants evinced an attitude that they were content that judgment should be given in Cochin, and that whatever the outcome of the proceedings in Cochin they would not raise a plea or defence elsewhere on the basis of the fact of a judgment in Cochin. There was no evidence to warrant such a finding. Reference was also made to Taylor Fashion Ltd v Liverpool Victoria Trustees Co Ltd [1982] 1 QB 133*, a leading case on the law of estoppel, in which Oliver J propounded a general test of unconscionability for determining whether a party should be estopped, in preference to applying a number of separate technical tests. This case was decided before the Amalgamated case and was cited in argument in that case, but was then unreported. It is now reported in the official law reports immediately following the Amalgamated case. The case concerned tenants who, under separate leases, wished to enforce options to extend their leases given in the leases, which (unknown to the parties at any material time prior to the commencement of the proceedings) were unenforceable for want of registration. The case concerned proprietary estoppel and estoppel by representation. Oliver J rejected the argument that the party sought to be estopped had to be aware of what his strict rights were and of the fact that the other party was acting in the belief that they would not be enforced against him. He held that the approach was a broad one of whether, in the circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he had allowed or encouraged another to assume to his detriment. Both tenants had carried out substantial works to the property they had leased. But, in the case of one of the tenants, his mistaken belief was not the result of encouragement by the lessor, but what he had been told by his own solicitors. In addition, relevant to causation, the work he carried out would have been done anyway, and103 was not done on the faith of the option for renewal. Accordingly, his claim in estoppel failed. * Editor’s note: Also reported sub nom Taylor Fashion Ltd v Liverpool Friendly Society [1979] 2 EGLR 54; (1979) 251 EG 159 The recent case of Co-operative Wholesale Society Ltd v Chester-le-Street District Council [1998] EGCS 76* illustrates that, in appropriate circumstances, a party may be estopped from raising a time-bar. In that case, the parties had made a common assumption that there should not be a reference to the Lands Tribunal of a claim for compensation for land taken under a CPO, save as a matter of last resort. The parties had negotiated for some time, and the district valuer had indeed made offers to the appellant to settle the matter. The Lands Tribunal held that the authority were estoppel from relying upon a statutory limitation defence. On appeal, the main question was whether section 10(3) of the Compulsory Purchase (Vesting Declarations) Act 1981 (under which the reference had been made) was jurisdictional or procedural, so that the statutory limitation period applying to claims thereunder could not be overridden by (for example) estoppel. This point failed. The Court of Appeal also dismissed a further ground of appeal that there was insufficient material to enable the Lands Tribunal to find that the authority were estopped. * Editor’s note: Also reported at [1998] 3 EGLR 11; [1998] 38 EG 153 Issues The principal issues argued on this appeal were: 1. Was the judge correct in his conclusion that each of the parties had made a shared assumption of fact communicated to each other, and upon which both were proceeding, ie that ARC’s claim was not subject to a statutory period of limitation? 2. If so, was it (as the judge concluded) unconscionable for HLB now to rely upon a limitation defence? 3. Did any statement or conduct by HLB amount to promissory estoppel, which would preclude them from relying upon a limitation defence? 4. Was HLB’s letter of 18 March 1994 sufficient notice to bring any estoppel to an end? If so, what was the effect of this notice? Parties’ submissions Appellants’ submissions Mr Joseph Harper QC, for the appellants, made the following submissions: 1. Mr Harper submitted that there were two stages. First, the court had to identify the common understanding upon which the parties were proceeding. Second, the court had to decide whether acting contrary to the common understanding was unconscionable. (These two stages were common ground.) 2. The requirements for convention estoppel were not established in this case in that there was no shared common understanding on limitation. 3. In any event, the claim based upon convention estoppel failed because there was no causation. ARC’s failure to file its claim with the Lands Tribunal was not because of any shared assumption, but because of its own problems in formulating its claim. 4. The judge found that the convention was that the parties had negotiated on a common understanding that ARC had a valid claim for compensation to be agreed. In fact, HLB did not consider ARC’s claim to be valid. They therefore adopted a “wait and see” approach. They considered that ARC’s claim was wiped out by better access and the £400,000 spent on rebuilding buildings to ARC’s specification. HLB were keeping their options open. The recent case of Co-operative Wholesale Society Ltd v Chester-le-Street District Council (1997) 73 P&CR 111 (on appeal [1998] EGCS 76) was distinguishable on its facts. 5. There was nothing that HLB did that would enforce the belief in ARC that there was no limitation period in this case. He submitted that this point had not been considered by the judge. 6. The judge failed to appreciate that whether or not, following the expiry of the limitation period, the parties continued to believe that there remained a valid claim, capable of being resolved, was not the same thing as an understanding between them that HLB would not take any point, whether procedural or otherwise, that might be open to them on a reference to the Lands Tribunal. 7. ARC was in no different position from any other litigant who finds that the law “changes” because of a decision of the House of Lords or the Court of Appeal. It would be odd if there were an estoppel by convention in every such case. The true position was that a party had to take the law as he found it. Where parties had acted upon the basis of a generally-assumed state of the law that was found to be wrong, it was more difficult “to cross the line”. 8. There was no suggestion that the parties had negotiated on any particular basis prior to the expiry of the limitation period. If, in May/June 1988, there had been an application to the Lands Tribunal, there would, on the judge’s findings, have been nothing to stop HLB taking the point. The convention found by the judge came into existence after the limitation period. It was not suggested that the convention estoppel had arisen at any earlier date. 9. The communications in the present case were inadequate to sustain convention estoppel. There had to be something more than “Where is your claim?”. There did not have to be a specific mention of limitation, but there had to be a far-ranging representation that HLB would see ARC right, or that ARC would get some compensation. 10. In any event, until 31 May 1993, the claim for compensation in respect of the lands taken under phase II was not statute-barred, and, accordingly, HLB had continued to negotiate a claim that, in part at least, was not statute-barred. Mr King did not suggest that the limitation period expired on some date other than 31 May 1993. Mr Harper did not demonstrate this submission by reference to the documents. Mr King submitted that the judge was right to reject this argument. The parties still thought that it was necessary to deal with the claim in respect of phase I. We agree with the reasons that the judge gave, set out above, for rejecting Mr Harper’s argument on this point. 11. It was open to ARC at any time after entering onto the land to apply to Lands Tribunal. It did not do so until many years after the claim had been made, and until some 18 months after having been given notice by HLB that there might be a limitation point. ARC had had some 18 months’ notice. In addition, at no time did it take any step or incur any expenditure that it would not have done in any event for the purpose of pursuing the claim. As appears from the correspondence, the valuer’s fees were to be paid by HLB on Ryde’s Scale. Accordingly, there was nothing to feed the estoppel. 12. Mr Harper submitted that the judge had not considered the effect of the words “without prejudice” that HLB had added to their letter dated 10 April 1992. This clearly had the effect that what was said in the letter was to be without prejudice to any rights that HLB might have: see Unsworth v Elder Dempster Lines Ltd [1940] 1 All ER 362. We agree with the judge’s reasons for rejecting this argument. 13. If the appeal on convention estoppel were allowed, the case should be sent back to the judge to find the facts relevant to promissory estoppel. 14. If the appeal were allowed, the court could attach, as a condition to permitting HLB to rely upon the statutory limitation period, that HLB should still pay ARC’s surveyor’s fees in any event. Respondent’s submissions Mr Neil King QC, for the respondent, made the following submissions: 1. The judge was right on the conclusions he drew from the evidence. There was a common assumption that the claim to compensation was valid and enforceable and the parties conducted themselves on the basis that there was a live claim that could be referred to the Lands Tribunal without any limitation period. The common assumption had been communicated between the parties. 2. The relevant transaction here was the payment of compensation. This was common ground. There was nothing to prevent convention estoppel arising in this sort of case. The acquiring authority could not, in any event, require a transfer of the land to them until the compensation had been agreed. 104 3. The convention estoppel in the present case would merely create a procedural bar, and was therefore distinguishable from a convention estoppel, that had the effect of conferring jurisdiction on a tribunal or conferring power on the local authority to pay compensation. 4. The period between entry and reference in this case (13 years) was not unusually long. If the claim was stale, that was bound to redound to the disadvantage of the claimant rather than that of the authority. 5. The requirements for promissory estoppel were satisfied. As from April 1988, HLB were prepared to discuss and negotiate the substance of ARC’s claim for compensation with a reference to the Lands Tribunal as a last resort. Mr Chambers had concerns about the limitation period from late 1991 and Mr Dickinson had concerns from January 1992. If, by this date, there was a shared assumption between the parties, and that had been communicated from HLB to ARC, it would be unconscionable for HLB to consider internally that there might be difficulties about limitation and not to communicate them to ARC. By January 1992, ARC could establish that there was a shared assumption between the parties, because, in September 1990, HLB had agreed to pay ARC’s valuer’s fees. It was highly significant that the limitation point was in Mr Rippingale’s mind when he wrote to ARC on 28 October 1993 assuring them that the matter could proceed to resolution, meaning substantive resolution. 6. On 18 March 1994 HLB mentioned the limitation point to ARC for the first time. The statement was not unequivocal. The letter dated 18 March 1994 was not effective to bring any estoppel to an end. However, from this date there was no common assumption or representation that any statutory limitation period would not be relied upon. 7. When HLB wrote to Lawrence Tucketts on 19 October 1994, stating that counsel had advised that a six-year limitation period “most probably applies”, HLB did not rely upon that reason alone for rejecting ARC’s claim. HLB’s letter dated 19 October 1994 left open the possibility of agreeing the claim. 8. The 11-month period between October 1994 and September 1995 was not too long. There had been delays in the past on the part of HLB, and ARC acted reasonably in giving an opportunity to HLB to reply. The application to the Lands Tribunal would have been made in June 1995 if HLB had not indicated that they would consider the position again. Given that there was a widely-held assumption that there was no applicable limitation period, it was reasonable to wait for HLB to take counsel’s advice. 9. It was unconscionable for HLB to acquire ARC’s property and not pay compensation. If no compensation was payable, then, under Ryde’s Scale, no surveyor’s fees would be recoverable either. Conclusions The principal issue raised by this case is an important one. It is clearly established that a party may waive the right to rely upon a limitation defence and that parties may enter into an agreement to waive the limitation defence: see, for example, Halsbury’s Laws of England vol 28 (1997) paras 842 and 843. The courts will enforce any such waiver or agreement duly made. A party may also be estopped in an appropriate case from relying upon a limitation defence. However, no authority has been cited to us, apart from the decision of the judge in this case, whereby a party has been held disentitled from relying upon a limitation defence merely because he has continued to negotiate with another party about the claim after the limitation period had expired, and without anything being agreed about the manner in which the claim was to be resolved if negotiations broke down. What was happening here was that the parties were negotiating without any regard to the limitation period. At its extreme, the point may be put as it was expressed by Mr Harper in his written argument: if the judge is right, it means that unless a negotiating party expressly draws the other side’s attention to the expiry of the limitation period and expressly negotiates against the background of that threat he will be held estopped from taking the point. As the authorities, the facts and the submissions have been set out above, it is possible to state our conclusions comparatively shortly. The first issue to be considered is whether the judge was right to conclude that the parties shared an assumption that ARC’s claim was a valid claim. The judge’s conclusion was that the only sensible explanation for the letters dated 13 February 1989 and 10 March 1989 was that both parties believed that ARC had a valid claim for compensation. In our judgment, the evidence does not support this conclusion. As the judge found, at all material times HLB took the view that ARC’s claim was not supported by appropriate evidence and was not a valid claim. This was HLB’s position in June 1990 and it remained their position. This case is thus unlike the Co-operative Wholesale Society case, above, in which it was clear that the local authority regarded the claim as one that entitled the claimant to some compensation. In our judgment, the correspondence, upon examination, reflects HLB’s position. The evidence simply does not establish a shared assumption, communicated one to the other, that limitation was not a defence to be relied upon as a basis upon which negotiations proceeded post-April 1988. The point can be tested by considering other defences open to HLB apart from limitation, for example betterment or an equitable bar such as laches. It could not be suggested that, by agreeing to pay ARC’s surveyor’s fees, HLB were restricted from raising any such defence. It is difficult to see how any distinction for this purpose can be drawn between a limitation defence and any other form of defence. There has to be more to establish a convention than simply a request for details of ARC’s claim. Where parties are acting on the basis of some generally-assumed view of the law that turns out to be wrong, more is needed than simply an assumption as to the legal position if a party is to be estopped from taking a defence that he then discovers is available to him. As regards the later correspondence and meetings, it is clear that HLB could not have made or communicated any assumption about limitation after September 1991/January 1992, when Mr Chambers and Mr Dickinson realised that a limitation defence might be available. As we see it, there is nothing in the correspondence between September 1990 and 17 January 1992 that would form a basis for the convention upon which ARC relies. A shared assumption is not, on the authorities, sufficient to establish an estoppel unless it is communicated. It follows that if, in this case, there was no shared assumption to the effect that ARC had a valid claim that was not time-barred, there could be no communication by HLB that they were making any such assumption. It also follows from what we have said above that the communication required would, in any event, be not simply that ARC had a valid claim, but also that HLB would not take any defence that might be open to them on the basis of a statutory limitation period. The next question is whether, in any event, the estoppel was brought to an end by the letter of 18 March 1994. It was common ground that, in this case, any estoppel could be brought to an end by the giving of reasonable notice that HLB intended to rely upon the limitation defence. During that period, ARC would have the option of referring its claim to the Lands Tribunal, and, if it did so, HLB would (if they had been estopped immediately before notice was given) be estopped from relying upon any statutory limitation defence in the proceedings so commenced. Put another way, it would not be unconscionable for HLB to rely upon a limitation defence if they gave such notice and proceedings were not commenced with a reasonable time thereafter. In our view, the letter of 18 March 1994 was an effective warning that if, indeed, there was a good limitation point, HLB considered themselves free to take it. From that date, it could no longer even be suggested that the parties were proceeding on some shared assumption, and ARC was no longer entitled to rely upon there being a common assumption. If a common assumption existed up to this moment in time, ARC was entitled to a reasonable time to react to the disappearance of its assumption. In the circumstances of this claim, that period might be measured in weeks rather than days, but not in months. Even if that were too harsh a view, once the position had been more firmly clarified105 in October 1994, a swift response for ARC was required. To take advantage of any estoppel, ARC would have to have started proceedings within about two months of this date. That period would give sufficient time to establish if there were any room for agreement with HLB and to obtain counsel’s opinion themselves if they wished. On any basis, the delay of a further period of 11 months was too long. We appreciate that the parties had already been dealing with this claim for many years, and that it is not unusual for claims to be referred to the Lands Tribunal many years after the local authority have entered the property being acquired, but that is probably a good reason for acting quickly rather than a reason for further dilatoriness. The point on delay is not capable of being met by asserting that any prejudice, or at least the greater prejudice, would be suffered by ARC and not HLB. There was no reason why proceedings could not be started immediately. For these reasons alone, in our judgment, the appeal must, as respects convention estoppel, be allowed. We turn to the issue of unconscionability below, but we shall next deal with the submissions on promissory estoppel. The judge also alternatively found that there was promissory estoppel. Mr Harper submitted that if the appeal were allowed on convention estoppel, the case should be remitted to the judge on the question of promissory estoppel, as the facts upon which he upheld this claim are not clear. We would have been in favour of this course if we had thought that there was a reasonable prospect of promissory estoppel now being shown. However, it follows from the above that, in our view, ARC would have to satisfy the court that there was some clear and unequivocal representation by HLB to ARC that its claim was a valid one, and, in addition, that HLB would not rely upon any statutory limitation defence. The earliest point in time for a relevant representation is said to be the letter of 17 September 1990. In our judgment, this does not amount to a representation of the type required, and no such representation is to be found in any later communication, when, for the most part, HLB rejected ARC’s claim or emphasised that its claim had to be substantiated. Moreover, ARC has not sought to show that the condition imposed by Mr Rippingale’s letter was fulfilled, ie that the matter was adequately dealt with by the information provided by HLB to ARC. On any view, the letter dated 18 March 1994 gave notice that HLB would be relying upon a limitation defence, and the point made above in relation to estoppel by convention, so far as that notice is concerned, is as valid in relation to promissory estoppel. We now turn to the question of unconscionability. This question does not, as we see it, arise, but, as we have heard a number of submissions on this question, we shall set out our conclusions on it. Unconscionability can potentially involve a wide range of factors, including causation, upon which Mr Harper has particularly relied. The judge does not refer to this argument in his judgment, and it may be that this point was not, in fact, taken as a separate issue at the trial. In a convention estoppel case, the assumption arises by inference or implication rather than from anything said expressly, and this presents difficulties when it comes to showing that the party seeking to rely upon the estoppel took some course on the faith of the assumption as communicated to him by the party to be estopped. Moreover, the difficulties for ARC in this case are increased, because, on the facts found by the judge, it never occurred to Mr Smith and Mr Thompson (representatives of ARC) that there might be a statutory limitation point. In those circumstances, reliance, which is here a matter of inference, cannot be shown. The further points on causation made by Mr Harper are, in our judgment, also sound, namely that ARC was really acting upon the basis of the widely-held view of the law, rather than anything HLB are shown to have said or done. In this connection, it is worthy of note that ARC’s position was, at all times prior to the decision of the Court of Appeal in this case on 7 April 1999, that its claim to compensation was not statute-barred, and that the question of estoppel was not raised at any time in correspondence and only emerged in ARC’s skeleton argument lodged for the hearing before Mr Burnton QC. Another aspect of unconscionability is the question of detriment suffered by the party asserting estoppel. In the present case, the convention estoppel is not alleged to have arisen before the expiry of the limitation period in respect of phase I. Accordingly, Mr Harper submits that detriment cannot be shown. The claim to compensation was time-barred and worthless, and HLB had promised to pay ARC’s surveyor’s fees. There is no evidence as to the amount of loss that ARC suffered apart from the loss of its phase I claim. It may have lost a considerable amount of management time dealing with the claim, or it may have to pay Strutt & Parker for the difference between its fees on Ryde’s Scale (which, we were told, vary according to the amount of compensation obtained) and fees determined on some other basis. The phase II claim may be for a significant amount. Assuming, for the moment, that such loss could be shown and is not trivial, it would not, in our judgment, be an insuperable hurdle for ARC that any estoppel arose after the expiry of the limitation period for phase I. But, clearly, the amount of any such detriment would be a factor to be taken into account if it had been necessary to determine the issue of unconscionability. Mr King relies upon the fact that if there is no estoppel, HLB will be able to acquire land compulsorily for no payment. We do not consider that that is a strong point, because ARC had ample opportunity to refer its claim for compensation to the Lands Tribunal before the limitation period expired. Mr Harper submitted that ARC had done nothing that it would not have done to pursue its claim in any event. In so far as Mr Harper was suggesting that ARC could have incurred no detriment as a result of any convention estoppel, we do not accept his point. If HLB had communicated an assumption to ARC that it would not rely upon any statutory limitation period, ARC would, for the reasons given above, be able to claim that it had incurred expenditure that it would not otherwise have incurred. In our judgment, Mr Harper’s stronger point is that ARC did not rely upon any communication from HLB, and that its loss was not caused by any act of HLB. Finally, Mr Harper suggested that if the court thought fit, it could impose, as a term of allowing HLB to rely upon the statutory limitation defence, that HLB should pay ARC’s surveyor’s fees on the agreed scale. Mr King did not press for this, and, indeed, he informed us that Ryde’s Scale provides for the fee to be fixed according to the amount of the compensation. For our own part, we do not consider that there is a basis for imposing the term suggested if the appeal is allowed. In conclusion, in our judgment, this appeal should be allowed. Appeal allowed.