Saunders v Caerphilly County Borough Council

Compulsory purchase order – Compensation – Limitation – Claimant being entitled to compensation following notice to treat under compulsory purchase order – Claimant seeking reference to Upper Tribunal for assessment and injunction – Whether limitation period applying to claimant’s claims – Whether defendants entitled to raise limitation defence – Whether claimant entitled to injunction preventing use of road – Claim allowed in part The claimant was the freehold owner of Tyn-y-oced Farm, Maesycymmer, Caerphilly. In September 1991, the predecessor in title of the defendant council, as highway authority, served upon him notice to treat under a compulsory purchase order in respect of a strip of land forming part of the farmland needed for the construction of the A469 Lower Rhymney Valley Relief Road. Notice to enter was served in November 1991. Shortly thereafter the defendants entered the strip and built the road which had been used as part of the highway network ever since. The road had the effect of severing the main access to the west of the farmhouse and farm buildings. The road also severed the drainage system and there remained no effective drainage from the buildings. The date of entry fixed the assessment of compensation due under the Compulsory Purchase Act 1965, including that in respect of the value of the strip and for severance, disturbance and injurious affection in respect of the remainder of the farm. It was accepted that the claimant had a statutory right to have the price and compensation determined and that the court could grant an order for those rights. However, over 23 years later, final assessment had not taken place. Accordingly, the claimant applied for an order that the defendants should refer the matter to the Lands Chamber of the Upper Tribunal for assessment and an injunction restraining the defendants from using the strip as a road. The defendants argued that the claims were barred by the Limitation Act 1980. The court ordered three preliminary issues to be tried: (i) whether section 9(1) of the 1980 Act (which imposed a six month limitation period for bringing an action) was applicable to the claimant’s claims; (ii) if so, whether the defendants were prevented from raising a defence based on limitation; and (iii) whether the claimant’s claim for an injunction preventing the use of the road should be struck out under the CPR 3.4(2)(a) as it disclosed no reasonable ground for bringing or defending the claim. Held: The claim was allowed in part. (1) The expression “action” and “cause of action” in section 9 of the 1980 Act were extremely wide. The policy of the Limitation Acts, to prevent stale claims, was equally applicable to claims against public authorities for sums payable by them pursuant to statute. A cause of action might accrue for the purposes of section 9 even though a constituent element of it might have to be determined by someone other than a court of law. An action might be for a “sum recoverable by virtue of [an] enactment” even though the liability in question was not and could not be quantified when the action was commenced. Given the extremely wide ambit of section 9, it was wide enough to embrace the claims as formulated in this case. Regard had to be had to the realities of the situation. The right to compensation was an immediate right arising upon entry which, in the absence of agreement, could only be enforced by reference to the tribunal. In reality, the claimant was seeking to recover a sum of money, namely, the amount of compensation determined by the tribunal: Hillingdon London Borough Council v ARC Ltd (No 1) [1999] Ch 139 and BP Oil UK Ltd v Kent County Council [2003] 3 EGLR 1 applied. (2) The acquiring authority was estopped by convention from relying upon the expiry of the time limit where there were ongoing negotiations between the parties. In the present case, it was clear that the parties had carried on negotiating to try and resolve outstanding issues on the basis of a settlement which each party thought had been concluded, although it was now common ground that there was no such settlement. A letter from the defendants’ head of legal services clearly amounted to clear communication that if matters were not agreed, they would be referred to the tribunal. Furthermore, the defendants had suggested that the parties should continue to negotiate and that commencing proceedings at that stage would serve no productive purpose. Having regard to those factors, it would be unconscionable in all the circumstances for the defendants now to take the limitation defence: Hillingdon London Borough Council v ARC Ltd (No 2) [2000] 3 EGLR 97 applied. (3) As the matter of compensation would now be referred to the tribunal, there was no purpose in granting the injunction sought. Had it been necessary to do so, the court would have decide that, on the basis that section 263(1) of the Highways Act 1980 vested the surface of the road in the defendants as highway authority, there was no reasonable ground for bringing that claim. Guy Adams (instructed by JCP Solicitors, of Swansea) appeared for the claimant; John Pugh-Smith (instructed by Caerphilly County Borough Council Legal Services) appeared for the defendants. Eileen O’Grady, barrister Read the transcript here: Saunders v Caerphilly County Borough Council