Tollgate Hotels Ltd v Secretary of State for Transport [2006] EWLands ACQ_45_2004 (01 June 2006) [2001] EWCA CIV 350

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LANDS TRIBUNAL
[2001] EWCA Civ 350Case No C/2000/0301Venue Royal Courts of Justice, Strand, London WC2, Monday, 19th February 2001
Between
PHYLLIS TRADING LIMITEDAppellant86 LORDSHIP ROAD LIMITED
Before
Lord Justice ThorpeLord Justice ChadwickLady Justice HaleMR. S.W. BICKFORD SMITH (instructed by Messrs Farrington Webb, Brighton) appeared on behalf of the Appellant.MR. N. BACON (instructed by Messrs Perry Short & Cuthbert, London, N7) appeared on behalf of the Respondent.Date 19 February 2001
[1]Tollgate Hotels Ltd v The Secretary of State for Transport [2006] EWLands ACQ_45_2004 (01 June 2006) ACQ/45/2004 LANDS TRIBUNAL ACT 1949 COMPENSATION – Costs – s.4(1) of Land Compensation Act 1961 – s.3(5) of Lands Tribunal Act 1949 - S. 11(1) of Compulsory Purchase Act 1965 – Interest payable on compensation agreed for injurious affection – Delay in accepting sealed offer – Reason for order for costs against claimant. IN THE MATTER OF A NOTICE OF REFERENCE BETWEEN TOLLGATE HOTELS LIMITED Claimant and THE SECRETARY OF STATE FOR TRANSPORT Acquiring Authority Re: Plot Numbers 102, 103 & 104 on deposited plans and in the book of reference referred to in the Channel Tunnel Rail Link Act 1996 together with the land and buildings at Tollgate Hotel, Watling Street, Gravesend, Kent, DA13 9RD. Before: His Honour Michael Rich QC Sitting at Procession House, 110 New bridge Street, London EC4V 6JL on 22 May 2006 Miss Camille Slow for the Claimant instructed by Berwin Leighton Paisner Mr Neil King QC for the Acquiring Authority instructed by Ashurst. The following cases are referred to in this decision: Bell v Mahoney (17 th May 1991) (Vinelott J) Chapter Group PLC v London Regional Transport (CON/87/2004) English Property Corporation v Royal Borough of Kingston-Upon-Thames (1988) 77 P&CR 1 Hughes v Doncaster Metropolitan Borough Council [1991] 1 AC 382 Lee v. Herbert-Smith [2000] RVR 227 Morris v Wiltshire and Woodspring District Council (27 th November 2001) (Roderick Evans J ) Phyllis Trading Limited v 86 Lordship Road Limited [2001] EWCA Civ 350 Purfleet Farms Limited v Secretary of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430 DECISION The parties, have agreed the compensation to be paid on the acquisition of certain land within title number K594745 on the West side of Wrotham Road in Gravesend Kent, for the purposes of the construction of the Channel Tunnel Rail Link. They now seek a determination of the costs of the Reference to this Tribunal, incurred later than 19 th October 2004, to be paid by either party. It is agreed that the Authority should pay the Claimant's costs up to that date which was the date of an offer made in accordance with s.4 of the Land Compensation Act 1961 ("the sealed offer").[2]Section 4(1) of the Act of 1961 provides that "Where .. (a) the acquiring authority have made an unconditional offer in writing of any sum as compensation to any claimant and the sum awarded by the Lands Tribunal does not exceed the sum offered; … the Lands Tribunal shall, unless for special reasons it thinks proper not to do so, order the claimant to bear his own costs and to pay the costs of the acquiring authority so far as they were incurred after the offer was made …[3]The land, in respect of which the Reference was made, was the subject of notice to treat dated 26 th June 1998 and entry was duly taken on 8 th October 1998. Except however for a very small slither of land of less than 10 square metres, the land was required only for the period of the construction of the works authorised by the Channel Tunnel Rail Link Act 1996, and has, as I understand it, been returned to the Claimant. No value was therefore attached to the land itself in the claim, which was for £1,045,000 for injurious affection.[4]The land said to be so affected was at least primarily land within a different title number on the East side of Wrotham Road. This claim is made in accordance with s.7 of the Compulsory Purchase Act 1965, which 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 Authority denied that the Claimant's land on the East side of Wrotham Road was held with the land taken, so as to entitle the Claimant to compensation for injurious affection to it under s.7 of the Act.[5]Reference was made to the Tribunal for the assessment of compensation on 25 th June 2004. The sealed offer was made in a letter from the Authority's solicitors to the Claimant's solicitors in the following terms:
"For the purposes of section 4(1)(a) of the Land Compensation Act 1961, we hereby make on behalf of CTRL (UK) Limited as agent for the Secretary of State an unconditional offer of compensation in the sum of £205,000 .. together with your client's reasonable legal costs and surveyors' fees up to the date of this letter in full and final settlement of your client's claim in connection with the acquisition of its interest in part of the land held within title number K594745 which is the subject of the above reference."
[6]The sealed offer was refused by letter dated 3 rd November 2004 and the parties made a joint application for the trial of a preliminary issue which was ordered by Order dated 4 th January 2004 as follows:
"Whether the applicant is entitled to make a claim for injurious affection pursuant to section 7 of the Compulsory Purchase Act 1965."
Rule 44(1) of the Lands Tribunal Rules 1996 makes provision for the sending of a sealed offer by the claimant to accept a sum as compensation to the Registrar to the Tribunal. Such offer has no statutory effect and so this is not a common course. Nevertheless the Claimant did, in this case, by letter dated 21 st January 2005, make such an offer in the sum of £650,000 "as compensation in full and final settlement of the above claim plus professional fees, VAT and disbursements". This was not formally refused until 6 th July 2005. Its relevance is confined to its form, which follows that of the sealed offer and, in my judgement, throws light on the Claimant's understanding of that offer.[7]The preliminary issue, as formulated by consent between the parties came on for hearing before the President on 15 th July 2005. He, however, raised the question whether the Claimant could be entitled to claim compensation for injurious affection caused by the use of works constructed on land not taken from the Claimant, if the use of the land taken did not itself cause any injurious affection. The hearing was therefore adjourned so that the scope of the preliminary issue could be reconsidered.[8]It was in these circumstances that the Claimant's solicitors wrote to the Authority's solicitors on 11 th August 2005 attempting to re-open negotiations. The Authority's solicitors confirmed that the sealed offer had not been withdrawn and therefore was still open for acceptance, but said:
"my client is not ..willing to enter into any further negotiations with a view to agreeing compensation in excess of the amount outlined in our sealed offer."
The solicitor for the claimant thereupon sought an assurance that if the Claimant accepted the sealed offer each party should bear its own costs after 19 th October 2004. The Authority's solicitor replied on the 23 rd August 2005 saying that if the offer was accepted, the Claimant should not only bear its own post-offer costs but also pay the Authority's costs from 19 th October, 2004. To this the solicitor for the Claimant replied on 12 September 2005:
"In full and final settlement of the above claim my client accepts the sum of £205,000 in compensation from the Acquiring Authority together with: Interest from the date of entry to the date of payment; My client's reasonable legal costs and surveyors fees up to 19 th October."
By a letter of the same date the Lands Tribunal were informed of the Claimant's acceptance of the offer. By letter dated 22 nd September 2005, the Authority's solicitor acknowledged the letter "accepting my client's sealed offer of £205,000 (the "Compensation Sum")" and going on to say:
"My client accepts that, in addition to the Compensation Sum, it will be liable to pay statutory interest from the date of entry, together with your client's reasonable professional fees incurred up to 19 th October 2004"
I shall refer to the resulting agreement to pay £205,000 plus interest and to pay reasonable costs to 19 th October 2004 as "the agreement".[9]The Claimant's solicitor's letter to the Authority's solicitor had continued by saying that the costs from 20 th October 2004 should be a matter for negotiation. Neither side has suggested that this reservation had any effect upon the agreement so reached as to the Compensation Sum, interest or costs until 19 th October 2004, because clearly the sealed offer did not deal with such costs. Since the issue as to costs thus left has not been resolved by negotiation, it is agreed that it now falls for determination by this Tribunal under the jurisdiction provided by s.3(5) of the Lands Tribunal Act 1949 to order that "the costs of any proceedings before it incurred by any party shall be paid by any other party". Claimant's case[10]Miss Slow on behalf of the Claimant contends that so far from the Claimant's paying the Authority's post-offer costs (to which I will refer in this Decision merely as "the costs", because there is no issue as to costs up to 19 th October 2004) the Authority should pay the Claimant's costs, because the agreement, by including interest from the date of entry, exceeded the amount of the sealed offer. This is said for either of two reasons:(i) because no "statutory interest" would have been payable on the award of compensation for injurious affection under s.7 of the Act of 1965; or(ii) because the sealed offer properly construed was of £205,000 to include any entitlement to interest.[11]If Miss Slow was right on either of these points Mr King did not seek to persuade me that the proper order as to costs would be other than that the Claimant should recover the whole of its costs reasonably incurred. Except for good reason, including a failure to "beat" a sealed offer, a Claimant for compensation for compulsory acquisition is entitled to the costs of making its claim (see Lands Tribunal Practice Directions 2005, para 20.3).[12]It is on this basis that Miss Slow maintains that even if the sums agreed to be paid are the same as included in the sealed offer, the proper exercise of the Tribunal's discretion should be to make an order that each party bears its own costs, that is to say to make no order. Interest on Compensation for Injurious Affection[13]The interest which has been agreed to be paid is to be calculated in accordance with s.11 of the Compulsory Purchase Act 1965 which is headed "Powers of Entry" and provides as follows:
"(1) If the acquiring authority have served notice to treat in respect of any land and have served on the owner .. 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 at the rate prescribed under section 32 of the Land Compensation Act 1961 from the time of entry until the compensation is paid .."
[14]Miss Slow submits that, but for the agreement arising from the insertion of the first bullet point in the Claimant's solicitor's letter of acceptance dated 12 th September, no interest would have been payable on compensation agreed. Their letter must therefore be construed as a counter-offer which the Authority's solicitor must be construed as having accepted by the mistaken acceptance of an existing liability to pay statutory interest made in the letter of 22 nd September.[15]She submits that this follows from the definition of that which is to carry interest namely "compensation.. for the land which is taken", whereas compensation for injurious affection is compensation for the diminution in value of the land retained. This she submits is a separate head of compensation from compensation for the value of the land to be purchased and she relies upon some words used by Lord Bridge of Harwich in giving the sole speech in Hughes v Doncaster Metropolitan Borough Council [1991] 1 AC382. In that case, the House of Lords decided that Rule (4) in section 5 of the Land Compensation Act 1961, which excludes any increase in the value of land "by reason of the use thereof .. in a manner .. contrary to law" did apply to compensation for disturbance because such compensation was part of the value of the land. At p.390 Lord Bridge said:
"It is well settled law that whatever is payable to an owner on compulsory acquisition of his land in respect of disturbance is an element in assessing the value of the land to him, not a distinct and independent head of compensation. This is because, under section 63 of the Lands Clauses Consolidation Act 1845 (8 Vict. C. 18), the substance of which is now re-enacted by section 7 of the consolidating compulsory Purchase Act 1965, "the value of the land to be purchased by the acquiring authority" is the only head of compensation under which compensation for disturbance is capable of being accommodated. The other heads of compensation for which the section provides, severance and injurious affection, relate only to the depreciatory effect of the acquisition on other land retained by the owner. Judicial interpretation of the Act of 1845 held that the value of the land is its value to the owner, not its value to the acquiring authority."
The distinction which was being made was between use of the land taken and depreciatory effect upon land retained. The only compensation under s.7 is for the land taken, even if in assessing it regard is to be had "not only to the value of the land to be purchased but also to the damage to be sustained to the owner of the land by reason of [severance or injurious affection]." It is therefore, in my judgement, a single award of compensation for the land of which possession is taken for the purpose of interest under s.11.[16]This Mr King drew to my attention was the view taken of the existing law by the Law Commission in their consultative report on the Law of Compulsory Purchase para 8.33, where after referring to the right to interest under s.11(1) they say "No distinction is made for this purpose between different heads of compensation (e.g. value of land, disturbance or severance)". To exclude interest in the case of injurious affection when land is taken would moreover create an anomaly with the position where land is not taken. In such case s.63 of the Land Compensation Act 1973 provides that interest should be recoverable from the date of claim. This provision was, as I understand it, made precisely to bring the position where compensation was awarded for injurious affection, in circumstances where land was not taken from the claimant, into conformity with the position where land was taken.[17]I have no doubt that the solicitor for the Authority was right to accept that any compensation agreed to be paid for land the subject of notice to treat, in satisfaction of a claim under s.7 of the Act of 1965, in circumstances, such as the present case, where possession of that had been taken, carried interest under s.11 from the date of entry until payment. Construction of sealed offer[18]Miss Slow's second reason for submitting that the agreement exceeded the sealed offer is more attractive. The sealed offer was said to be " in full and final settlement of your client's claim in connection with the acquisition of its interest .. which is the subject of the .. reference." It is clearly arguable that a claim for interest on any sum agreed, would be a claim "in connection with the acquisition". I have, however come to the conclusion that it is not, on the proper construction of the sealed offer, part of the claim the subject of the reference, in respect of which the sealed offer of £205,000 was made.[19]The sealed offer was expressed to be for the purposes of s.4(1)(a) of the Land Compensation Act 1965. That requires an unconditional offer of any sum "as compensation ". If the sum then awarded by the Lands Tribunal does not exceed the sum offered, the costs consequences of entitling the Authority to its costs after the offer, follow. Not only does this not contemplate a comparison between the offer and the award including interest as at the date of the award, but it uses language which corresponds with that of s.11(1) of the 1965 Act for the sum which is to "carry interest", namely the "compensation agreed or awarded".[20]Miss Slow referred me to an unreported judgement of Roderick Evans J. in Morris v Wiltshire and Woodspring District Council (27 th November 2001). In that case, before an assessment of costs, an offer of £14,000 was made on behalf the Defendants "in full settlement of your claim for costs". Having referred to a decision of Vinelott J. in another unreported case of Bell v Mahoney (17 th May 1991), the judgement concluded that that was "an all-in figure", that is including the interest which by s.17 of the Judgments Act 1838 "Every judgment debt shall carry .." This is, of course, the same phrase as appears in s.11(1) of the Compulsory Purchase Act 1965. In the case of compensation on compulsory purchase, however, it is the sum awarded or agreed which is to carry interest. In the case of the claim for costs it is the judgment debt, including therefore the costs awarded, when assessed, which carries interest. It is however in respect of the claim for costs, including therefore such interest as had accrued from the date of judgement, that the offer was being made "in full settlement". Every document must, of course, be construed according to its natural meaning, in its context. I do not think that the natural meaning would include interest. Still less, when the context of the offer is considered. By the time the sealed offer was made, over six years had passed since entry had been made. I do not think that any reasonable author of the offer or recipient of it, could construe it as including over £50,000 of interest. Particularly in that context, the natural meaning of the sealed offer is, in my judgement, that it was an offer of a sum to be agreed which would then carry interest.[21]If I had any doubt as to the true meaning of the offer, which I do not, I should still exercise my discretion as to costs in the same way as if the offer had been thus exclusive of interest. I should do so for two reasons. Firstly it is agreed to be appropriate to take into account any admissible offers and the conduct of the parties in response to such offers. If the Claimant was in doubt as to the true intention of the Authority, or would have been willing to accept the offer providing that it was indeed an exclusive offer to which interest would be added, he should at least have enquired or made a counter-offer accordingly. Since the Claimant did not do so, he should be treated in the same way as I am confident that he would have been answered if he had done so. Secondly, however, I think that it was unnecessary for him to do so, because even if an objective construction of the offer ought to have compelled the conclusion that it included interest, there was no misunderstanding as to what the Authority's intention was. That, in my judgement is clear firstly from the phraseology of the Claimant's own sealed offer which, I have no doubt was not intended to include interest, but also from the form of the Claimant's acceptance letter. The first bullet point is not even asking for reassurance. It is a statement of the mechanics of an offer which the letter accepts. Discretion[22]The parties agree:(1) The Lands Tribunal has a discretion to award costs under s.3(5) of the Lands Tribunal Act 1949;(2) In the absence of an award, that discretion is not fettered by s.4(1) of the Land Compensation Act 1961;(3) The Civil Procedure Rules do not apply;(4) The starting point in case of a Reference to the Lands Tribunal of compensation for compulsory purchase is "that the cost of determining the amount of disputed compensation should fall on the acquiring authority to whose use of compulsory powers the need to determine compensation was attributable (see per Potter LJ in Purfleet Farms Limited v Secretary of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430 at para 27 citing English Property Corporation v Royal Borough of Kingston-Upon-Thames (1988) 77 P&CR 1;(5) Nevertheless the Lands Tribunal may depart from that starting point where there are sufficient reasons for doing so. Miss Slow suggested that "special" reasons are necessary. Mr King suggested a test of "good" reasons;(6) Unreasonable conduct in the conduct of the Reference would constitute such reason to deprive a claimant of costs or to make an order that he should bear some or all of the costs of the Reference as appropriate.[23]In Chapter Group PLC v London Regional Transport (CON/87/2004), I reviewed some other cases in the Lands Tribunal where unconditional offers had been accepted other than immediately. In those cases the offers had been late or defective. In the Chapter Group case, the hearing was fixed for 3 rd October 2005. An offer made on 2 nd August 2005 was accepted on 26 th September 2005. I said at paragraph 15:
"I see no reason why the claimants should not have been allowed until 23 August to consider and accept the sealed offer, and no evidence has been adduced as to why a longer period should be allowed. I think that the claimants should have their costs to that date. On the other hand, in the absence of explanation as to why the acceptance was delayed, I think that the delay beyond a reasonable time for acceptance must be treated as unreasonable conduct in the proceedings. I do not, therefore, think that they are entitled to further costs until the date of their acceptance of the offer. Moreover, since their unreasonable conduct has put the Authority to expense there is special reason for a different order. Accordingly the Authority should be awarded its costs from 24 August until 26 September"
. The rest of the Decision was concerned with the costs of the dispute as to the costs order, which may be material when the costs of the hearing before me come to be considered. I am presently concerned only with the cost of these proceedings from the date of the sealed offer on 19 th October 2004 until acceptance on 12 th September 2005.[24]In allowing three weeks for consideration of the sealed offer I was adopting the period during which, under CPR Part 36.11, a claimant may accept a Part 36 offer or payment without needing the permission of the Court. If a sealed offer is not accepted at all, then the statutory rule requires that the claimant should pay the authority's costs from the date of the offer unless the Tribunal finds that there is special reason for a different order. It does seem to me, however, that where the claimant does accept the offer, and the Tribunal has a discretion as to costs, the claimant should be entitled to the benefit of the ordinary rule that he should have the costs of the claim for a sufficient time to enable him to be advised on and to consider the offer. The choice of three weeks in the Chapter Group case was no more than an estimate of such reasonable time which, in the circumstances of that case was not disputed. In the present case, the time required for advice and consideration appears to have been slightly less, namely until 3 rd November 2004, on which date the Claimant "declined" the sealed offer. I would award the claimant its costs to that date.[25]Miss Slow accepts, on the basis that I am against her as to whether interest would have been payable on the sum agreed, that from that time the claimant cannot expect to be awarded its costs. She, none the less, submits that, in the absence of special reason, no order for costs should be made against the Claimant. She particularly relied upon the decision of Mr P.H.Clarke FRICS in Lee v Herbert-Smith [2000] RVR 227. In that case, the LVT had determined a price on collective enfranchisement of some flats of £4,500. The freeholder had appealed. The purchaser made an offer of £6,250 for the freehold interest "without prejudice save as to costs" but did not make any reference to the payment of the costs of the appeal if the offer were to be accepted. The freeholder, who had lodged an expert report in support of a price of £9,200, accepted the offer within a fortnight, but then claimed the costs of the appeal on the grounds that he had been successful or alternatively on the analogy of having accepted a payment into court. Mr Clarke pointed out that the CPR did not apply and the offer should not be construed as if made on terms that the purchaser would pay the costs of the appeal. Nor was the Tribunal prepared to treat the freeholder as the successful party. It was a compromise and without a hearing it was "impossible to say what the result [of the appeal] would have been". Accordingly at paragraph 21 of his Decision Mr Clarke said:
"It cannot be said that the landlord abandoned his high figure or that the purchasers abandoned their low figure. The respective merits of the parties' cases are unresolved; they have reached agreement, by each giving ground, in order to avoid a hearing. Justice and fairness require each party to bear their own costs."
I would not disagree with such conclusion, and indeed in Phyllis Trading Limited v 86 Lordship Road Limited [2001] EWCA CIV 350 at paragraph 21 Chadwick LJ said that the decision was "plainly correct for the reasons which he gave – namely that the merits remained unresolved".[26]This does not however mean that a party can accept an offer so as to avoid a determination of the merits and thereby avoid the cost consequences of his delay in acceptance. In the Phyllis Trading case the Court of Appeal allowed an appeal as to costs from the Lands Tribunal where it held that the Member had wrongly disregarded a Calderbank offer of £4,000 as the price payable for a freehold on enfranchisement. The Tribunal had determined the price at £3,610. Chadwick LJ said at paragraph 25:
"The obligation on the landlord, to whom the offer was made, was to give consideration whether or not to accept it. In the circumstances that the offer turned out to be £390 greater than the amount determined by the Lands Tribunal, thereby leaving a significant margin of nearly 10 per cent to cover whether costs had been incurred by the landlord prior to the offer, I am satisfied that the decision to reject the offer out of hand was unreasonable. It is important, in low value cases of this nature, that a landlord (who, in practice, is the usual appellant) should not be in a position to insist on a higher price for the freehold than that objectively justified, by the threat, express or implied, that, if his terms are not met, he will obtain an order for substantial costs if he succeeds in increasing the valuation by only a relatively small amount."
[27]The Lands Tribunal's jurisdiction to determine compensation on compulsory acquisition is very different from its appellate jurisdiction in small enfranchisement cases. Now, indeed the Lands Tribunal has power to award costs in such cases only as provided by s. 175 of the Commonhold and Leasehold Reform Act 2002. Nevertheless what Chadwick LJ said there as to the undesirability of allowing parties to reject reasonable offers out of hand because they can use the threat of costs if they succeed by only a small amount, does seem to me to be in point. It will be a disincentive to the proper consideration of sealed offers if the claimant can rely on being able to accept it at any time without being liable for costs incurred during any period after the offer. I accept that if such an offer, which if made unconditionally remains open even during the hearing, were accepted only during the hearing, that would be a special reason for an adverse order as to costs. But in my judgement a major consideration in the exercise of the Tribunal's discretion as to costs on acceptance of an offer, has to be what would be conducive of early reasonable and proper settlements.[28]Miss Slow pleads in this case that the Claimant felt forced to compromise because of the escalation of the case after the President's intervention. As his solicitor put it in his letter dated 11 th August 2005, asking the Authority to re-open negotiations:
"My client is a businessman who is alive to the commercial realities of the position. He is well aware, having been advised, that the issues raised by [the President] raise novel and interesting points in the law of compulsory purchase and compensation in relation to which it is unlikely that the Lands Tribunal would be the final forum for determination of the issues raised. To reach a final resolution of the issues involved could therefore take many months if not years with very considerable legal costs being incurred. With an eye to commerciality, my client would rather settle this matter out of court now before the matter gets weighed down with legal arguments with escalating costs."
I cannot help but be sympathetic to the plight of a litigant who discovers that his case is not as simple as he had at first thought or even been advised. As Miss Slow pointed out however this was an "all or nothing case", at least in the sense that the Authority not only disputed the Claimant's figures, they actually denied its entitlement to any compensation for injurious affection. It was in such circumstances that the Claimant had waited nearly six years before even making its reference. No doubt it had been advised as to the strength of its case before doing so.[29]Although the Authority's view was that there was no injurious affection to be compensated, it made its sealed offer in the hope of avoiding the costs of a hearing. There is no suggestion that the reason why that offer became more attractive to the Claimant than it first seemed was in any sense the fault of the Authority, or that the Authority misled the Claimant as to its prospects of success or withheld some material or even some argument which was not available to the Claimant when the offer was first made. Cases do develop and if an Authority wishes to make an early sealed offer it must do so on its then appreciation of the case. The Claimant then takes at any rate some risk as to costs in rejecting such an offer, based, no doubt, on its appreciation of the case. The question in each case must be with what degree of impunity it can take further time for consideration of an offer whose purpose is to safeguard the Authority as to costs.[30]I do accept that it requires a special reason to deprive a Claimant for compensation on compulsory acquisition of his costs of resolving any dispute as to the amount of such compensation. In my judgement, however, the rejection of or failure to accept a sealed offer within a reasonable time is such a reason. Moreover, without explanation, such for example as there being circumstances not properly known or capable of being known to the Claimant, rejection of an offer which the Claimant thereafter decides to accept, constitutes unreasonable conduct in the conduct of the claim. There is no issue that a claimant should normally be liable for the costs consequences of unreasonable conduct, that is to say should bear the Authority's costs resulting from such conduct. I am unable to find anything in the circumstances of the claim or the offer or its rejection, which should lead to an order for costs other than in accordance with such principles.[31]Accordingly I determine that the Authority should pay the Claimant's costs to 2 nd November 2004 and the Claimant should pay the Authority's costs to 12 th September 2005, in each case to be assessed by the Registrar if not agreed.[32]If either party seeks an order for costs subsequent to that date they may make application, preferably with agreed directions as to the determination of that application no later than 23 rd June 2006. Unless such application is made by that date this Decision will be final on that date. Dated 1 June 2006 His Honour Michael Rich QC

Cited in 3 later judgments