SITA (formerly ELENEZER MEARS (SAND PRODUCERS) LTD) v SURREY COUNTY COUNCIL ACQ/129/1999

UPPER TRIBUNAL
LANDS CHAMBER
ACQ/129/1999Case No ACQ/129/1999
Between
SITA (formerly ELENEZER MEARS (SAND PRODUCERS) LTD)ApplicantSURREY COUNTY COUNCILRespondent
Before
The PresidentVenue 48/49 Chancery Lane, London WC2A 1JRDate 8 January 2001Hearing 19 and 20 December 2000Property: Mineral Bearing Land and Associated Landfill, Guilford Road, Runfield, SurreyCatchwords: COMPENSATION – preliminary issue - limitation - reference made more than 6 years after entry – whether acquiring authority prevented by election or promissory estoppel from relying on limitation defence – held facts not establishing election or promissory estoppel
[1]The question in this preliminary issue is whether the claimant’s reference to this Tribunal of its claim for compensation is statute-barred under section 9(1) of the Limitation Act 1980. Under the County Council. of Surrey Guildford Road (A31)(Runfold Diversion) and Blackwater Valley Route (Southern Section) Compulsory Purchase Order 1991 the acquiring authority were authorised to acquire a number of plots of land owned by the claimant’s predecessor, Ebenezer Mears (Sand Producers) Limited (“Mears”). Mears objected to the CPO, but by an agreement with the acquiring authority of 10 December 1991 it agreed to withdraw its objection. There was provision that Mears’s right to compensation would not be affected by the agreement.[2]Notice to treat and notice of entry were served, in relation to the majority of Mears’s land, on 11 December 1992, and, in relation to one plot that had been omitted from these first notices, on 23 December 1992. The acquiring authority entered into possession on 25 December 1992, in relation to part of the land, and on 28 April 1993 in relation to the remainder. Agreement was never reached on the compensation, and the claimant gave notice of reference to this Tribunal on 20 September 1999.[3]In Hillingdon London Borough Council v ARC Ltd [1998] 1 WLR 174 (upheld by the Court of Appeal [1999] Ch 139) it was held that a reference to the Lands Tribunal to resolve a question of disputed compensation is an action to recover a “sum recoverable by virtue of any enactment” within the meaning of section 9(1) of the Limitation Act 1980. Accordingly such a reference must be made within 6 years of the date on which the cause of action accrued, that is to say, the date of entry. In the present case, therefore, the reference had to be made before 25 December 1998, for the major part of the land, and before 28 April 1999 for the remainder; and it was thus out of time. The acquiring authority take the limitation point and ask for a determination that the Tribunal has no jurisdiction to entertain the reference. The claimants contend that by the conduct of their agents before and after 25 December 1998 the acquiring authority have waived their right to rely on a limitation defence. Mr Neil King QC puts the case both on the basis of election and on the basis of promissory estoppel.[4]A claim for compensation was made on behalf of the claimant on 10 June 1993. Details of the claim were provided later and revised claims have been made. There have been discussions on the claim since 1993 – between Mr W J Voaden (formerly of Grimley J R Eve, later of Voaden Sandbrook) on behalf of the claimants and Mr A E S Eastman of Bruton Knowles and Mr S J Cox of Wardell Armstrong on behalf of the council. Mr Voaden and Mr Cox are both mineral valuers, and Mr Eastman specialises in compulsory purchase, land compensation and asset valuation. The discussions were somewhat desultory and there was a period between October 1997 and late May 1998 when there was no communication at all between the parties. On 27 May 1998 Mr Voaden wrote requesting a meeting to progress negotiations. A meeting was eventually held on 10 July 1998 at which aspects of the claim were discussed, and a further meeting was held on 14 September 1998. This resulted in a revised claim from Mr Voaden on 2 November 1998. Mr Cox wrote to Mr Voaden on 6 November 1998, saying that he awaited instructions from the council to liaise with him on the claim details. Mr Voaden wrote back on 10 November 1998 expressing his concern that there was a need for Mr Cox to get further instructions from the council, and concluding: 2 “As you will note, I have copied this letter to your client contact and hope that a truncated response can be agreed so that this matter does not drag on beyond the 6 year issue that may require references to be lodged.”[5]On 25 November 1998 Mr Cox wrote a further letter to say that the council were not minded to issue further instructions to Wardell Armstrong to negotiate because the significant difference between the claim and their assessment was unlikely to bridged. On 15 December 1998 Mr Eastman telephoned Mr Voaden to say that the council had agreed to Mr Cox having a further meeting with him before Christmas to progress negotiations. The significance of Christmas, of course, was that that was when the limitation period expired; and it is not in dispute that both parties were conscious of this. Mr Eastman asked Mr Voaden to telephone Mr Cox’s secretary to agree a date and time for the meeting. On 16 December 1998 Mr Voaden sent a fax to Mr Cox asking him to contact him “with some dates when we could meet up, in Cardiff, early in the New Year” to discuss the claim.[6]In a telephone call on 17 December 1998 Mr Cox offered Mr Voaden a meeting on 21 or 22 December, but Mr Voaden said that he could not manage either of these dates. A meeting was arranged for 7 January 1999. Mr Cox confirmed the meeting in a letter of 17 December 1998. He said:
“I confirm that I am available to meet with you on the 21 December or 22 December but understand that you are not available on these dates. Consequently, I confirm the arrangements made on the telephone for us to meet at my office on Thursday 7 January 1999 at 10.00 am. The meeting is to be held strictly on a ‘without prejudice’ basis with the objective of identifying the matters of fact and/or opinion which can be agreed and also that which is disagreed.”
[7]At the meeting on 7 January 1999 Mr Voaden and Mr Cox discussed the factual elements of the claim. Mr Cox’s note of the meeting records:
“WJV [Mr Voaden] said that his client did not propose to refer the Compensation Claim to the Lands Tribunal but were seeking a reasonable settlement … BFI are seeking to achieve a reasonable settlement of the minerals compensation claim by way of negotiations and not referral to the Lands Tribunal.”
[8]Mr Voaden wrote to Mr Cox on 14 January and again on 4 March 1999 supplying further factual information. In the second letter he suggested a further meeting, and Mr Cox responded on 12 March 1999 saying that he would take his client’s instructions. In a letter of 9 April 1999 Mr Voaden sent Mr Cox a further valuation.[9]On 28 April 1999, not having heard further from Mr Cox, Mr Voaden wrote seeking confirmation that all the information required had been received. On 21 May 1999 Mr Cox replied confirming that all information in support of the mineral and waste compensation claim had been received; that it had been considered and a report was being prepared for the council, from whom they would seek further instructions. 3[10]In June Mr Voaden got in touch with the council direct to express his concern at the delay in a response from them. In a letter of 18 June 1999 he said:
“We still await the ability to have a negotiation meeting on the matter to see whether the two parties can come to an agreement, if there is any way in which an early date can be set for such a meeting my clients would be most obliged. If at the end of a short negotiation process that both parties believe that there is no opportunity of agreement then the decision must be taken whether a reference should be made to a Lands Tribunal. We hope that this will not be the case.”
[11]The reply, dated 25 June 1999, came from Bruton Knowles. It said that the council were considering the report that Wardell Armstrong had prepared, and went on:
“I would have to advise you however, that we believe your client is out of time to make a reference to the Lands Tribunal. We are currently seeking further legal advice on this point, however are of the opinion that the claim will have to be settled by negotiation.”
[12]Mr Voaden wrote on 2 July 1999 saying that he could not accept that his clients were out of time to make a reference and seeking a substantive response. No such response came, and on 20 September 1999 Mr Voaden lodged a notice of reference at the Tribunal on behalf of his clients.[13]In evidence Mr Voaden said that he first became aware of the Hillingdon decision in about April 1998 and had it in mind at the time of the meeting on 14 September 1998 and afterwards. His understanding was that, although there was a 6-year time limit within which notice of reference could be given, this did not apply where a detailed claim had been made and negotiations had begun before and had continued after the expiry of the period. Earlier in 1998 he did, however, advise his clients to make a reference but they asked him not to do so as they were in negotiations with the council on another matter. He had a further meeting with his clients on 11 November 1998 and he was asked to continue negotiations rather than to make a reference. He told them that the council had not raised the issue of the limitation period and, since they had not, there was a case for proceeding with negotiations. He had pointed out to them that the facts were different from those in the Hillingdon case.[14]Mr Voaden said that the first time that the council or its agents had mentioned limitation was in Bruton Knowles’s letter of 25 June 1999. He denied that it had been raised at the meeting of 14 September 1998, as Mr Cox’s note had recorded. Neither his own note of the meeting nor that of Mr Eastman contained any such reference. He said he could not recall Mr Cox having pointed out the imminent expiry of the limitation period when they spoke on 17 December 1998. He accepted that the conduct of negotiations in 1999 was not inconsistent with any offer the council might make being an ex gratia offer, but he said that he had not been told that this was the basis. As far as he was concerned the conduct of negotiations was on the same basis as before, and his belief was that negotiations were continuing, with the ability to refer to the Lands Tribunal still remaining.[15]Mr Eastman said in evidence that he had been personally involved in the case since October 1993, first while he was in the Property Services Department of WS Atkins plc and then from 1997 4 when he joined Bruton Knowles. He referred to correspondence and notes of meetings. He was present at the meeting on 14 September 1998, which took place at Voaden Sandbrook’s Beaconsfield offices, and he recalled that the Hillingdon case was mentioned then by Mr Cox to Mr Voaden. He was aware of Mr Cox’s view that Mr Voaden was failing to provide sufficient information about the claim to enable the compensation claim to be properly considered. His expectation was that there would be a reference to the Lands Tribunal before 25 December 1998, but as time passed this became increasingly unlikely. After he had notified Mr Cox on 15 December 1998 of the council’s agreement to Mr Cox having one further meeting with Mr Voaden, he was telephoned by Mr Cox on 17 December 1998. Mr Cox said that Mr Voaden was unable to attend a pre-Christmas meeting but that a meeting had been fixed for 6 January 1999. Because this was beyond the 6-year limitation period, Mr Eastman told Mr Cox that it must be stipulated that the meeting was not for negotiation but for the receipt of previously requested data to enable Wardell Arsmstrong to report back to Bruton Knowles and the council. Mr Eastman thought that their client’s best interests would be served by making an ex gratia offer outside the limitation period. He did not recall Mr Cox saying that he had already mentioned to Mr Voaden that the limitation period was about to expire.[16]Mr Eastman expected that an ex gratia offer would be made to the claimants on the basis of information eventually to be supplied by Mr Voaden. He had prepared a draft letter for sending when the information had been provided. It was approved by the council, but the approach changed later, and the council decided that no offer should be made. Negotiations as such did not take place. Mr Voaden in his letter of 18 June 1999 was saying that he had been frustrated in his attempts to negotiate, and Mr Eastman agreed with this. Mr Voaden had only been asked to provide data.[17]Mr Cox said that at the meeting on 14 September 1998 he brought up with Mr Voaden the Hillingdon decision. Mr Voaden had said that he was aware of it, but he was dismissive about it, saying that ARC had appealed. He was surprised when Mr Voaden had sent a fax requesting a meeting in the new year, and when he spoke to him on 17 December 1998 Mr Cox pointed out to him that such a meeting would be outside the limitation period and said that he was available to meet before then. Mr Cox then telephoned Mr Eastman and his note following this recorded:
“SJC [Mr Cox] to make sure that WJV [Mr Voaden] is told that meeting is to receive data for reporting to SCC not for further negotiations. WJV not to be reminded of expiration of 6 years – SJC however pointed this out to WJV in earlier telecon.”
Mr Cox said that he had mentioned the limitation period again to Mr Voaden at their meeting on 7 January 1999, when he explained that the meeting would be “without prejudice”. This meant, he said, without prejudice to the fact that the limitation period had expired.[18]I find the following facts:(1) All three agents, and their clients, were at all material times aware that there was a limitation period which expired on 25 December 1998.(2) At no time did the council or its agents intend to waive the limitation defence. On the contrary, in order to avoid any suggestion that by discussing the case after 25 5 December 1998 they might appear to be doing so, Mr Eastman and Mr Cox took pains to ensure that such discussions were confined to a clarification of the claim rather than a negotiation on the amount that the council might pay.(3) At no time did the council or its agents indicate by statement or conduct that it waived the limitation defence. On the contrary, I am satisfied that Mr Cox specifically pointed out the imminent expiry of the period to Mr Voaden in their telephone conversation on 17 December 1998 as recorded in Mr Cox’s note, and did so in order to indicate that the council would be able to rely on this defence and might do so. Neither Mr Cox nor Mr Eastman subsequently mentioned the limitation period to Mr Voaden (and specifically I find that it was not in terms mentioned at the meeting of 7 January 1999, although Mr Cox had it in mind when referring at the meeting to its without prejudice nature). Nothing was said in meetings or in correspondence to give any indication that the council would not rely on the limitation defence.(4) Mr Voaden and the claimant made a deliberate decision not to make a reference before 25 December 1998. The reasons for this were, firstly, the claimant’s instructions that a negotiated settlement should be reached and that a reference should not be made; and, secondly, Mr Voaden’s belief that, provided there had been a detailed claim and negotiations were continuing, the council could not take the limitation point. Because of this belief, Mr Voaden was not concerned on 17 December 1998 that he was unable to attend a meeting until January 1999. He disclosed his client’s instructions at the meeting with Mr Cox on 7 January 1999.[19]Mr King, as I have said, puts the claimant’s case both on the basis of election and on the basis of promissory estoppel. He refers to Kammins Ballroom Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, CWS v Chester-le-Street DC (1997) 73 P & CR 111 and Spencer Bower and Turner, Estoppel by Representation, 3rd Edition (1997) at 313 –314, for the ingredients of these two forms of waiver. He refers also to Scarf v Jardine (1882) 7 AC 345 on the need for an election to be communicated. He accepts, on the basis of this Tribunal’s decision in Bhattercharjee v Blackburn with Darwen Borough Council (30 March 2000, unreported) that the mere fact of continuing negotiation between a claimant and the acquiring authority after the expiry of the limitation period is insufficient to establish waiver, for the reason that it could be consistent with the exercise by the authority of its power to make an ex gratia payment. This is implicit also in Hillingdon London Borough Council v ARC Ltd (No 2) [2000] RVR 283 at 291, where Arden J, giving the judgment of the Court of Appeal, said: “It is clearly established that a party may waive the right to rely on 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 on 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 on 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.” 6[20]For the council Mr Joseph Harper QC refers to Motor Oils Hellas (Corinth) Refineries SA v Shipping Corporation of India (The “Kanchenjunga”) [1990] 1 Lloyd’s Rep 391 on the distinction between election and equitable estoppel. He refers also to Hillingdon (No 2) in particular to para 66 (at 291-2), where the Court of Appeal had held, on facts that, he says, were more favourable to the claimant than in the present case, that promissory estoppel had not been made out.[21]The definition of election for present purposes is to be found in Spencer Bower at para 310:
“The doctrine of election as applicable in the law of estoppel may conveniently be summarized as follows: Where A, dealing with B, is confronted with two alternative and mutually exclusive courses of action in relation to such dealing, between which he may make his election, and A so conducts himself as reasonably to induce B to believe that he is intending definitely to adopt the one course, and definitely to reject or relinquish the other, and B in such belief alters his position to his detriment, A is precluded, as against B, from afterwards resorting to the course which he has thus deliberately declared his intention of rejecting.”
[22]The essence of election is that a person is confronted by two mutually exclusive courses of action. In the case of a limitation defence to a compensation claim it does not seem to me that an election would arise until the time when the acquiring authority had to decide whether to response to the claimant’s reference to the Tribunal (or, as it decided to do here, to take the limitation point and to contend that the Tribunal had no jurisdiction); or, if it chose to make a reference itself, when it made the reference. To negotiate outside the limitation period involves no election because it is not inconsistent with maintaining a limitation defence. There is, however, no need for me to decide this point of principle because the evidence does not establish what would be in any event a fundamental qualification – that the council’s agents so conducted themselves as to lead the claimants to believe that the council was definitely relinquishing the limitation defence. On the facts that I have found, so far from inducing the claimant to believe that the council was relinquishing the limitation defence, Mr Eastman and Mr Cox did nothing that might suggest this. On 17 December 1998 Mr Cox expressly drew Mr Voaden’s attention to the imminent expiry of the period, and nothing that was said or done before or after that date suggested that the council would not take the limitation point.[23]Promissory estoppel is defined as follows in Halsbury’s Laws of England 4th Edition, Vol 16, para 1071:
“When one party has, by his words or conduct, made to the other a clear and unequivocal promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced.”
[24]It is clear that the facts here do not establish promissory estoppel. There was simply no promise or assurance that the council would not take the limitation point. Questions as to whether 7 any such promise was clear and unequivocal or was intended to affect legal relations or to be acted on or whether it was acted on thus do not arise. The contention fails at the threshold.[25]This preliminary issue is therefore decided in favour of the acquiring authority. The claim is statute-barred under section 9 of the Limitation Act. This decision disposes of the proceedings, and the claim is dismissed.[26]Counsel both submit that costs should follow the event. I agree. The claimants will pay the acquiring authority’s costs of the reference, such costs if not agreed to be the subject of a detailed assessment on the standard basis by the Registrar. Dated 8 January 2001 George Bartlett QC, President 8