DAVID EDWARD ACTON; CHRISTINE ACTON v TRUSTEES OF BIRMINGHAM SOUTH WEST CIRCUIT METHODIST CHURCH MANSES TRUST ACQ/114/2004

UPPER TRIBUNAL

LANDS CHAMBER

ACQ/114/2004

Case No ACQ/114/2004

Between

DAVID EDWARD ACTON; CHRISTINE ACTONApplicant

TRUSTEES OF BIRMINGHAM SOUTH WEST CIRCUIT METHODIST CHURCH MANSES TRUSTRespondent

Before

The President

David Taylor (instructed by David Acton & Co, solicitors of Solihull) for Claimant

Anthony Radevsky (instructed by Tyndallwoods, solicitors of Birmingham) for Respondent

Venue Procession House, 110 New Bridge Street, London EC4V 6JL

Hearing 18 May 2006

Property: House and premises, 954 Bristol Road, Selly Oak, Birmingham B29 6NB

Catchwords: COMPENSATION – compulsory purchase – preliminary issue – jurisdiction of Lands Tribunal to entertain reference – notice to treat – whether notice to treat withdrawn – whether notice of claim delivered – Land Compensation Act 1961 ss 4, 31

[1]This reference relates to premises at 954 Bristol Road, Selly Oak, Birmingham, which are in the freehold ownership of the claimants and are occupied as a minister’s house by the respondents under a long lease. On 30 November 2001 the respondents exercised their entitlement under the Places of Worship (Enfranchisement) Act 1920 to acquire the freehold of the house by serving notice to treat on the claimants under Part I of the Compulsory Purchase Act 1965. On 13 December 2001 the applicants acknowledged the notice to treat and claimed the value of their interest in the premises to be £50,000.

[2]At the time the respondents served the notice to treat they had no power to acquire the freehold under the Leasehold Reform Act 1967 because section 1(1) of that Act limited the entitlement to a tenant occupying the house as his residence. The Commonhold and Leasehold Reform Act 2002 abolished the residential requirement with effect from 26 July 2002. In due course the respondents received valuation advice that, if they were to acquire the freehold under the 1967 Act, they would be likely to have to pay a price that was lower than the compensation that would be payable under the 1920 Act. They therefore decided not to proceed with the 1920 Act acquisition, and on 10 September 2004 they served a notice of tenant’s claim on the claimants under the 1967 Act. Under section 5(6) of the 1967 Act a notice of tenant’s claim is of no effect where notice to treat has been served, and in their notice in reply to tenant’s claim dated 3 November 2004 the claimants disputed the respondent’s entitlement to acquire the freehold on this ground (although they did not refer specifically to section 5(6)).

[3]On 15 November 2004 the claimants gave notice of reference to this Tribunal of their claim for compensation under the 1920 Act. On 19 January 2005 the respondents’ solicitors wrote to the claimants’ solicitors saying that their notice of tenant’s claim under the 1967 Act operated as an implied withdrawal of their notice to treat; alternatively, they said, “...we hereby withdraw the Notice to Treat”. They asserted that the claimants had failed to deliver a notice of claim under section 4(1)(b) of the 1961 Act. The claimants’ solicitors replied on 21 January 2005 disputing the respondents’ entitlement to withdraw the notice to treat and the contention that no valid notice of claim had been served. They referred to the acknowledgement dated 13 December 2001 of the notice to treat and to a letter of 6 June 2002 from the claimants’ surveyors, Pennycuick Collins, to the respondents’ surveyor, Thomas Price, enclosing details of their calculation of the compensation, and they enclosed a further copy of that letter and the calculations.

[4]On 18 October 2005 the respondents applied to the leasehold valuation tribunal for determination of the compensation pursuant to the notice of tenant’s claim; but by letter to the claimants’ solicitors dated 15 December 2005 they accepted that, in the light of the provisions of section 5(6) of the 1967 Act, the notice of tenant’s claim was of no effect since at the time of service the notice to treat was in force, and they withdrew their application to the LVT. 3

[5]The respondents contend that the notice to treat that they served has been withdrawn, and on 5 December 2005, on their application, the Tribunal ordered that the following should be determined as a preliminary issue:

“Whether the respondents’ notice to treat dated 30 November 2001 has been withdrawn and therefore whether this Tribunal has jurisdiction to hear and determine this reference.”

[6]Statutory provision about the withdrawal of notices to treat is contained in section 31 of the Land Compensation Act 1961, which provides:

“(1) Where a claimant has delivered such a notice as is mentioned in paragraph (b) of subsection (1) of section four of this Act, the acquiring authority may at any time within six weeks after the delivery thereof, withdraw any notice to treat which has been served on him or on any other person interested in the land authorised to be acquired. (2) Where a claimant has failed to deliver a notice as required by the said paragraph (b), the acquiring authority may, at any time after the decision of the Lands Tribunal on his claim but not later than six weeks after the claim has been finally determined, withdraw any notice to treat which has been served on him or on any other person interest in the land authorised to be acquired, unless the authority have entered into possession of the land by virtue of the notice.”

[7]Section 4 of the 1961 Act concerns costs, and, as far as material, it provides:

“(1) Where either – (a) ... (b) the Lands Tribunal is satisfied that a claimant has failed to deliver to the acquiring authority, in time to enable them to make a proper offer, a notice in writing of the amount claimed by him, containing the particulars mentioned in subsection (2) of this section; 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 or, as the case may be, after the time when in the opinion of the Lands Tribunal the notice should have been delivered. (2) The notice mentioned in subsection (1) of this section must state the exact nature of the interest in respect of which compensation is claimed, and give details of the compensation claimed, distinguishing the amounts under separate heads and showing how the amount claimed under each head is calculated.”

[8]For the respondents Mr Anthony Radevsky submitted that the claimants had failed to deliver a notice of claim that satisfied the requirements of section 4(2) and that the result of that was that the respondents, as the acquiring authority for the purposes of these provisions, 4 could at any time withdraw their notice to treat. The withdrawal of their notice to treat in the letter of 19 January 2005 was thus effective. The claimants’ case, as originally advanced was that they served a notice within the meaning of section 4(1)(b) when on 13 December 2001 they retuned to the respondents the form that acknowledged service of the notice to treat and claimed that the value of their interest was £50,000; or alternatively when, in the course of negotiations, their valuer wrote on 6 June 2002 to the respondent’s valuer setting out his calculation of the price payable. For the claimants Mr David Taylor, however, accepted that they were unable to show that the calculation had in fact been enclosed with the letter of 6 June 2002 or that it had been sent to the respondents before they were enclosed in their solicitors’ letter to the respondents’ solicitors of 21 January 2005. He submitted that the notice of claim consisted either of the statement of the amount claimed in the acknowledgement of 13 December 2001 or of that and the calculation of the amount that was sent to the respondents’ solicitors in the letter of 21 January 2005. He said that, whichever of these was the date of the notice of claim, the respondents’ purported withdrawal of their notice to treat was ineffective because it was not in either case made within the 6 week period. If Mr Radevsky was right and no notice of claim had been served for the purposes of section 4(1)(b) the purported withdrawal of the notice to treat was equally ineffectual since under section 31 such withdrawal could only be made within the period of 6 weeks after the services of a valid notice of claim (subsection (1)) or, if no such notice had been served, within the period of 6 weeks after the Lands Tribunal’s decision on the claim for compensation (subsection (2)).

[9]Mr Radevsky submitted that it was open to an acquiring authority to withdraw the notice to treat at any time before a notice of claim had been served or within 6 weeks after its service. He sought to rely on Trustees for Methodist Church Purposes v North Tyneside Metropolitan Borough Council

(1979) 38 P & CR 665

where at 671 Browne-Wilkinson J said:

“To my mind the obvious intention of section 31 is to ensure that until the local authority knows, either from a detailed claim under section 4 or from a decision of the Lands Tribunal, how much it is going to have to pay it is free to withdraw from the acquisition. To give the local authority this opportunity it is necessary that they should have a quantified claim on the basis of which they should have an open offer.”

It would, said Mr Radevsky be idle and a waste of time and costs, where no notice of claim had been delivered, to require both parties to go through a full valuation hearing in order to trigger the right to withdraw.

[10]Mr Radevsky’s case was thus founded on two propositions – firstly, that the effect of section 31(1) is to enable an acquiring authority to withdraw the notice to treat at any time up to, and within 6 weeks after, the service of a claim that is effective for the purposes of section 4(1)(b); and, secondly, that no such notice of claim had been served, so that the respondents’ purported withdrawal of their notice to treat was effective and the claimants were not entitled to give notice of reference to the Lands Tribunal. I cannot accept either of these propositions. I take the first one first.

[11]Notice to treat crystallises the acquiring authority’s power compulsorily to acquire the claimant’s land and gives rise to rights on the part of the claimant and acquiring authority that are analogous to those of vendor and purchaser. Either party has the right to have the compensation settled in the manner provided by the Act, and, when this has been done there is 5 an enforceable contract or quasi-contract of which specific performance will be ordered: see Tiverton and North Devon Ry v Loosemore

(1884) 9 App Cas 480

per Lord Blackburn at 493.

[12]Notice to treat can be withdrawn, thus depriving the claimant of his right to have the compensation assessed and to receive it as purchase money, but only in the limited way provided for by section 31: see Williams v Blaenau Gwent Borough Council [1994] 2 EGLR

[201]The provisions of section 31(1) and (2) are explicit. The acquiring authority are only able to withdraw the notice to treat within either of two periods – 6 weeks after the delivery of a notice of claim under section 4(1)(b) or, if no such notice has been served, 6 weeks after the final determination of the claim by the Lands Tribunal. The purpose of the power to withdraw is clear. When the acquiring authority serve notice to treat it is unlikely that they will be able to make a firm assessment of the compensation that they will have to pay in respect of their acquisition of the claimant’s land. While they ought to be able to assess the market value of the land (under rule (2) of section 5 of the 1961 Act), it is unlikely that they will have the knowledge needed to be able to assess additional elements of the compensation that are personal to the claimant – severance and injurious affection of his other land (under section 7 of the Compulsory Purchase Act 1965) or other consequential losses (under rule (6)) – or to know whether the claim might be made on the basis of equivalent reinstatement (rule (5)) or what the cost of this might be. The acquiring authority have to be able to withdraw the notice to treat when they know what the limit of their liability is. Equally, however, the claimant needs to know where he stands, and the acquiring authority’s right to withdraw is therefore limited in point of time. If they do not withdraw the notice to treat within 6 weeks of the notice of claim, or within 6 weeks of the Lands Tribunal’s decision where no such notice have been served, they can only be released from their liability to buy the land if the claimant agrees or acquiesces.

[13]There is nothing, in my judgment, to assist Mr Radevsky’s contentions in Trustees for Methodist Church Purposes. To advance as supporting the respondents’ case the words that I have quoted from Browne-Wilkinson J’s judgment is to take them very much out of context. In that case the defendant acquiring authority had powers under a compulsory purchase order to acquire a chapel owned by the plaintiffs. Following the service on them of notice to treat, the plaintiffs sent a notice of claim, in which they claimed compensation on the basis of equivalent reinstatement without quantifying the amount. Some 15 months later the acquiring authority informed the plaintiffs that they intended to withdraw the notice to treat at the first available opportunity. The plaintiffs sought a declaration that the notice to treat could not be withdrawn. The basic contentions of the parties were summarised by the judge as follows (at 668): “The defendant authority claim that the plaintiffs have not served any proper notice containing the particulars specified in section 4(2). They say that if the plaintiffs now serve such a notice they will withdraw the notice to treat under section 31(1) or, if no further notice is served, they will withdraw the notice to treat under section 31(2) after the Lands Tribunal has determined the claim. The plaintiffs maintain that the notice they served on April 14, 1976, did constitute a proper notice for the purposes of section 4 of the 1961 Act and that accordingly the local authority cannot at any stage hereafter withdraw the notice to treat under section 31.” 6

[14]There was thus no contention on the part of the acquiring authority that they could withdraw the notice to treat at any time before a valid notice of claim was delivered. Indeed they were clearly accepting that they could not withdraw the notice to treat until a valid claim was made. Their case was that no such claim had been made, and they said that they would withdraw the notice to treat under section 31(1) if a claim were to be made or under section 31(2), following the Lands Tribunal’s decision, if it were not. It was in this context that the judge was expressing himself in the passage at 671 that I have quoted. What he said carries no implication that he thought that the notice to treat could be withdrawn other than in accordance with the explicit provisions of section 31(1) and (2).

[15]As for Mr Radevsky’s contention that it would be idle and a waste of time and costs, where no notice of claim had been delivered, to require both parties to go through a full valuation hearing in order to trigger the right to withdraw, this does not amount to a sufficient reason for giving to section 31(1) a meaning that it patently does not have. In any event, it seems to me, the potential for wasted time and cost to which he draws attention is taken care of by section 4(1). A claimant who fails to deliver a notice of claim is liable in costs, in the absence of special reasons.

[16]Mr Radevsky contended that the respondents had withdrawn the notice to treat by their solicitors’ letter of 19 January 2005. If he is right that no notice of claim has been served, this would not have been an effective notice of withdrawal for the reason that the right to withdraw under section 31(1) would not at that stage have arisen. If he is wrong, and a notice of claim has been delivered, whether on 13 December 2001 or on 21 January 2005 (the only two dates now suggested for this), the withdrawal would not have been effective for the purpose of that provision, being more than 6 weeks after 13 December 2001 and before 21 January 2005.

[17]Mr Taylor submitted that, if I reached the conclusion that no withdrawal of the notice to treat had been made under section 31(1), that would be conclusive of the preliminary issue. The Tribunal would have jurisdiction to determine the reference. He suggested that I should stop there and should not go on to consider whether Mr Radevsky’s second proposition, that no notice of claim within section 4(1)(b) had been given, was made out. It would leave open the question whether, once the Tribunal has determined the compensation payable, the respondents will be able to withdraw the notice to treat under section 31(2). The effect of any purported withdrawal after the Tribunal’s decision would not be a matter for the Tribunal but for the courts. It seems to me, however, that since the issue was fully argued it would be helpful if I expressed my conclusion upon it at this stage, not least because it is likely that it will arise again in relation to costs once the Tribunal has determined the substantive claim. I can do so quite shortly.

[18]The purpose of the notice of claim envisaged by section 4(1)(b) is to enable the acquiring authority to make an offer to the claimant. This, it seems to me, is clear from section 4(1)(b) itself. A notice of claim only qualifies for the purpose of that provision if it is delivered in time for such an offer to be made. In the context of the Act as a whole it is also the purpose of the notice of claim to enable the acquiring authority to decide whether it should withdraw the notice to treat. That is clear from section 31(1). The notice must be in writing but, apart from this, no form of notice is specified. Provided what is written states the claim as a claim and complies with the requirements of section 4(2) in terms of what it contains, in sufficient detail 7 to enable the acquiring authority to decide what offer it should make or whether it should withdraw the notice to treat, it will, in my judgment, constitute a notice within section 4(1)(b). Under section 4(2) the notice must show how the amount under each head is calculated.

[19]The acknowledgement of 13 December 2001 of the notice to treat was not, in my view, a notice of claim within section 4(1)(b). This is because, although it stated the amount of the claim, it did not show how it was calculated. Thus if, contrary to my earlier conclusion, Mr Radevsky were right in saying that a notice to treat can be withdrawn at any time before a valid notice of claim is made, the purported withdrawal of 19 January 2005 would have been effective. The claimants’ solicitors’ letter of 21 January 2005 did, however, constitute a claim within section 4(1)(b), in my view. It was written in response to the respondents’ contention in their solicitors’ letter of 19 January 2005 that the claimants had failed to deliver a notice as required by section 4(1)(b). It sought to refute this contention by referring to specific items of correspondence. These included the acknowledgement of 13 December 2001 and the Pennycuick Collins’s calculation of the make-up of the £50,000 claimed in the acknowledgement. There could not at that stage have been any doubt in the respondents’ mind that the claim was for £50,000 and that it was calculated in the way that was shown.

[20]For the reasons that I have given I determine the preliminary issue in the claimants’ favour: the respondents’ notice to treat dated 30 November 2001 has not been withdrawn, and the Tribunal has jurisdiction to hear and determine the reference. A letter on costs accompanies this decision, which will become final when the question of costs has been determined. 29 June 2006 George Bartlett QC, President 8 Addendum on costs

[21]I have received written submissions on costs. The claimants ask for their costs. The respondents submit that each party should bear its own costs.

[22]The general rule is that a successful claimant ought to receive its costs, and the claimants have been wholly successful on the preliminary issue. The respondents say that, on the basis of the Tribunal’s decision, the claimants created a valid notice of claim fortuitously, that it was not labelled as a notice of claim, and in view of this lack of clarity, for which the claimants were responsible, that it was not unreasonable for the respondents to ask for its validity to be determined by the Tribunal. Moreover, they say, the respondents are a church and a charity and were not driven to the Tribunal by commercial gain but by trustee duty. None of these considerations are, in my judgment, sufficient to deprive the claimants, who have behaved reasonably throughout, of all or part of their costs.

[23]The respondents must pay the claimants their costs of the preliminary issue, such costs if not agreed to be the subject of detailed assessment by the Registrar on the standard basis. 7 August 2006 George Bartlett QC, President 9