Saunders v Caerphilly County Borough Council [2015]

In Saunders v Caerphilly County Borough Council [2015] EWHC 1632 (Ch) (11 June 2015) in 1991 the Claimant, as owner of a freehold farm in Caerphilly, was served a notice to treat under a compulsory purchase order (CPO) in respect of a strip of land being part of the farmland which the then relevant authority required in order to construct the A469 Lower Rhymney Valley Relief road. The road was built shortly thereafter but the drainage system to the farmhouse and farm buildings was affected and the drainage from the buildings is still ineffective to this day.

Under the Compulsory Purchase Act 1965 the date of entry is when the assessment of compensation starts and in this matter more than 23 years later, the final assessment for compensation had still not been fixed. The parties did reach an agreement in 1996 on how the compensation was to be calculated but the agreement had still not been finalised.

The Claimant was now seeking an order that the Defendant should refer the matter to the Lands Chamber of the Upper Tribunal for assessment and an injunction to stop the Defendant using the strip of land as a road. The Defendant argued that the claims were barred by the Limitation Act 1980 and on the 18th December 2014 His Honour Judge Milwyn Jarman ordered that three of the issues be decided as preliminary issues as follows:

  • Whether section 9(1) of the 1980 Act is applicable to the claims made by the Mr Saunders in this action;
  • If section 9(1) is applicable, whether the authority is prevented from raising a defence based on limitation.
  • Whether the claimant’s claim for an injunction preventing use of the road should be struck out under the Civil Procedure Rules 1998 3.4(2)(a) as it discloses no reasonable ground for bringing or defending the claim.

His Honour Judge Milwyn Jarman looked at the first issue and quoted the relevant sections of the Limitation Act 1980 which were applicable:

  • “9(1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the d
    ate on which the cause of action accrued.
  • 29(5) Subject to section (6) below, where any right of action has accrued to recover – (a) any debt or other liquidated pecuniary claim….and the person liable or accountable for the claim acknowledges the claim or makes any payment in respect of it the right shall be treated as having accrued on and not before the date of the acknowledgment or payment.
  • 36(1) The following time limits under this Act, that is to say….(e) the time limit under section 9 for actions to recover a sum recoverable by virtue of any enactment….shall not apply to any claim for specific performance or a contract or for an injunction or for other equitable relief….”

Prior to 1997 the assumption was that there was no limitation period applicable to compensation claims in respect of land that had been appropriated until that compensation had been decided but in June of that year a deputy Judge in the High Court granted a declaration that a claim where the amount of compensation had not been determined was barred by s.9.

In Hillingdon LBC v ARC Ltd (N0 1)1999 the Court of Appeal upheld the decision made in the High Court. “Both parties were represented by counsel highly experienced in the field, and it was not disputed by them that the compensation for compulsory purchase resulting from entry onto land pursuant to section 11 of the Compulsory Purchase Act 1965 was “a sum recoverable by virtue of any enactment” under section 9”.

A further hearing was held in the High Court which held that the Authority acquiring the land “was estopped by convention from relying upon the expiry of the time limit, having regard to ongoing negotiations between the parties. That decision was also appealed and upheld by a differently constituted Court of Appeal (Swinton Thomas and Waller LJJ and Arden J in Hillingdon LBC v ARC Ltd (No 2) [2000] 3 EGLR 97)”.

HHJ Milwyn Jarman said

  • “I find it difficult to see how the indication in the notice to treat can reasonably be taken to communicate that the authority would not take a limitation defence when the notice was served long before the expiry of the six year period even if taken from date of entry. Nor can I see that the advance payment amounted to such a communication when there was express agreement to pay it back if no compensation was payable. However, the invitation by the authority to withdraw the reference on the basis that a settlement had been concluded, must in my judgment be taken at least to communicate that the six year time limit would in effect start from that settlement in order to enforce it, and in my judgment Mr Pugh-Smith’s concession is a proper one”

He continued that in his judgment the letter from the legal services in 2008 that if matters could not be agreed then they should be referred to the Tribunal meant that there was no limitation point. Further, the authority had suggested that the parties continue negotiating inferring that to start proceedings would serve no use.

HHJ Jarman continued that both counsel had agreed that he should look at all the surrounding circumstances to consider “whether it would be unconscionable in all the circumstances for it now to take the defence”. He considered that it would be. Counsel for the Defendant had indicated to him that the Defendant would offer to give an undertaking to make a reference as soon as they could with also looking at ADR. Counsel for the Claimant indicated the Claimant would accept the undertaking and HHJ Jarman considered this to be the sensible way to proceed.

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