ACQ/109/2004

	LANDS TRIBUNAL ACT 1949

Compensation – Limitation – Continuing negotiations after expiry of Limitation period – Promissory estoppel – Estoppel against Acquiring Authorities

IN THE MATTER OF A NOTICE OF REFERENCE

BETWEEN	RWE NPOWER PLC	Claimant
		
	and
		
	KENT COUNTY COUNCIL	Acquiring 
		Authority

	Re:	Land situated at and part of the former 
	Northfleet Power Station
	Crete Hall Road
	Northfleet
	Kent

	Before: His Honour Judge Michael Rich QC

	Sitting at Procession House, 110 New Bridge Street, London EC4V 6JL
	on 22 September 2005

Joseph Harper QC on behalf of the Claimant
Meyric Lewis of counsel on behalf of the Acquiring Authority

The following cases are referred to in this decision:

Co-operative Wholesale Society Ltd v. Chester-le-Street District Council [1998] 3 EGLR 11
Hillingdon London Borough Council v. ARC Ltd  [1999] Ch 139
Hillingdon London Borough Council v. ARC Ltd (No 2)[2000] 3EGLR97
Rotherwick Executors v Oxfordshire County Council [2000] 2 EGLR 85
Regina (Reprotech (Pebsham) Ltd) v. East Sussex County Council [2003] 1 WLR 348
SITA (formerly Ebenezer Mears( Sand Producers) Ltd) v. Surrey County Council [2001] 41 RVR 56
Western Fish Products v. Penwith District Council [1981] 2 All ER 204

	DECISION ON PRELIMINARY ISSUE
1.	By order dated 27 January 2005, the President ordered that a preliminary issue should be determined in this Reference made on 8 November 2004, as to whether the claim for compensation made on the acquisition of a number of plots of land at the former Northfleet Power Station, Crete Hall Road, Northfleet, Kent is statute-barred.  
2.	It is agreed that the acquisition was made under the Kent County Council Northfleet Southern By-pass Compulsory Purchase Order 1985 and that, following notice to treat served on 28 January 1987, entry was made on all plots on 29 April 1987.  It is common ground that the limitation period for bringing a claim under s.9 of the Limitation Act 1980 expired on 29 April 1993.  The issue between the parties is whether the Authority is disentitled from relying upon such defence to the claim.  Although the burden for showing such disentitlement rests on the Claimant, the parties agreed that the Acquiring Authority should open the preliminary issue and have the final word.
3.	At the time when the limitation period expired, it was thought on both sides that the Limitation Act did not apply, and the Authority’s surveyor wrote to the Claimant on 18 August 1994, complaining of delay in reaching agreement and saying:
“As I am sure you are aware, the only way in which I can bring matters to a head is by referring the case to the Lands Tribunal.  This I am reluctant to do unless or until a definite valuation dispute has emerged, but matters cannot be allowed to drift much longer.”
No doubt in response to that complaint the Claimant appointed Mr Keith Murray FRICS to act on its behalf, and he, on 13 June 1995 finally produced a formal claim in response to the Authority’s notice to treat.
4.	On 12 June 1997, Mr Stanley Burton QC, sitting as a deputy judge of the High Court decided in Hillingdon London Borough Council v. ARC Ltd that the Limitation Act did apply to claims for compensation on compulsory acquisition.  His decision was upheld by the Court of Appeal on 7 April 1998 ([1999] Ch 139).  From, at any rate, that date or shortly thereafter, both sides were aware that the claim was statute-barred, but as I was told by Mr John Farmer MICE, who was the officer of the Authority responsible for the scheme for which the land had been acquired, it was decided
“that it was inappropriate to claim a time bar because no referral to the Lands Tribunal had been made where negotiations could still be regarded as in progress albeit maybe slowly”.  
Accordingly negotiations were continued, albeit in what has been described as a desultory way, with Mr Ian Burgess being appointed to act on behalf of the Authority from April 1998.

5.	Mr Harper QC, who appears on behalf of the Claimant, accepts that a party is not
“disentitled from relying upon 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”
(see Arden J. giving the judgement of the Court of Appeal in Hillingdon London Borough Council v. ARC Ltd (No 2) [2000] 3EGLR97 at p.104F, where the Court was, in fact accepting Mr Harper’s own submission in that case).  
6.	In that case, the Court of Appeal accepted that a person may become disentitled from relying on a limitation defence where an estoppel by convention was established (see p.101 to 103), or by waiver or agreement (see p.104 E-F) or by promissory estoppel (see p.105 C).  There has been no dispute in this case that it would be necessary for the Authority to be disentitled that the Tribunal should be satisfied that it was unconscionable for the Authority to rely upon such defence, but subject to one point, namely the delay between the discontinuance of negotiations in February 2001 and the making of the reference in November 2004, Mr Lewis, who appeared on behalf of the Authority, accepts that if any of these grounds is satisfied, and it can be said that the Claimant therefore expended money, it would be unconscionable for the Authority to seek to rely on a limitation defence without giving notice of its intention to do so.
7.	Mr Harper submits that an estoppel by convention arose.  He does not rely on the shared mistake as to the inapplicability of the Limitation Act, because even if it operated until the mistake was appreciated, it clearly could not disentitle the Authority from relying upon the defence after the Claimant had had, but had not taken a reasonable opportunity to make a reference.  Mr Harper relies instead upon the policy of the Authority as recorded in the excerpt from the evidence of Mr Farmer which I have set out in paragraph 4 of this Decision.  But even if that could be construed as meaning that the Authority had made a decision as to the appropriate course of conduct for all claims extant at the time of the Hillingdon Decision, the Claimant cannot rely upon it unless the policy was communicated to it.  Communication may, as the Court of Appeal accepts in Hillingdon (No 2) at p.102 be by conduct or even by silence, but it is apparent that so far from such policy being communicated to the Claimant, the Claimant was ignorant of it.  This is shown by a letter which Mr Murray wrote to the Claimant on 14 May 1999, when he reported the promise of Mr Burgess to respond to the Claimant’s claim shortly after the end of that month and said:
“.. if his genuine intention is to continue the momentum to a conclusion, then we do not have the concerns of not having referred the matter to the Lands Tribunal for determination within six years of the entry date.  As you know my concern has always been that we are well beyond the six year time that was the subject of the ruling in the ARC case..”
Mr Murray has not suggested, in his evidence, that the Claimant knew of or placed any reliance upon any policy the Authority might have had, not to rely upon any limitation period.
8.	Nor, although Mr Harper invoked the concept, is it, in my judgement, possible for the Claimant to rely upon any waiver by the Authority of its right to rely upon such defence.  A waiver arises only when a person elects to act in a way inconsistent with the course which he waives.  As is accepted, mere negotiation is not inconsistent with maintaining a limitation defence.  For the reasons set out by Mr George Bartlett QC President in SITA (formerly Ebenezer Mears( Sand Producers) Ltd) v Surrey County Council [2001] 41 RVR 56, at para 22 an election would arise only when a reference was made, at which point, of course, the Authority elected to rely on the limitation defence.
9.	The preliminary issue in this case accordingly depends, in my judgement, upon what if anything was agreed when the negotiations were continued in the knowledge that a limitation defence could be available to the Authority.  It is not suggested that the Authority entered into any enforceable agreement not to rely upon the limitation defence.  In the circumstances, therefore, it could now be disentitled from relying upon such defence only if the Claimant is entitled to rely upon a promissory estoppel that it will not do so.
10.	In the SITA case the President set out the definition of a promissory estoppel from Halsbury’s Laws of England 4th Edition vol 16 para 1071 as follows:
“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 had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced.”
11.	Both Mr Murray and Mr Burgess gave evidence before the Tribunal.  Neither has any contemporaneous note of any conversation about or agreement or understanding as to the effect of the expiry of the limitation period.  Both however agree that they did discuss the effect of the Hillingdon Decision.  Both are agreed that it was their intention, in spite of the Decision, to reach a negotiated settlement, and to that end they continued to negotiate, albeit as has been said in the most desultory way.  
12.	Mr Burgess’s account of his discussions with Mr Murray comes closer to justifying the conclusion that an agreement was reached such as to disentitle the Authority from relying upon the limitation defence, at least without first giving the Claimant notice of its intention to do so, than does Mr Murray’s.  In his witness statement he said:
“I recall remarking that Kent County Council was not, at that time, seeking to argue that [if] a reference be [were] made to determine the matter [it would be treated] as time barred.  This was clearly the Council’s position at that time, on the basis that we were both working towards a settlement and hoped to be able to negotiate a reasonable settlement in a reasonable time span.  However, Kent County Council’s position on the time bar issue was never put in writing, neither was I asked to put it in writing.  Had I done so [that is put the position in writing] I would certainly have stated that the County Council would not rule out the time bar issue forever in this case ..”
The insertions in square brackets indicate my understanding of what the witness statement was intended to convey.  Mr Farmer confirmed Mr Burgess’s authority to make commitments on behalf of the Authority.  In the course of cross examination and in answer to questions from the Tribunal Mr Burgess became firmer that the intention was to waive the time bar only because, at that time,  they were “heading towards settlement”, which was in fact never reached.  Although the way he put the case took various forms, I accept that he was doing his best to give honest evidence to help the Tribunal.  At no point did he claim that he had ever stipulated that any willingness to waive the limitation defence was itself time limited or conditional upon progress in or diligent pursuit of settlement.  He accepted that he had agreed to continue negotiation and that he did not regard the limitation point as a reason not to pursue negotiations.
13.	Mr Murray’s account in his witness statement is consistent with Mr Burgess’s.  He said:
“Certainly by May 1999 the impact of the decision in Hillingdon London Borough Council –v- ARC Limited on the referral of claims for compensation had become well known.  I can recall Mr Burgess making reference to the case and discussing it with me.  I can also recall that we both agreed that our intention was to reach a negotiated settlement without reference to the Lands Tribunal.”
He had made no note of the terms of any agreement which he reached with Mr Burgess.  He had file notes of telephone conversations which he did not produce to the Tribunal because they made no reference to the limitation point.  But silence on the issue speaks as loudly as any words.  On 14 May 1999 he wrote the letter reporting  to the Claimant that Mr Burgess had promised to respond to the Claimant’s claim by the end of that month and was optimistic that “we should conclude an agreement very shortly thereafter”.  He accepted, in answer to the Tribunal that this letter was written after the conversations in which Mr Burgess set out the Authority’s position, in so far as he ever did so.  Mr Murray reported his understanding of the position in the words which I have already set out at paragraph 7 of this Decision.  For him to write in the terms which I have quoted is quite inconsistent with his believing that he had been given a promise or assurance which was intended to affect legal relations that the Authority would not rely on the limitation point either conditionally or unconditionally.  As he accepted in answer to the Tribunal, he had an understanding with Mr Burgess that negotiations would continue notwithstanding their appreciation of the effect of the Hillingdon Decision and he took the view that the less said about the terms of such understanding the better.  Thus whatever Mr Burgess might have been willing to agree at the time, if he had been pressed, and whatever might have been Mr Burgess’s understanding of the Authority’s intentions, no clear and unequivocal promise or assurance was communicated to Mr Murray as to what should happen if negotiations broke down.
14.	On this evidence, it is, in my judgement impossible to find that any promissory estoppel arose to disentitle the Authority from relying on the limitation point.  No doubt, if a settlement had been negotiated in response to Mr Burgess’s letter dated 10 June 1999, in which, whilst maintaining that no compensation was due because of the betterment to the Claimant’s retained land, he invited Mr Murray to produce a “before and after” valuation, the Authority would have maintained the policy which Mr Farmer describes, and waived the limitation defence.  I conclude however that no promise or assurance that the Authority would do so, upon which the Claimant was either entitled to rely or did in fact rely had been given to the Claimant before Mr Murray’s letter dated 14 May 1999.  And Mr Murray does not suggest that any such promise or assurance was given thereafter.
15.	In the Hillingdon (No 2) Decision at p.103 A, the Court of Appeal refers to another decision of the Court of Appeal in Co-operative Wholesale Society Ltd v. Chester-le-Street District Council [1998] 3 EGLR 11 in which the decision of Judge Marder QC, President of the Lands Tribunal, that an estoppel had arisen was upheld.  He found as a fact, as recorded at p.12 F, that there was in that case
“a common assumption that [the parties] were negotiating settlement of a valid claim for compensation without regard to the statutory limitation period and on the basis that if agreement could not be achieved the matter would in the last resort be referred to the tribunal for determination.”
Although Mr Harper used the expression “common assumption” to describe the assurance which he invited the Tribunal to find, he did not rely upon this Decision.  I agree that it is not in point.  It is, in my judgement a case “where there was agreement about the manner in which the claim was to be resolved if negotiations broke down” (see the reference to Hillingdon (N0 2) at page 104 F at paragraph 5 above).  On the evidence which I have heard as to the discussions between Mr Burgess and Mr Murray, I cannot make any such finding in this case.
16.	My above findings are sufficient to determine the preliminary issue in the Authority’s favour, but Mr Lewis has on behalf of the Authority raised two further points.  Firstly, he submits that even if an estoppel had arisen, the Claimant should be debarred from relying upon it, because of the delay till November 2004 before making this reference, following the last letter by way of negotiation from the Authority dated 26 February 2001.  Although it is right that that letter did ask the Claimant to confirm a matter already agreed between the valuers, its main effect was to promise a further letter “regarding the whole claim in the next month”.  If the lapse of time is relied upon as laches justifying the denial to the Claimant of equitable relief, it is a particularly unattractive submission in the circumstances.  I accept that sufficient delay, without taking any steps in reliance upon the assurance given by the Authority, may disqualify a claimant from relying on an estoppel.  The passage of a further six years from the date of the assurance relied upon, without making a reference, would, in my judgement, at least prima facie be sufficient.  But that period had not quite been reached, and I would not have excluded the Claimant in this case from reliance upon a promise not to take a limitation point, if I had found that such assurance, giving rise to an estoppel, had been given.
17.	Mr Lewis also submitted that no estoppel could arise, because it was not within the power of the Authority to waive the limitation defence.  This is an argument which Mr James Goudie QC raised in Rotherwick Executors v Oxfordshire County Council [2000] 2 EGLR 85 (see at page 88 G).  He, as does Mr Lewis, relied on the decision in Western Fish Products v. Penwith District Council [1981] 2 All ER 204.  Mr Lewis accepted that the argument had been rejected by Mr George Bartlett QC, the President, in that case for reasons which he gave at page 89L to 90C.  Although such Decision is not binding upon me, it is not only of considerable persuasive authority, but in any case I entirely agree with it.  Since, having regard to the findings which I have made, the issue does not arise for decision by me, I do not think it necessary to add anything.
18.	Mr Lewis relies also on the decision of the House of Lords in Regina (Reprotech (Pebsham) Ltd) v. East Sussex County Council [2003] 1 WLR 348.  In that case Lord Hoffman said at paragraph 33:
“ .. I think that it is unhelpful to introduce private law concepts into planning law.  As Lord Scarman pointed out in Newbury District Council v Secretary of State for the Environment [1981] AC 578, 616, estoppels bind individuals on the ground that it would be unconscionable for them to deny what they have represented or agreed.  But these concepts of private law should not be extended into ‘the public law of planning control, which binds everyone.’ ”
Although a claim for compensation on compulsory acquisition arises under statute, it is, at least for these purposes, a claim in private law against the Acquiring Authority, and decisions as to the conduct of the claim affect only the parties to it.  The observations of Lord Hoffman have no relevance to the claim in this case.
19.	It was agreed between the parties at the end of the hearing that if, as I have I decided this preliminary issue in favour of the Acquiring Authority, I should strike out the Claimant’s Reference, and order the Claimant to pay the Acquiring Authority’s costs to be assessed if not agreed.
Dated 26 September 2005

His Honour Judge Michael Rich QC