BIRRELL Ltd v CITY of EDINBURGH DISTRICT COUNCIL
| Jurisdiction | England & Wales |
| Judge | Lord Wilberforce,Lord Fraser of Tullybelton,Lord Russell of Killowen,Lord Lowry,Lord Bridge of Harwich |
| Judgment Date | 26 November 1981 |
| Judgment citation (vLex) | [1981] UKHL J1126-5 |
| Docket Number | No. 4. |
| Court | House of Lords |
| Date | 26 November 1981 |
[1981] UKHL J1126-5
House of Lords
Lord Wilberforce
Lord Fraser of Tullybelton
Lord Russell of Killowen
Lord Lowry
Lord Bridge of Harwich
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Fraser of Tullybelton, with which I agree. I too would dismiss the appeal.
My Lords,
This appeal is concerned with the date from which interest is due on the price or compensation for land which is acquired compulsorily before the compensation has been paid, under statutory procedure for expedited completion. The main question in the appeal is whether interest is due, under the expedited completion procedure, from the date on which the land was vested in the local planning authority, or from the (later) date on which they physically occupied the land. The local planning authority admit that they are liable to pay interest from the later date until compensation is paid. The sellers claim interest from the earlier date. If the sellers are right, a second question arises as to the appropriate rate of interest. The Lord Ordinary (Lord Maxwell) decided in favour of the sellers. On a reclaiming motion by the appellants, the Second Division adhered to the Lord Ordinary's decision in principle, subject to a variation to be mentioned below. From the decision of the Second Division the appellants now appeal to your Lordships' House.
In 1967 a compulsory purchase order was made by Edinburgh Corporation, under section 35 of the Town and Country Planning (Scotland) Act 1947 ("the 1947 Act") for the acquisition of certain land as part of a comprehensive development area on which the St. James's Centre in Edinburgh has since been built. The rights and obligations of Edinburgh Corporation as local planning authority have been transferred by statute to the appellants. The land acquired under the order included premises belonging to the respondents. The Secretary of State duly confirmed the compulsory purchase order including a direction that the statutory procedure for expedited completion was to apply. The Secretary of State had power under section 36(1) of the 1947 Act to include such a direction if he was satisfied "that it is urgently necessary in the public interest to empower [the local planning] authority to enter on the whole or any part of the land to which the order relates and secure its vesting in them before the expiration of the time which would be required for the service of notices to treat, …".
The provisions for expedited completion, originally contained in Schedule 6 to the Town and Country Planning (Scotland) Act 1945 were, at the dates relevant to this appeal, set out, as amended, in Schedule 11 to the 1947 Act (now repealed). I shall follow the example of the Lord Ordinary and the Second Division and refer to these provisions as "the Sixth Schedule". The provisions of the Sixth Schedule which are directly relevant to this appeal are in paragraph 3(1) ( 3) and (4) of the Schedule and are as follows:—
"3(1). At any time or from time to time after the coming into operation of a purchase order providing for expedited completion … the purchasing authority may execute, as respects an area consisting either of the whole or a part of the land as respects which this Schedule applies by virtue of the order, a declaration designating that area and stating—
( a) their intention to enter on the land in the designated area and take possession thereof at the expiration of such period (not being less than 28 days) as may be specified therein from the date on which the service of notices on occupiers required by sub-paragraph (3) of this paragraph is completed; and
( b) that at the expiration of that period the purchasing authority will expede a notice of title which, on being recorded in the appropriate Register of Sasines, will vest the land in the designated area in the authority."
…
(3) As soon as may be after executing such a declaration, the purchasing authority shall serve upon every occupier of any of the land in the area designated thereby … a notice describing that area and stating the effect of the declaration.
(4) At the expiration of the period specified in such a declaration from the date on which the service of notices on occupiers required by the last preceding sub-paragraph is completed … —
( a) the purchasing authority shall be entitled to enter on and take possession of the land in the area designated by the declaration or any of it without previous consent or compliance with sections eighty-three to eighty-eight of the Lands Clauses Consolidation (Scotland) Act, 1845; and
( b) the purchasing authority shall expede a notice of title containing a description of the land in the area designated by the declaration and narrating the circumstances under which the land has been purchased, and on such notice of title being recorded in the appropriate Register of Sasines in accordance with section eighty of the Lands Clauses Consolidation (Scotland) Act, 1845, the land shall vest in the purchasing authority absolutely and free of any heritable security or charge as if the circumstances in which under that Act the promoters of an undertaking have powers to expede a notarial instrument for vesting in them lands or any estate or interest in lands (including the estate, right and interest of any holder of a heritable security), or for the extinguishment of, or of a portion of, any charge, had arisen as regards all the said land and, subject to the next succeeding sub-paragraph, as regards all interests therein, and the authority had duly executed those powers accordingly at the expiration of the said period;
but the purchasing authority shall be liable to pay the like compensation, and interest on the compensation agreed or awarded, as they would have been required to pay if the provisions of sections eighty-three to eighty-eight of the said Act, and the provisions thereof compliance with which would have been requisite in order to render the said powers exercisable by them, had been complied with."
The problem in the present case arises from the last part of sub-paragraph (4) quoted above, beginning with the words "but the purchasing authority". I shall refer to that part of the sub-paragraph as "the proviso".
It will be convenient here to set out the dates on which the various procedural steps were taken. The Compulsory Purchase Order was made on 9th November 1967. On 23rd April 1969, the Secretary of State gave authority for it to include a direction that the expedited completion procedure was to apply and confirmed the Order including that direction. On 16th May 1969 the Order containing the direction was duly recorded in the Register of Sasines. On 8th August 1969 a declaration by the purchasing authority under paragraph 3(1) of the Sixth Schedule was made, and a notice under paragraph 3(3) stating the effect of the declaration was served on inter alios the respondents on 11th August 1969. The declaration stated ( a) that the purchasing authority intended to enter on the land at the expiration of a period of twenty-eight days from the date of service of the notice, and ( b) that at the expiration of that period they would expede a Notice of Title. The period of 28 days from 11th August expired on 8th September 1969, and the parties are now agreed that 8th September 1969 is the date on which, in terms of paragraph 3(4), the purchasing authority ( a) became entitled to enter on and take possession of the respondents' land and ( b) became bound to ("shall") expede a notice of title which, on being recorded, would have the effect that the land would vest in the purchasing authority absolutely. The formal notice was accompanied by a letter from the purchasing authority in the following terms:—
"With reference to the accompanying Notice, this is being served in conformity with statutory procedure and need not be treated as a Notice to Quit immediately on the expiry of the period of the twenty-eight days referred to therein. The date on which the Corporation will require actual possession is not yet known. It is likely that they will not wish to take possession until they are ready to instruct demolition works. Accordingly an arrangement for you to remain in occupation until the Corporation desire actual possession might be made."
It appears that no definite arrangement for the respondents to remain in occupation was ever made. They simply remained and carried on their business in the premises, paying no rent, but paying rates, until 27th May 1970 when the purchasing authority took physical possession. We know nothing of the circumstances in which they took possession or of any correspondence immediately before 27th May 1970.
In accordance with paragraph 3(4)( b) of the Sixth Schedule, a notice of title was expede by the purchasing authority, but it was not recorded until 1st October 1969. This led the Lord Ordinary, whose decision was in principle in favour of the respondents, to hold that interest was due not from 8th September 1969 but only from 1st October 1969, when the purchasing authority's title was actually completed. But both parties accepted when the case was in the Inner House that that cannot be right, and that, if the Lord Ordinary's line of reasoning is otherwise correct, it leads to interest being due from 8th September 1969. That is because of the provisions in the latter part of paragraph 3(4)( b) of the Sixth Schedule to the effect that the land shall vest in the purchasing authority absolutely as if "the authority had duly exercised those powers accordingly at the expiration of the said period;" (emphasis added). It is only fair to the Lord Ordinary to say that his attention does not seem to have been drawn to the words I...
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