Decision Nº LCA 21 2014. Upper Tribunal (Lands Chamber), 23-06-2015 , [2015] UKUT 0195 (LC)
| Jurisdiction | UK Non-devolved |
| Judge | Martin Rodger QC, Deputy President Mr Peter McCrea FRICS |
| Neutral Citation | [2015] UKUT 0195 (LC) |
| Date | 23 June 2015 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | LCA 21 2014 |
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UPPER TRIBUNAL (LANDS CHAMBER)
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UT Neutral citation number: [2015] UKUT 0356 (LC)
UTLC Case Number: LCA/21/2014
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
COMPENSATION – COSTS – temporary possession under Crossrail Act 2008 – whether Tribunal has power to award costs in reference – s.4, Land Compensation Act 1961 – rule 10, Tribunal Procedure (Upper Tribunal)(Lands Chamber) Rules 2010
IN THE MATTER OF A NOTICE OF REFERENCE
BETWEEN BPP (FARRINGDON ROAD) LIMITED Claimant
and
CROSSRAIL LIMITED
Compensating
Authority
Re: Caxton House, Farringdon Road, London EC1
Before: Martin Rodger QC, Deputy President and Peter McCrea FRICS
Sitting at: Royal Courts of Justice, Strand, London WC2A 2LL
on
4 June 2015
Robin Purchas QC and Rebecca Clutten, instructed by Bircham Dyson Bell LLP, for the claimant
Michael Barnes QC and Eian Caws, instructed by Ashurst LLP, made submissions in writing for the compensating authority
© CROWN COPYRIGHT 2015
The following cases are referred to in this decision:
English Property Corporation v Royal Borough of Kingston-Upon-Thames (1998) 77 P. & C.R. 1
Purfleet Farms Ltd v Secretary of State of Transport [2003] 1 P. & C.R. 20
Emslie & Simpson Limited v Aberdeen District Council [1995] RVR 159
Padfield v Eastern Electricity Board (1971) 24 P. & C.R. 423
West Midlands Joint Electricity Authority v Pitt [1932] 2 KB 1
Wildtree Hotels Ltd v Harrow LBC [2001] 2 AC 1
re Penny and South Eastern Rly Co 1857 7 E & B 660, 669
Dickinson v Network Rail [2014] UKUT 372 (LC)
Johnston v TAG Farnborough Airport Ltd [2014] JPL 367
Hills (Patents) Ltd v University College Hospital Board of Governors [1956] 1 QB 90
Pye (Oxford) Ltd v Graham [2003] 1 AC 419
Introduction
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Does the Lands Chamber of the Upper Tribunal have power to award costs in a reference for compensation for the taking of temporary possession of land under the Crossrail Act 2008? If it does not, may the costs incurred in such a reference form part of the compensation payable to the owner of land which has been taken temporarily under the powers conferred by the Act?
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Those issues arise for consideration following the Tribunal’s decision on 27 April 2015 refusing to strike out this reference by the claimant, BPP (Farringdon Road) Limited, for compensation for the taking of temporary possession of the basement of Caxton House, a building in Farringdon Road, London EC1. The parties agree that, if the Tribunal has power to award costs, the costs of the application should be paid by Crossrail Ltd, the compensating authority, to the claimant. They do not agree whether the Tribunal has such a power, nor whether the Tribunal will be able to make an award of costs in favour of either party at the conclusion of the reference.
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The claimant anticipates that the costs it will incur in the reference will exceed £1.1m, and we have no reason to doubt that those of Crossrail will be of a similar order. The issue is therefore of considerable importance to the parties, but it is also of importance to others to know the scope of the Tribunal’s jurisdiction in relation to costs under rule 10 of the Tribunal Procedure (Upper Tribunal)(Lands Chamber) Rules 2010, as amended with effect from 1st July 2013 by the Tribunal Procedure (Amendment No.3) Rules 2013.
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Both parties have made full written submissions which, in the claimant’s case, have been amplified by further oral representations.
The proceedings
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The relevant background was sketched by the Tribunal in its decision of 27 April. By an agreement entered into between the claimant and the Secretary of State for Transport on 2 August 2007 the Secretary of State became entitled to take temporary possession of the basement of Caxton House for use as a working site in connection with the Crossrail project. The Secretary of State subsequently nominated Crossrail Ltd as the undertaker of that project.
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It was initially agreed that compensation would be payable to the claimant in respect of the temporary possession of the site as if that temporary possession had been acquired compulsorily under Schedule 5 to the Crossrail Bill which was then passing through Parliament. The Bill provided for the nominated undertaker to pay compensation to the owners and occupiers of land of which possession was taken under paragraph 1(4) of Schedule 5 “for any loss that they may suffer by reason of the exercise in relation to the land of the powers conferred by this paragraph.” As enacted, the Crossrail Act 2008 is to the same effect. The right to compensation conferred by paragraph 1(4) is supplemented by paragraph 1(5) of Schedule 5 which states that:
“Any dispute as to a person's entitlement to compensation under sub-paragraph (4), or as to the amount of compensation, shall be determined under and in accordance with Part 1 of the Land Compensation Act 1961”.
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Temporary possession of the basement of Caxton House was taken by Crossrail on 6 January 2010 for use as a working site. It is anticipated that possession will be returned to the claimant in 2018.
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In this reference the claimant claims £29.75m in compensation for the exercise by Crossrail of its statutory power “to enter upon and take possession of” the basement of Caxton House. In a second reference, which is to be heard at the same time as this reference, the claimant also claims compensation for the permanent acquisition of part of the site of Caxton House. The parties agree that the Tribunal has power to award costs in that second reference because it is “proceedings for compensation for compulsory purchase” falling within rule 10(6)(a) of the Rules. Whether the Tribunal has power to award costs in this reference for temporary possession depends on the effect of the adoption of Part I of the Land Compensation Act 1961 as the basis for the determination of disputes over compensation under the Crossrail Act 2008, and on whether the reference can properly be regarded as either “proceedings for compensation for compulsory purchase”, or as “proceedings for injurious affection of land” falling within rule 10(6)(b) of the Rules.
The Tribunal’s power to award costs
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The Tribunal has full power to award costs, subject to restrictions imposed by its procedure rules and, in cases to which it applies, to the effect of section 4 of the Land Compensation Act 1961. The source of the jurisdiction is section 29, Tribunals Courts and Enforcement Act 2007, which provides so far as is relevant that:
“(1) The costs of and incidental to –
(a) [First-tier Tribunal]
(b) all proceedings in the Upper Tribunal,
shall be in the discretion of the Tribunal in which the proceedings take place.
(2) The relevant Tribunal shall have full power to determine by whom and to what extent the costs are to be paid.
(3) Subsections (1) and (2) have effect subject to Tribunal Procedure Rules”.
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The relevant Tribunal Procedure Rules are the 2010 Rules (as amended), and in particular rule 10. Prior to its amendment with effect from 1 July 2013 rule 10(1) confirmed the breadth of the power to award costs, saying simply that “the Tribunal may make an order for costs on an application or on its own initiative”. This power was curtailed only in the case of appeals from leasehold valuation tribunals by rule 10(7).
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In its amended form rule 10 adopts a very different approach. An order for costs may now only be made in certain defined circumstances. The relevant parts of rule 10 for present purposes provide as follows:
“(1) The Tribunal may make an order for costs on an application or on its own initiative.
(2) Any order under paragraph (1)—
(a) may only be made in accordance with the conditions or in the circumstances referred to in paragraphs (3) to (6);
(b) must, in a case to which section 4 of the 1961 Act applies, be in accordance with the provisions of that section.
(3) The Tribunal may in any proceedings make an order for costs—
(a) under section 29(4) of the 2007 Act (wasted costs) and for costs incurred in applying for an order for such costs;
(b) if the Tribunal considers that a party or its representative has acted unreasonably in bringing, defending or conducting the proceedings; or
(c) [reimbursement of tribunal fees].
(4) Except in proceedings to which paragraph (5) or (6) apply, the Tribunal may—
(a) with the consent of the parties, or
(b) where there is a disparity of interest or resources between the parties, direct that an order for costs may be made in the proceedings against one or more of the parties in respect of costs incurred following such a direction.
(5) The Tribunal may make an order for costs in judicial review proceedings.
(6) The Tribunal may make an order for costs in proceedings—
(a) for compensation for compulsory...
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