Duttons Brewery Ltd (Plaintiff v Leeds City Council (Defendant
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STEPHENSON,LORD JUSTICE OLIVER,LORD JUSTICE FOX |
| Judgment Date | 31 July 1981 |
| Judgment citation (vLex) | [1981] EWCA Civ J0731-2 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 1981 |
| Docket Number | 81/0317 |
[1981] EWCA Civ J0731-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR. JUSTICE NOURSE)
Royal Courts of Justice
Lord Justice Stephenson
Lord Justice Oliver
and
Lord Justice Fox
81/0317
1979 D No. 155
In the Matter of the Housing Act 1957 and
In the Matter of the Acquisition Of Land Authorisation Procedure Act, 1946, City of Leeds (Bramley) (Part V Compulsory Purchase Order F 164) and
In the Matter of Compensation for the Acquisition of premises known as the New Inn, Bramley, Yorkshire and
In the Matter of the Land Compensation Act 1961 and Compulsory Purchase Act 1965
MR. P. GROUND Q.C. and MR. J. BEHRENS (instructed by Messrs. Sharpe Pritchard & Co., Solicitors, London WC2, agents for Mr. J. Rawnsley, Solicitor, Leeds) appeared on behalf of the Defendant (Appellant).
MR. PETER MILLETT Q.C., MR. B.J. KNIGHT Q.C., and MR. R. WILLMOTT-SMITH (instructed by Messrs. Farley, Parker, Pickles, Solicitors, Blackburn) appeared on behalf of the Plaintiff (Respondent).
This appeal concerns the compulsory purchase by the Leeds City Council ("the council") of The New Inn, Upper Town Street, Bramley in that city, a tied public house owned by Dutton's Brewery Limited ("the brewers"). The brewers let it to a licensee named Johnson in 1960. It was one of over 400 properties included in the City of Leeds (Bramley) Part V Compulsory Purchase Order 1964 made by the council on 4th March 1964 and confirmed by the Minister on 19th March 1965.
Thereafter, things moved slowly as such things often do. The council gave the brewers and all others interested in the property notice to treat on 3rd April 1967. In May 1968 the figure for compensation to be paid was "agreed" at £15,000. I use that word in its ordinary sense, but put it between inverted commas to preserve the brewers' contention that the agreement was not legally binding. But the council was in no hurry to take possession and the brewers were in no hurry to give it. The sales at the New Inn, which had been going down during the years 1962 and 1967, were going up. The council did not give notice of intention to enter and take possession until 4th May 1976 and possession was not given and taken until 50th June 1976. The council did not execute a deed vesting in themselves the fee simple in the property until 10th November 1978.
By that time the value of these licensed premises, a value based on "barrelage", had risen above £15,000 to a figure which the brewers claim to be £78,000. So on 24th January 1979 the brewers issued an originating summons for a declaration that the council was bound to compensate them for their freehold interest in the premises known as The New Inn, "such compensation to be assessed in accordance with the statutory rules, the said premises to be valued rebus sic stantibus as at the date of entry by the council, namely 30th June 1976".
That declaration Mr. Justice Nourse granted on 27th June 1980, and from his order the council appeals to this court.
Before the judge the council took a preliminary point that he had no jurisdiction to determine the issue raised by the summons because it was a question of disputed compensation which had to be referred to the Lands Tribunal by virtue of section 6 of the Compulsory Purchase Act 1965. The learned judge had no hesitation in rejecting the point and the council's appeal against that part of his decision is not pursued. I need therefore say no more about it except that it has led the brewers, at the suggestion of Lord Justice Oliver, to amend their summons to raise the real questions argued below by seeking a declaration that on 30th June 1976 "there was no subsisting binding and enforceable agreement (1) for the sale by (the brewers) and the purchase by (the council) of the said premises; or (2) for the amount of compensation payable (by the council to the brewers) for the compulsory acquisition thereof".
The learned judge decided those questions partly in the council's favour and held that there was a binding agreement as to price or compensation in 1968. But he decided in favour of the brewers that the agreement as to compensation no longer stood because it was subject to an implied term or condition that completion by entry should take place within a reasonable period after June 1968, and that reasonable period expired in 1971 or shortly thereafter. The judge found it unnecessary to decide whether the agreement had been "abandoned" by the council, and whether it was still enforceable by specific performance. The implication upon which the judge rested his judgment in favour of the brewers is challenged by the council in their notice of appeal, Mr. Ground for the council pointing out that it accepted what was and still remains a subsidiary argument not expressed in the summons or any affidavit. Mr. Millett for the brewers asks us to affirm the judge's decision both on that ground and on the other grounds which the judge rejected or did not decide.
The correspondence between the parties, their solicitors and their valuers shows that the figure of £15,000 was negotiated on the trade (barrelage) figures of The New Inn and included a figure for depreciation to fixtures and fittings. On 19th April 1968 the brewers wrote to their solicitors and to their valuers the letters which appear on pages 92 and 93 of our bundle. To the solicitors they wrote as follows: "The above property"—that is, The New Inn at Bramley—"has been the subject of a compulsory purchase order by the Leeds Corporation and our Agents, Messrs. Spencer, Son & Gilpin, have now agreed compensation with the Licensed Property Valuer at £14,500; in addition to this figure the Licensed Property Valuer has agreed to pay this Company £500 in respect of depreciation of fixtures and fittings. The Corporation have also agreed to pay your charges and those of Messrs. Spencer, Son & Gilpin.
"The sale is, of course, with vacant possession but as yet we have had no intimation from the Town Clerk as to when the Corporation might require possession of these premises and we propose to carry on trading until such time as the Corporation can give a firm date as to when completion of the purchase of this property can be expected.
"We should be pleased if you would bear in mind that under the terms of the Tenancy Agreement the tenant would normally require three months notice to terminate the tenancy and we should be obliged if you would take this point up with the Town Clerk as and when his department contact you in connection with the sale of this property, as the Licensed Property Valuer's report will not yet have been forwarded to the Town Clerk". To the valuers they wrote: "We have considered at some length what you say as regards this property and in the circumstances we are prepared to accept the Licensed Property Valuer's offer of £15,000 in respect of these premises, though we feel in this case that the Licensed Property Valuer's offer is not over generous".
Their valuers wrote to them and to their solicitors on 23rd and 26th April respectively the letters on pages 94 and 95 of our bundle, which I shall read. In the first letter they wrote: "We note that you are prepared to accept the Licensed Property Valuer's offer of £15,000 in connection with this property and when we receive the formal offer from him we will inform your solicitors accordingly.
"We note what you say with regard to the Licensed Property Valuer's offer. This is an unfortunate case in as much as the trade at this house has shown a steady decline over the last few years and it cannot be attributed to slum clearance where we could have argued that this had a detrimental affect. We feel that in all the circumstances we have got the best possible figure for this house".
In the other letter, page 95, they wrote: "On behalf of our mutual clients we have negotiated the compensation in connection with the above property. The details of the agreement reached with the Licensed Property Valuer are as follows:—
1. The premises to be acquired are freehold and comprise the New Inn"—and they refer to the plan which identifies it.
"2. The sale is to be with vacant possession.
3. The Licence authorising the sale of beer, wines and spirits for consumption on the premises is excluded from the sale and remains the property of the vendors.
4. There are no fixed charges or onerous restrictions or liabilities affecting the property.
5. Subject to the above conditions, compensation in settlement of all Heads of Claim to be the sum of £15,000 -s.-d. (Fifteen thousand pounds).
6. Included in the compensation at 5 above is an item representing depreciation of fixtures, fittings and trade effects. These remain the property of the vendors, subject to their removal before delivery up of possession.
7. In addition to the compensation set out at 5 above, the Acquiring Authority to pay the proper legal costs of the vendors and to make a contribution of £184.16s.-d. (one hundred and seventy-six guineas) towards Surveyor's fees.
No doubt you will be hearing from the Corporation in the matter in due course".
Thereupon the brewers' solicitors wrote to the Town Clerk of the council on 29th April; that is the letter on page 96 of the bundle and it reads: "We understand that you will shortly be hearing from the Licensed Property Valuer indicating that compensation has been agreed in the above matter at £14,500 and in addition you have been recommended to pay £500 in respect of the...
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