Knibb v National Coal Board
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE NOURSE,LORD JUSTICE GLIDEWELL |
| Judgment Date | 11 July 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0711-3 |
| Docket Number | 86/0661 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 July 1986 |
[1986] EWCA Civ J0711-3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
(CIVIL DIVISION)
From: The Lands Tribunal
Royal Courts of Justice,
The Master of the Rolls
(Sir John Donaldson),
Lord Justice Nourse
and
Lord Justice Glidewell
86/0661
and
MR ANTHONY PURNELL, Q.C., and MR GUY ROOTS (instructed by J.G. Tyrrell, Esq., Nottingham) appeared on behalf of the Compensating Authority.
MR NIGEL WILKINSON (instructed by Messrs Anderson & Co., Nottingham) appeared on behalf of the Claimants.
The primary issue raised by this appeal is whether the Lands Tribunal has jurisdiction to include a sum by way of interest when resolving a dispute as to the amount of compensation payable under the Coal Mining (Subsidence) Act, 1957. It is a matter of some general importance because, although the sum involved in the instant appeal is typically not very large, such claims are numerous and accordingly the result of this appeal will, subject to any further appeal, have a significant effect upon the total amount payable by the National Coal. Board in respect of subsidence caused by coal mining.
The claim of Mr and Mrs Knibb (the "Claimants") was complicated by the fact that there were two periods during which their bungalow, at 27, Nottingham Road, Nuthall, was affected by subsidence. In 1966 they began building it on the site of a previous building. Some time between then and 1972 the bungalow, which had not yet been completed, suffered subsidence damage as a result of the mining of the Tupton seam. Arguments ensued as to the extent to which the damage was caused by the mining or by a failure to build the bungalow on the foundations of the previous building. However, in 1972 this claim was settled for £2,900, which was duly paid by the National Coal Board. Not all the defects were remedied and the bungalow had still not been completed when, in the period July 1974 to December 1975, it was further affected by subsidence caused by the mining of the deeper Blackshale seam. The claimants again claimed compensation and on this occasion there was the further complication that they maintained, and the Board denied, that subsidence was still continuing.
The subsequent history can be briefly stated. Under section 1 of the 1957 Act, the primary obligation of the Board is to execute remedial works. However, it has the right to elect instead to make a payment to the claimant equal to the reasonable cost of executing remedial works or to the depreciation in the value of the dwelling house, if that be less. Although it was only on 51 July 1980 that the Board wrote formally to the claimants' solicitors giving notice that "as the reasonable cost of executing remedial works would, in the opinion of the Board, exceed the amount of the depreciation in the value of the property caused by the said damage, the Board have decided to make a payment under paragraph (a) of section 1(4) and not to execute remedial works under section 1(2)", the Board must in fact have elected not to execute remedial works at some time before April 1979. I say that because in April 1979 the Board offered to settle the claim for a payment of £6,300 plus certain costs, and in September 1979 it increased that offer to £7,000 with costs. Both these offers were, I think, on the basis of an election to pay compensation based upon the reasonable cost to the claimants of executing remedial works. When, in July 1980, the Board made the further and formal election to compensate on a depreciation basis, this was followed in February 1981 by a reduced offer to settle for the sum of £6,750 with costs. None of these offers was accepted by the claimants and on 5 August 1981 Mr and Mrs Knibb referred their claim to the Lands Tribunal.
The decision of the Lands Tribunal (Mr J.H. Emlyn Jones F.R.I.C.S.) was that:
"THE TRIBUNAL DETERMINED the amount of compensation payable in respect of damage to the land and premises…in the sum of £2,500 (two thousand five hundred) together with interest from 31st July 1980".
No order was made as to costs, save that the Tribunal ordered a legal aid taxation. Both parties asked the Tribunal to state cases for the opinion of this court, the National Coal Board on the subject of the jurisdiction to award interest and the claimants on whether interest should not have been awarded from 31 December 1975 rather than 31 July 1980 and on whether they should not have been awarded their costs.
The Jurisdiction to award interest
By section 3(1) of the Law Reform (Miscellaneous Provisions) Act, 1934, it is provided that
"In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sums for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of judgment".
Before the Lands Tribunal it was contended on behalf of the claimants that the Tribunal was a court of record and the claim a claim for damages. The Member held that whilst the Tribunal had the characteristics of a court (see Attorney-General v. B.B.C. (1981) A.C. 303) he was not persuaded that it was a court of record, since it was a creature of statute and the statute creating it did not so declare. This aspect of his decision is now accepted.
The Member then turned to the alternative basis upon which he had been urged to assume jurisdiction to award interest, namely, by analogy with the powers of arbitrators. After an exhaustive review of the authorities he held that there was no reason in logic why the Lands Tribunal should not have the same powers as an arbitrator. In reaching this decision he said that he was also influenced by the fact that smaller claims under the Act, where the rateable value of the property did not exceed £100, were referred to the County Court which was a court of record and, in appropriate cases, had power to award interest. He then turned to the question of whether the proceedings were for the recovery of any debt or damages and concluded that they were properly to be regarded as for the recovery of damages.
The whole question of the power to award interest was examined exhaustively by Lord Brandon of Oakbrook in President of India v. La Pintada Compania (1985) 1 A.C. 104 in the context of an award of interest by an arbitrator, the claim for the principal debt having been settled after the proceedings had been begun, but before the award was made. From this it emerges that there is no general common law power which entitles courts to award interest (page 115), but that if a claimant could bring himself within the second part of the rule in Hadley v. Baxendale (1854) 9 Exch.341, he could claim special damages, notwithstanding that the breach of contract alleged consisted in the non-payment of a debt (page 127). It also emerges (at page 119) that, so far as arbitrators are concerned:
"The true position in law is, in my opinion, not in doubt. It is this. Where parties refer a dispute between them to arbitration in England, they impliedly agree that the arbitration is to be conducted in accordance in all respects with the law of England, unless, which seldom occurs, the agreement of reference provides otherwise. It is on this basis that it was held by the Court of Appeal in Chandris v. Isbrandsen-Moller Co. Inc. (1951) 1 K.B. 240 that, although section 3(1) of the Act of 1934, by its terms, empowered only courts of record to include interest in sums for which judgment was given for damages or debt, arbitrators were nevertheless empowered, by the agreement of reference, to apply English law, including so much of that law as is to be found in section 3(1) of the Act of 1934".
One other decision of the House of Lords deserves mention by way of introduction, namely, Monmouthshire C.C. v. Newport B.C. (1947) 1 All E.R.916, where the award was that of a statutory, as contrasted with a consensual, arbitrator, who had been appointed under the provisions of the Local Government Act, 1933 to determine the sums to be paid by one local authority to another consequent upon an alteration of boundaries. The approach adopted by the House was to determine the mandate of the arbitrator by reference to the terms of the statute under which he was appointed, treating the statute as the equivalent of a consensual agreement to refer. It held that an arbitrator appointed under that statute for that purpose had no power to award interest, but not that a statutory arbitrator could not have such a power.
The mandate of the Lands Tribunal is derived from the Lands Tribunal Act, 1949, the Lands Tribunal Rules 1975 and the Coal Mining (Subsidence) Act, 1957. The 1949 Act is silent on the topic of interest, but, consistently with the fact that it is an Act to amend the Acquisition of Land (Assessment of Compensation) Act, 1919, under which official arbitrators were appointed (see section 1(3) to the 1949 Act), contains power in section 3(6) to make rules applying to the Tribunal any of the provisions of the Arbitration Acts 1889 to 1934, now, so far as material, replaced by the Arbitration Act 1950. In the exercise of this power, rule 38 of the 1975 rules applies certain sections of the 1950 Act to all proceedings of the Tribunal and certain additional sections to proceedings in which the Tribunal is acting as an arbitrator under a reference by consent. The sections which apply to all proceedings are 12 (conduct of proceedings, witnesses, etc.), 14...
To continue reading
Request your trial
- Chiswell Shipping Ltd v National Iranian Tanker Company (World Renown, World Symphony)
-
Mcareavey and Another v Coal Authority
...of view formed by My Lords, and conscious of the difficulties I was having, I chanced in the course of some research to find Knibb v National Coal Board [1987] Q.B. 906. The issue there was whether or not the Lands Tribunal was entitled to award interest on any damages awarded. Sir John Don......
-
Emile Elias and Company Ltd v Attorney Generral of Trinidad & Tobago
...necessary for the payee to establish facts which bring the case within the second part of the rule in Hadley v. Baxendale. In Knibb v. National Coal Board [1986] 3 All E.R. 644 at 646, [1986] 3 WLR 895 at 899 Sir John Donaldson MR stated the effect of the decision in President of India v. ......
-
British Coal Corporation v Gwent County Council
...GLIDEWELL said that on the issue whether interest was payable under the 1934 Act, the main authority was Knibb v National Coal BoardELR((1987) QB 906), in which the Court of Appeal had upheld a decision of the Lands Tribunal that it had the power to award interest on the amount of compensat......