Maxim Alexander Bishop v Transport for London
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lindblom,Lord Justice David Richards |
| Judgment Date | 05 April 2019 |
| Neutral Citation | [2019] EWCA Civ 555 |
| Docket Number | Case No: C3/2018/0572 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 April 2019 |
[2019] EWCA Civ 555
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (LANDS CHAMBER)
MR MARTIN RODGER Q.C. AND MR P.D. McCREA F.R.I.C.S.
[2017] UKUT 405 (LC)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lindblom
and
Lord Justice David Richards
Case No: C3/2018/0572
Mr Mark Warwick Q.C. (instructed by Gordon Dadds LLP) for the Appellants
Mr Guy Williams (instructed by Town Legal LLP) for the Respondent
Hearing date: 31 January 2019
Judgment Approved by the court for handing down (subject to editorial corrections)
Introduction
This appeal attacks an award of costs made in favour of an acquiring authority on a claim for compensation for compulsory purchase in a reference to the Upper Tribunal (Lands Chamber) (“the Tribunal”).
The award of costs was made by the Tribunal (Mr Martin Rodger Q.C., Deputy Chamber President, and Mr P.D. McCrea F.R.I.C.S.) in its “Addendum on Costs”, dated 8 January 2018, ordering the appellants, Maxim and Nigel Bishop, to pay the costs of the respondent, Transport for London Ltd. (“TfL”) – save for 20% of the costs incurred before 9 February 2017 and the costs of a preliminary issue – in a claim for compensation for the compulsory purchase of leasehold interests in Bishop's Yard at Lake Avenue in Slough. The site was required for the Crossrail project, and TfL was authorized to acquire it compulsorily by section 6 of the Crossrail Act 2008. Permission to appeal against the Tribunal's decision on costs was granted by Lewison L.J. on 13 July 2018.
For more than 90 years the appellants' family had carried on business at Bishop's Yard – since the 1940s dealing in scrap metal through several companies. A portion of the site, about half a hectare, was held under a series of leases from Network Rail and its predecessors. The last of these was granted to the appellants on 29 October 2012 for a term expiring on 22 December 2031. The site was compulsorily acquired by TfL on 4 February 2014. Metal Recycling Services (UK) Ltd., a company of which the appellants were directors, had been trading from the site but had discontinued its business there within three months of receiving TfL's notice of entry on 13 May 2013. It later went into liquidation. Members of the Bishop family continued trading from a smaller site within Bishop's Yard, at 69 Lake Avenue, of which they owned the freehold.
The appellants made a claim for compensation totalling £4,177,782, which, they said, represented the remuneration they would otherwise have received from using the land the subject of the lease in the period between its leaving the site on 13 September 2013 and the expiry of the lease in 2031. The claim came before the Tribunal on a notice of reference dated 28 January 2016. As formulated in the appellants' statement of case, dated 15 January 2016, the claim was for (1) lost income from the cessation of the business carried on from the site, from 13 September 2013 until the expiry of the lease, valued at £4,024,260; (2) loss of income before 13 September 2013, valued at £43,206; (3) expenses incurred in vacating the site, valued at £56,513, plus VAT; and (4) losses incurred because of the disposal of equipment from the site, valued at £53,803. In its statement of case in reply, dated 10 March 2016, TfL maintained that the appellants were not entitled to any compensation because they could not show that, had the site not been taken, the leasehold land would have generated enough profit to pay them the income they said they had lost, or indeed any income at all, except at the expense of their creditors. In a letter from its solicitors to the appellants dated 8 February 2017, TfL made a sealed offer to settle the claim, for £378,000 plus costs. The offer was stated to be “Without prejudice save as to costs”, and “… open for acceptance unless and until we notify you otherwise”. The appellants did not accept it.
The hearing before the Tribunal took place on 6, 7, 10, 11 and 13 July 2017. The appellants both gave evidence, as did other lay witnesses on their behalf, and their two expert witnesses – an engineer and a forensic accountant. Two expert witnesses – an engineer and a forensic accountant – gave evidence for TfL. On 14 July 2017 TfL's solicitors withdrew the offer.
The Tribunal's decision on the reference was issued on 18 October 2017. It concluded that the only head of claim on which the appellants were entitled to compensation was their expenditure in clearing the site, totalling £46,815. The Tribunal then invited the parties' submissions on costs. It dealt with those submissions in its “Addendum on Costs”, which explains the decision now the subject of this appeal: that the appellants were to pay 80% of TfL's costs of the reference incurred before 9 February 2017 – though not the costs of the preliminary issue, which had already been awarded to them – and TfL's costs incurred on or after 9 February 2017. On 16 February 2018 the Tribunal refused permission to appeal against that decision.
The issues in the appeal
The only contentious part of the Tribunal's decision on costs relates to the period before the sealed offer was made on 8 February 2017. The appellants accept that the Tribunal cannot be criticized for awarding TfL its costs from that date, the award of compensation having fallen well short of the sealed offer. The main issue in the appeal, therefore, is whether the Tribunal erred in law in ordering the appellants to pay 80% of TfL's costs in the period before the offer was made (ground 2 of the appeal). Within that issue lies another, which is whether the Tribunal was wrong to conclude that TfL was the “successful party” in the reference (ground 1).
The Tribunal's costs jurisdiction
Section 29 of the Tribunals, Courts and Enforcement Act 2007 provides:
“(1) The costs of and incidental to –
…
(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.”
Section 4 of the Land Compensation Act 1961 provides, in subsection (A1), that “[in] any proceedings on a question referred to the Upper Tribunal under section 1 of this Act … (a) the following subsections apply in addition to section 29 of [the 2007 Act] and provisions in Tribunal Procedure Rules relating to costs”. Subsection (1) provides:
“(1) Where …
(a) the acquiring authority have made an unconditional offer in writing of any sum as compensation to any claimant and the sum awarded by the Upper Tribunal to that claimant does not exceed the sum offered …
…
the Upper Tribunal shall, unless for special reasons it thinks it proper not to do so, order the claimant to bear his own costs and to pay the costs of the acquiring authority so far as they were incurred after the offer was made …”.
Rule 10 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 (“the Lands Chamber Rules”) states:
“Orders for costs
10. – (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.
…
(6) The Tribunal may make an order for costs in proceedings –
(a) for compensation for compulsory purchase;
…
…
(8) In proceedings to which paragraph (6) applies, the Tribunal must have regard to the size and nature of the matters in dispute.
…”.
Paragraph 1.1 of the Upper Tribunal (Lands Chamber) Practice Directions (“the Practice Directions”), published on 29 November 2010, states that they “… (c) supplement the Rules and must be read in conjunction with them”. Paragraph 12 amplifies the provisions of the Lands Chamber Rules relating to orders for costs. It states:
“12. Costs
12.1. Power to award costs
1) Under section 29 of [the 2007 Act] the Upper Tribunal has power to order that the costs of any proceedings incurred by one party shall be paid by any other party …
…
12.2. Exercise of discretion in awarding costs
Costs are in the discretion of the Tribunal, although this discretion is qualified by the particular provisions in section 4 of [the 1961 Act] (see paragraph 12.3(2) below). Subject to what is said below the discretion will usually be exercised in accordance with the principles applied in the High Court and county courts. Accordingly, the Tribunal will have regard to all the circumstances, including the conduct of the parties; whether a party has succeeded on part of their case, even if they have not been wholly successful; and admissible offers to settle. The conduct of a party will include conduct during and before the proceedings; whether a party has acted reasonably in pursuing or contesting an issue; the manner in which a party has conducted their case; whether or not they have exaggerated their claim; and the matters stated in paragraphs 2.2, 8.3(2), 8.4 and 10 above.
12.3. The general rule for costs
1) The general rule is that the successful party ought to receive their costs. On a claim for compensation for compulsory acquisition of land, the costs incurred by a claimant in establishing the amount of disputed compensation are properly to be seen as part of the expense that is imposed on the claimant by the acquisition. The Tribunal will, therefore, normally make an order for costs in favour of a claimant who receives an award of compensation unless there are special reasons for not doing so.
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