Pepys v London Transport Executive
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ROSKILL,Sir JOHN PENNYCUICK |
| Judgment Date | 05 November 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J1105-2 |
| Date | 05 November 1974 |
| Court | Court of Appeal (Civil Division) |
[1974] EWCA Civ J1105-2
The Master Of The Rolls (Lord Denning),
Lord Justice Roskill and
Sir John Pennycuick
In The Supreme Court of Judicature.
Court of Appeal.
Appeal by London Transport Executive from decision of the Lands Tribunal of 28th June, 1973.
Revised.
Mr. KENNETH BAGNALL, Q.C., and Mr. JONATHAN GAUNT (instructed by Mr. G.S.M. Birch) appeared on behalf of the Appellants.
The Respondent, Dr. Pepys, did not appear and was not represented. Dr. Pepys was called inside and outside the Court, but there was no reply.
In the years from 1966 to 1968 a new underground line was being constructed as an extension of the Victoria Line. It went 70ft. below the ground in Islington. It passed below a house, No. 33 Gibson Square, Islington, which was the property of Dr. Elizabeth Olga Pepys. She bought her house on 7th February, 1967, at a price of £14,000. At that time the line was under construction. On 1st December 1968 the line was open for public traffic. In order to do the work, the London Transport Executive acquired from the previous owner an easement. It contained a clause by which the owner of the house retained a right to compensation in respect of any injurious affection to the house by reason of the working of the railway, provided that the claim was made within two years from the opening. That clause endured for the benefit of Dr. Pepys. In June 1970 Dr. Pepys was appointed to a post in Cambridge and decided to sell the house. In August 1970 a proposed purchaser, a Mr. Matthews, offered £18,000 for the house subject to contract; but on a later visit he thought the noise was so bad that he withdrew his offer.
In September 1970 Dr. Pepys put in a claim for compensation on the ground that the trains running underneath had affected the value of the property because of the noise and vibration. In December 1970 Dr. Pepys sold the house to a Mrs. Tablenow. The prior was only £15,850. Dr. Pepys said that she had lost the difference of £2150 owing to the injurious affection to the house. The London Transport Executive said that the house had not diminished in value. The noise from this underground railway was, they said, no worse than the noise from a passing lorry. They said that very few people had claimed compensation for injurious affection. Only 10 or 12 claims were received, and of them only 3 were still active at the time of the hearing. In other words, most people put up with the noise and made no claim.
Just before the hearing in May of 1973 the Transport Executive put in a sealed offer. They wanted to dispose of the claim. We now know that the sealed offer was £500. Dr. Pepys did not accept it. She went on with the claim. Unfortunately she lost. The reason was because she could not prove that the purchase price of £15,850 was any less because of the noise and vibration. The member of the Lands Tribunal said: "No evidence was adduced that the eventual purchase at £15,850 was a price discounted by reason of noise…. It is for the claimant to establish that the market value of the subject house has been depreciated by the running of the trains and this she has failed to do." Dr. Pepys lost. It was on a point of fact. So she had no ground for appeal. That was the end of the case on compensation.
Now a question arises about the costs. The member of the Tribunal said: "Having read the decision in this matter and having then caused a sealed offer lodged by the acquiring authority to be opened, I find that the claimant had been offered unconditionally an amount of £500; accordingly the acquiring authority will pay the claimant her costs of this reference up to the date of the sealed offer, and the claimant will pay the costs of the acquiring authority as from the date of the sealed offer."
The Railway Executive were upset by that order as to costs. They had won the case. Yet they had been ordered to pay the costs of Dr. Ppys up to the date of the offer being put in. They wrote a letter to the President of the Lands Tribunal asking whether this was a slip. The Lands Tribunal said No: it was a matter in the discretion of the Tribunal and it was not to be altered. Whereupon the Transport Executive asked for a case to be stated about the costs. The member has stated a case in these words:
"The question upon which the decision of the Honourable Court is desired is whether I properly ordered the Acquiring Authority to pay the Claimant her costs of this Reference up to the date of the sealed offer having regard to the provisions of Section 4 of the Land Compensation Act 1961."
The first point is whether the Tribunal has any discretion as to the costs before the sealed offer. Under the Lands Tribunal Act, 1949, section 3(5), the Lands Tribunal is given general discretion as be costs. But there is a rule which takes away that discretion in cases to which the provisions of section 4(1), (2) and (3) of the Land Compensation Act 1961 applies. It was submitted to us by Mr. Bagnall that under the section the Tribunal have only a discretion as to the costs after the date of the sealed offer, but that they have no discretion as to the costs before the date of the sealed offer. He submits that the claimant is not entitled to any costs before the sealed offer, even though he or she is awarded a sum of compensation. He admits that his submission is contrary to the practice of the Tribunal. If the claimant is awarded a sum which is less than the sealed offer, the practice is for the claimant to be awarded the costs up to the date of the sealed offer: but from that date onwards the authority gets the costs. It seems to me that the present practice is well justified by the statutory provisions. The general direction given in section 3(5) of the 1949 Act applies to the costs before the sealed offer. Section 4 (1), (2) and (3) of the 1961 Act would apply to the costs after the sealed offer.
The second point is how the discretion should be exercised in a case like the present where the claimant has failed altogether. We have been referred to a number of cases starting with Wootton v. Central Land Board (1957) 1 W.L.R. 424; and finally in Knight v. Clifton (1971) 1 Ch. 700. The cases show that the discretion is to be judicially exercised: and that it is usually exercised in this way: that if the plaintiff falls, he has normally to bear his own costs and often to pay the costs of the other side. Sometimes each side is left to bear its own costs. But it is exceedingly rare for a successful defendant to have to pay the costs of a plaintiff who has failed. This should never be done except for very special reasons: and in that case the Tribunal ought to state its reasons for so exceptional a course. This is borne out by what Lord Goddard said in Lewis v. Haverfordwest Rural District Council (1953) 1 W.L.R. 1486, at page 1487.: "Those words 'judicially exercised' are always somewhat difficult to apply, but they mean that the arbitrator must not act capriciously and must, if he is going to exercise his discretion, show a reason connected with the case and one which the court can see is a proper reason." I am aware that in Hood Investment Co. Ltd. v. Marlow Urban District Council (1964) 15 P. & C.R. 229, Lord Justice Harman said: "The President, being appealed to for reasons, wisely gave none, and I think he was entitled to keep his counsel on that matter." But that was, I think, a mistake. It seems to me that if a Tribunal is departing from the ordinary exercise of discretion - in so exceptional a way - it ought to give its reasons. The same would apply to an arbitrator. Even a Judge of the High Court ought to do so, though no appeal lies except with his leave.
No reasons have keen adduced, and it seems to me that none exist, whereby the Transport...
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