THE VICE CHANCELLOR and The Secretary of State for Transport and GEORGE WILLIAM CHRISTOS and MAUREEN ELLEN CHRISTOS
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice Sedley |
| Judgment Date | 25 July 2003 |
| Neutral Citation | [2003] EWCA Civ 1073 |
| Date | 25 July 2003 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C3/2002/2586 |
[2003] EWCA Civ 1073
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LANDS
TRIBUNAL
Royal Courts of Justice
Strand,
London, WC2A 2LL
The Vice – Chancellor
Lord Justice Mummery And
Lord Justice Sedley
Case No: C3/2002/2586
MR GUY ROOTS QC and MR MICHAEL HUMPHRIES QC (instructed by Cripps Harries Hall) for the Appellant
MR JONATHAN GAUNT QC and MR BARRY DENYER-GREEN (instructed by Houghtons Solicitors Limited) for the Respondents
The Appeal
This appeal concerns the assessment of compensation on the compulsory acquisition of residential property and surrounding land in Kent for the purposes of the construction of the Channel Tunnel Rail Link between St Pancras in London and Castle Hill in Folkestone. The appellant Secretary of State for Transport, formerly the Secretary of State for the Environment, Transport and the Regions (the acquiring authority), exercised powers of compulsory purchase under the Channel Tunnel Rail Link Act 1996 (the 1996 Act) to acquire property belonging to the respondents, Mr and Mrs Christos.
On 1 May 2001 Mr and Mrs Christos gave notice of reference to the Lands Tribunal (the Tribunal) to determine the amount of compensation. By an order dated 8 November 2002 the Tribunal determined the amount of compensation payable in respect of the compulsory acquisition of the freehold interests of Mr and Mrs Christos in their property at the sum of £618,945. The determination was made by Mr NJ Rose FRICS following a 10 day hearing in April and May 2002.
On 6 January 2003 Schiemann LJ granted the acquiring authority permission to appeal. By an order dated 24 March 2003 Laws LJ granted the respondents permission to cross appeal.
The Facts
Mr and Mrs Christos were the owners of a freehold dwelling house with 35 acres of land at Torver Beck, Sittingbourne Road, Detling, near Maidstone (the Property). The house consisted of 2 bungalows knocked into a large single dwelling. There was a heated outdoor swimming pool and a stable block. In addition to 35 acres of surrounding land Mr and Mrs Christos also claimed title by adverse possession to an area of 3.6 acres of woodland (the Blue Land). Their claim to register possessory title to the Blue Land was rejected by the Land Registry in letters dated 15 October and 25 October 1999. It is common ground that the Property was difficult to value.
Between 18 December 1998 and 2 March 1999 the acquiring authority issued notices to treat and served notices of entry in relation to part of the Property.
On 10 March 1999 the acquiring authority, represented by Mr Stephen Bowman FRICS of Union Railways Property, attended a "without prejudice" meeting with Mr and Mrs Christos and their solicitor, Mr Houghton, in order to discuss the range of prices appropriate on the compulsory purchase of the Property. On 12 March 1999 Mr Bowman wrote two letters to Mr Houghton. The first letter was headed "subject to contract and without prejudice save as to costs". Mr Bowman referred to the discussions on 10 March:
"I confirm that in order to settle this matter I am prepared to offer to purchase the whole of your clients' property in the sum of £500,000 (five hundred thousand) together with the usual heads of claim for disturbance and fees.
This offer is made subject to the following conditions:-
(1) It is open for acceptance for a period of 3 months from the date of this letter.
(2) If it is necessary to take action to achieve forcible possession of the property then the offer is deemed to have been withdrawn.
(3) Your client is able to show good and marketable title to the property as shown on the attached plan….".
The second letter on the same date was also headed "subject to contract". The letter referred to the meeting of 10 March at Mr Bowman's offices and stated that he agreed that "looking at the whole property, it is unique and difficult to value". The letter concluded
"I must advise that we will be taking possession of the property on or after 18 March. I hope that we can do this by agreement and work together with your client to limit the impact of our works upon him and his family.
I confirm the view expressed at our meeting that in the event of forcible possession action being needed and if the site is occupied by protestors who are on the site at the instigation or invitation of your client then we will seek to recover the costs from your client. I confirm that it is our wish to work with your client and to reach agreement by negotiation on the various issues that were raised but we are governed by the rules of compulsory purchase and cannot submit to blackmail or threats such as were made at our meeting.
This is an open letter and I reserve the right to refer to it in any future litigation."
On 17 March 1999 Mr Houghton, on behalf of Mr and Mrs Christos, served on the acquiring authority a counter-notice to take the whole Property. Although the counter-notice referred to section 8 (1) and (2) of the Compulsory Purchase Act 1965, the right to serve such a counter-notice was in fact conferred by paragraph 11 of Schedule 4 to the 1996 Act, which applies instead of section 8 of the 1965 Act. The acquiring authority has, however, accepted that it was a valid counter-notice and that, by virtue of paragraph 11(4) of Schedule 4, the effect of the service of the counter-notice was that the notice to treat already given by the acquiring authority is "deemed to be a notice to treat in addition for the remainder of the land subject to the counter-notice."
On 17 May 1999 the acquiring authority entered onto that part of the Property specified in the original notices to treat. Mr and Mrs Christos continued to occupy the house on the remaining part of the Property. 17 May 1999 is a crucial date in these proceedings because, as recorded in the Tribunal's decision, it was the agreed valuation date. Although there is no written record of the terms of the agreement reached between the representatives of the parties, it was not disputed on the appeal that the tribunal accurately referred to the agreement to the following terms (paragraph 61)-
"Whilst possession of the subject property was taken on two different dates it was clearly appropriate to value the property as a single entity at a single date. The parties had agreed that that single date should be 17 May 1999, the date when the acquiring authority entered the first part of the land. The acquiring authority accepted that the property should be valued at prices prevailing at that date, but they did not accept that the condition of the entire property should be taken as at that date."
On 10 June 1999 Mr Houghton wrote to Mr Bowman confirming that he had been instructed by Mr and Mrs Christos
"…to accept the offer made by you in your letter dated 12 March 1999 to purchase the whole of their property as shown on the plan attached to that letter in the sum of £500,000 (Five Hundred Thousand Pounds) together with the usual heads of claim for disturbance and fees"
In the following months "subject to contract" correspondence took place between Mr Houghton and the solicitors acting for the acquiring authority, Cripps Harries Hall. It should be noted that the acquiring authority had already obtained a valuation of the Property for compensation purposes from Knight Frank. They had inspected the Property on 14 April 1999. In their opinion the open market value of the Property freehold with vacant possession as at the date of inspection could be fairly represented in the sum of £350,000.
On 15 October 1999 Mr Christos wrote personally to Mr Bowman about the difficulties that he was having in dealing with Bruton Knowles (the acquiring authority's valuers) and in arranging a meeting to discuss aspects of his case. He said
"…it would seem that they are trying to renege and renegotiate on the original agreed purchase of my house of £500,000.
At this stage I feel this is totally unethical and unfair to put us through still further Torment."
Mr Bowman replied by letter on 26 October 1999 saying
"I have discussed your letter with Colin Smith of Bruton Knowles in view of the serious allegations that you are making.
I am advised by Mr Smith that he has not been aware of requests for a meeting until recently and this has now been set up with yourself and your valuer for the 2nd November.
I would confirm that Bruton Knowles have no instructions to renege and re-negotiate the original agreed price of your house at £500,000 and I do not know what has given rise to this particular concern
I would suggest that following your meeting on 2nd November, I receive a full report from Colin Smith on the situation and if necessary you and I can meet to review any outstanding issues.
I do appreciate the fact that living adjacent to a major construction site will be noisy and disruptive which is the reason we agreed to purchase the whole property from you at the outset."
On 2 November 1999 a meeting took place. It was attend by Mr Colin Smith of Bruton Knowles, Mr Neil Altman (the surveyor acting for Mr and Mrs Christos), and Mr and Mrs Christos and their solicitor, Mr Houghton. One of the matters discussed at the meeting was the decision of the Land Registry of 25 October 1999 to cancel the application of Mr and Mrs Christos for first registration of the Blue Land based on adverse possession. Mr Smith advised Mr and Mrs Christos that the acquiring authority wished to amend the price payable for the Property to reflect the title defect and would...
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...is that the matter remains in negotiation until a formal contract is executed.” 14 In Secretary of State for Transport v Christos [2003] EWCA Civ 1073, [2004] 1 P & CR 17 Mummery LJ said at [34]: “As everybody, including Mr Christos himself, knows, that expression, when used in relation to......