Saunders v Caerphilly County Borough Council

A claim to have compulsory-purchase compensation assessed by the Lands Tribunal is an action to recover a sum recoverable by virtue of an enactment. The six-year limitation period in section 9 of the Limitation Act 1980 therefore applies, even where compensation has not yet been agreed or quantified.

An acquiring authority may nevertheless be prevented from relying on limitation where its communications and conduct make it unconscionable to do so. Continuing negotiations, coupled with an assurance that disputed matters would be referred to the Tribunal and that proceedings would serve no useful purpose, can justify that conclusion.

The claimant’s land was entered and used for a relief road under compulsory-purchase powers in 1991. Compensation for the acquired strip and for severance, disturbance and injurious affection remained unresolved more than 23 years later.

A reference to the Lands Tribunal made in time was withdrawn after the parties believed they had reached a settlement. The settlement was not concluded, but negotiations continued. The claimant sought an order requiring reference of the compensation claim to the Tribunal and an injunction restraining use of the road. The authority relied on limitation and challenged the injunction.

The preliminary issues were whether section 9 of the Limitation Act 1980 applied, whether the authority was barred from relying on it, and whether the injunction claim disclosed reasonable grounds.

1. Section 9 of the Limitation Act 1980 applied. Following Hillingdon LBC v ARC Ltd (No 1) [1999] ChD 139 CA, the right to compensation arose on entry. Although the amount required assessment by the Lands Tribunal, the claim was in substance an action to recover money. The wide language of section 9 embraced the claim as formulated.

2. The authority was nevertheless debarred from relying on limitation. Its invitation to withdraw the earlier Tribunal reference communicated that the time limit would effectively run from the supposed settlement. Its 2008 communication stated that unresolved matters would be referred to the Tribunal and advised that commencing proceedings would serve no useful purpose. Negotiations continued on that basis until the limitation defence was raised in 2012. In all the circumstances, it would be unconscionable for the authority to rely on limitation.

3. The alternative argument based on acknowledgment under section 29(5) of the Limitation Act 1980 was left undecided. The court noted the difficulty, identified in BP Oil UK Ltd v Kent County Council [2003] 3 EGLR 1, of treating compensation not yet determined by the Tribunal as a liquidated claim.

4. The injunction issue did not require determination because the authority undertook to refer the compensation claim to the Tribunal as soon as practicable, having regard to ADR. If determination had been necessary, the claim would have been struck out under rule 3.4(2)(a) of the Civil Procedure Rules 1998, since section 263(1) of the Highways Act 1980 vested the road surface in the authority as highway authority.