A Grantor v A Grantee

The Upper Tribunal may award costs when acting as arbitrator in a reference by consent under section 1(5) of the Lands Tribunal Act 1949. Rule 10(6)(b) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 covers proceedings for injurious affection of land broadly. The expression is not confined to claims arising directly from the exercise of statutory powers, and may include damage resulting from contractual rights where compensation is assessed by reference to compulsory acquisition principles. By contrast, section 61 of the Arbitration Act 1996 does not apply to such references. Rules 3(2) and 30 disapply Part I of that Act except for the provisions expressly specified in rule 30.

The claimant sought compensation under a deed granting easements for a pipeline. The deed prevented development within the easement strip and provided for compensation assessed by reference to the amount payable on a compulsory acquisition. The parties referred the assessment of compensation to the Upper Tribunal under the deed’s arbitration clause.

A preliminary costs order had been made, subject to determination of whether the Tribunal had jurisdiction to award costs. The central issues were whether the proceedings fell within rule 10(6) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, and whether the Tribunal could award costs under section 61 of the Arbitration Act 1996.

1. The Tribunal had power to award costs under rule 10(6)(b) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. The claim was pleaded as compensation for injurious affection of retained land under section 7 of the Compulsory Purchase Act 1965.

2. “Injurious affection” had a broad meaning. It was not confined to damage arising from the exercise of statutory powers or to compensation claims under a particular statute. It was wide enough to include damage resulting from the exercise of contractual rights, particularly where the parties had agreed that compensation would be assessed as if the rights had been compulsorily acquired.

3. The preparatory reports of the Costs Review Group and Tribunal Procedure Committee were admissible aids to interpreting rule 10. They showed no intention to remove the existing costs power in references by consent or to create a distinction based on whether compulsory acquisition had actually been authorised.

4. Rule 10(6)(a) did not require the Tribunal to adopt the narrow construction advanced by the respondent. Rule 28 concerned the documents and timing required for a reference and was not a reliable guide to the scope of rule 10(6). The decision in Leech Homes v Northumberland County Council was distinguishable because it concerned appeals under section 18 of the Land Compensation Act 1961, not references by consent.

5. The Tribunal could not award costs under section 61 of the Arbitration Act 1996. Rule 3(2) stated the general rule that Part I of that Act did not apply to Tribunal proceedings. Rule 30 created only specified exceptions. Section 61 was not among them. The same conclusion applied under the former Lands Tribunal rules, as confirmed by the reasoning in Goldstein v Conley.

6. The Tribunal therefore had power to award costs under rule 10(6)(b), but not under section 61 of the Arbitration Act 1996.