Lands Tribunal for Scotland

OPINION

Rellios Ltd and Another
v
Glasgow City Council

These applications arise from the compulsory acquisition by the City of Glasgow District Council of tenement flats in Kennoway Drive in Glasgow. Of the 22 flats acquired, 16 made up the whole tenements at numbers 5 and 7. These were owned by Rellios Limited. One flat at number 9 and 5 flats at number 22 were owned by Searidge Properties Limited. These two companies are the claimants in the present proceedings. The respondents are now Glasgow City Council as the statutory successors to the district council.

The properties were acquired by the district council following the making of a compulsory purchase order which was confirmed by the Secretary of State for Scotland on 12 May 1989. In implement of the order the council on 7 August 1989 made a general vesting declaration in which they gave notice that the properties would vest in them on 7 September 1989. On that date they entered into possession.

It is averred by the council that the properties were then in a serious state of disrepair and were of only nominal value, and that the claimants' agents accepted that no compensation was due. Subsequently, however, the claimants decided to press their claims and to refer the matter to the tribunal.

In each case the council have stated a plea that the application is time-barred, and there has been a preliminary proof on that question.

Paragraph 36(1) of Schedule 24 to the Town and Country Planning (Scotland) Act 1972 provides:

“The time within which a question of disputed compensation, arising out of an acquisition of an interest in land in respect of which a notice to treat is deemed to have been served by virtue of paragraphs 6 to 8 above, may be referred to the Lands Tribunal shall be six years from the date at which the person claiming compensation … first knew, or could reasonably be expected to have known, of the vesting of the interest by virtue of those paragraphs.”

By paragraph 6 of the Schedule it is provided that at the end of the period specified in a general vesting declaration a notice to treat is deemed to have been served on the date on which the general vesting declaration was made, and by paragraph 7 it is provided that at the end of the same period the land specified in the declaration, together with the right to enter upon and take possession of it, shall vest in the acquiring authority.

The references by the claimants to the tribunal were received on 5 September 1995. If the date from which the six years runs cannot be before the date of vesting, the references were within the time allowed. On behalf of the council, however, it was submitted that the six years must run from the date of service of the notices of the general vesting declaration, since it was then that the claimants first knew, or could reasonably be expected to have known, of the vesting of their respective interests in the properties. It is averred that the date of service should be taken to be 8 August 1989, and that any claim for compensation would therefore require to have been lodged with the tribunal no later than 8 August 1995.

On behalf of the claimants it was submitted that, even if 8 August 1989 were capable of being the operate date, whether it was so in a particular case would depend on whether there had been effective service of the notices of the general vesting declaration, so that they had actual knowledge of it at that time. That, it was submitted, had not been proved, and it had not been proved that they knew of it, or could reasonably be expected to have known of it, at any time before the vesting date.

Under the general vesting procedure the notice which is given of the making of a general vesting declaration specifies the date on which the land will vet in the acquiring authority. Assuming the notice is received by the owners, they will then know when vesting is to take place. On behalf of the council it was submitted that, if it had not been intended that the six years should run from the date of service of the notice, the provision in paragraph 36(1) could easily have been worded in such a way as to make that clear. It did not provide that the six-year period should run from the date of vesting, because it was designed to give protection to those who, for whatever reason, might at that time be unaware of the vesting of their interest. That was why the period was tied to knowledge of that even. But it was possible to have foreknowledge of an event, and once an acquiring authority had informed an owner of the date of vesting, that fixed the date for the purposes of paragraph 36(1).

In the tribunal's opinion, that argument is not sound. The apparent reason why the provision is worded as it is only so that it will cover the situation where the owner does not learn until after the vesting date that his property has been compulsorily acquired. It does not follow that it is also designed to apply where he knows in advance when it is intended that that should happen. The whereabouts, and even the identity, of the owner may be unknown, so that at the time he does not know of the making of a compulsory purchase order or a general vesting declaration, but only learns of them later. Furthermore, it is not always that a property will vest on the date of which notice is given by the general vesting declaration. If the circumstances are such that the owner can serve on the acquiring authority a notice of objection to severance in terms of paragraph 20 of the Schedule, then, in terms of paragraph 21, the land will not vet in the acquiring authority until the notice has been disposed of in one of a number of ways. That can take a considerable time.

On behalf of the claimants it was submitted that, for all that was known, a notice of objection to severance might have been served in this case, since the council had not proved that that did not happen. However, the council are not obliged to disprove all possible hypothetical events where there is no reason to suppose that they ever happened. On the claimants' own averments there can have been no question of the date of vesting being delayed by the serving of such a notice, since the claimants admit that the date of vesting specified in the general vesting declaration was 7 September 1989 and that it was upon that date that the council entered upon possession of the properties.

In Apostolic Church Trustees v Glasgow District Council (No. 2), 1978 SLT (Lands Tr), 17, the tribunal stated, t page 24: “Knowledge of vesting, in our view, involves two elements: (a) that such vesting has actually occurred … and (b) that the claimants knew or could reasonably be expected to know at the time, or retrospectively, that such vesting had occurred. They could not know this in advance.” That statement has to be looked at in the light of the fact that the property there had been acquired under the expedited completion procedure, whereby it vested in the acquiring authority on the recording of a notice of title. Although under that procedure the acquiring authority had to give notice that at the expiration of a certain period they would enter on and take possession of the subjects and would expede a notice of title, the land did not vest in them until that notice of title was recorded in the Register of Sasines. The owner of the land could not therefore know in advance when vesting would occur. The time-bar provision, which was in similar terms to that now under consideration, could not therefore begin to operate until the date of vesting. Nevertheless, while under that procedure the knowledge which was the second of the two elements which the tribunal considered to be essential could not be present until vesting had occurred, there is no reason to suppose that, if the tribunal had been considering a case under the general vesting procedure, it would have taken a different view from that expressed in the first part of the statement, that one of the elements involved in knowledge of vesting is that such vesting has actually occurred.

In Royal Bank of Scotland plc v Clydebank District Council, 1992 SLT, 356, the property had been acquired by means of a general vesting declaration dated 2 August 1976. In the opinion of Lord McCluskey, at page 362, it is narrated that no claim for compensation was made by the former owners until 1988, some 12 years “after the end of the period specified in the general vesting declaration.” The end of that period would, of course, be the date of vesting. That in itself suggests that Lord McCluskey took the view that that was the relevant date for the commencement of the period within which any claim could be referred to the tribunal. His Lordship then goes on to refer to the relevant date for the beginning of that period as 10 September 1976, and narrates that the former owners of the property “now accept that any right they may have had or been entitled to to seek compensation as determined by the Lands Tribunal was lost in September 1982.” Later in his opinion, at page 364, Lord McCluskey states: “Part of [the] statutory framework is that any reference to the Lands Tribunal to determine a question of disputed compensation must be made within six years from the date of vesting.” Subsequently there is a further statement about an owner of property seeking a reference to the tribunal “within six years from the vesting date.”

It was suggested on behalf of the council that those latter statements must have been the result of mistakes on someone's part, perhaps even of errors in transcription, since the court had already accepted that the six years ran from the time when the owners became aware of the vesting of the subjects: see per the Lord Justice-Clerk (Ross) at pages 358 and 361. The various statements are not, however, inconsistent if 10 September 1976 was the date of vesting, and if the court took the view that that was therefore the earliest date on which the owners could know that the property had vested. There is no reason to suppose that anything happened on that date to make the owners aware of something of which they had not previously been aware, such as the acquiring authority then entering into possession. Indeed, the owners were not dispossessed until more than five years thereafter. It can reasonably be inferred, therefore, that the owners knew that 10 September 1976 was the date when vesting would take place because it was the date specified in the general vesting declaration of which they had received notice. Such a date of vesting would be entirely consistent with a general vesting declaration made on 2 August, since an acquiring authority which is in no hurry to enter into possession need not restrict itself to giving the statutory minimum of 28 days notice. There is no statutory maximum.

It may be that, if the facts of the case had made it necessary, Lord McCluskey might have referred in one of the passages quoted to “six years from the date of vesting or from such later date as the owners of the land first knew, or could reasonably be expected to have known, of the vesting”. However, there would be no question of its being a later date if it was common ground that the owners knew in advance on what date the property was going to vest and if it did vest on that date. If that was so, the fact that Lord McCluskey nevertheless regarded the date of vesting as the relevant date suggests that he took the view that it could not be before that date even if it was known beforehand when that was going to be.

A further argument which was advanced on behalf of the council was that, in setting a time limit for the referring of claims to the tribunal, Parliament had specified six years and not six years and 28 days, as it would be if the period were taken to run from the date of vesting and if the owner of the land had received the statutory minimum of 28 days notice. On the other side, it was submitted that, if the period were taken from the date of notification, then, since a reference to the tribunal could not be made until the vesting date, a claimant could never have a full six years within which to refer his claim. Indeed, an acquiring authority might notify him of a vesting date so far in the future that he would be deprived of most, or indeed all, of the six years which Parliament intended.

While that extreme situation might seem purely hypothetical, and indeed fanciful, it could certainly be the case that the six years would in practice be greatly reduced if the vesting date which was notified was far in the future. It is unlikely that such a result was intended. On the other hand, there is no reason why it should have been a matter of concern that, if the period were taken from the date of vesting, an owner who had been duly notified of the making of the general vesting declaration would have six years and 28 days, and perhaps much longer, in which to refer his claim.

For those reasons the tribunal is satisfied that the date of vesting is the earliest time from which the six years can be taken to have run. The references to the tribunal were accordingly timeous.

That being so, the decision does not turn on whether it has been proved that there was effective service on the claimants of the notices of the general vesting declaration. That is not admitted, and it was submitted that it had not been proved.

By paragraph 4 of Schedule 24 to the Act it is provided that: “as soon as may be after executing a general vesting declaration, the acquiring authority shall serve - (a) on every occupier of any of the land specified in the declaration … a notice in the prescribed form specifying the land and stating the effect of the declaration.” Paragraph 5 then provides: “For the purposes of this Schedule, a certificate by the acquiring authority that the service of notices required by paragraph 4 above was completed on a date specified in the certificate shall be conclusive evidence of the fact so stated.”

The way in which notices may be served is dealt with in section 269 of the Act, which provides:

“(1) Subject to the provisions of this section, any notice or other document required or authorised to be served or given under this Act may be served or given either -

(a) by delivering it to the person on whom it is to be served or to whom it is to be given; or

(b) by leaving it at the usual or last known place of abode of that person, or, in a case where an address for service has been given by that person, at that address; or

(c) by sending it in a prepaid registered letter, or by the recorded delivery service, addressed to that person at his usual or last known place of abode, or, in a case where an address for service has been given by that person, at that address; or

(e) in the case of an incorporated company or body, by delivering it to the secretary or clerk of the company or body at their registered or principal office, or sending it in a prepaid registered letter, or by the recorded delivery service, addressed to the secretary of clerk of the company or body at that office.”

The position, as established by the evidence, was that on 7 August 1989 notices of the general vesting declaration were served by first-class recorded delivery post on Messrs Macdonalds, Solicitors, at 1 Claremont Terrace, Glasgow. A separate notice was served in respect of each company, each notice being addressed to the company concerned “per Messrs Macdonalds”. Certificates to that effect in accordance with the provision in paragraph 5 of Schedule 24 have been produced and were not challenged. Service was effected on Macdonalds as the known agents of the claimants. It is admitted that they were such agents, and that they had been instructed by the claimants to correspond with and to negotiate with the acquiring authority in relation to their interests in the compulsory acquisition of the properties. In the case of Rellios Limited it is also admitted that that company's registered office was at Macdonalds' offices. In the letters to Macdonalds each address contained in brackets the letters “JCK/NP” to identify the partner who was acting on behalf of the claimants in relation to this matter.

That partner was Mr J C Kidd. He is not now associated with Macdonalds, which he left almost seven years ago. However, his evidence confirmed that in 1987, 1988 and 1989 he was the partner who acted for the two companies and who was involved in the negotiations which preceded the compulsory acquisition of their properties. Although he had no recollection of having seen the notices of vesting, he accepted that they should have come to him. If they did, his normal procedure would have been to pass copies to his clients and to ask for their instructions. He could not remember doing so in this particular case, nor what, if any, response he got from either company. However, Mr J G Boyle, the official who was dealing with the matter for the district council, stated that they did not in fact get any response to the notices from Macdonalds.

In these circumstances it was submitted that the council had failed to prove knowledge of the vesting on the part of the claimants. It was not enough to prove receipt of the notices by the agents, since they might never have told their clients. It was not a case, it was argued, of the solicitors being part of the machinery of service. That could only be so either if their address had been given by the company concerned as an address for service, as provided by paragraph (c) of section 269(1), or, in the case of Rellios, if the service complied with the requirements of paragraph (e). It had not been averred or proved that Macdonalds' office had been given as an address for service in terms of paragraph (c), and in the case of Rellios the service did not comply with the requirements of paragraph (e), in respect that the notice was not addressed to the secretary or clerk of that company at Macdonalds' office. The various methods of service prescribed in the subsection were, it was submitted, not merely permissive. They were mandatory and exhaustive. That was clear from the use of the word “or” between each of the methods prescribed. That meant that to be effective the service had to be in one of those ways: see Hammersmith London Borough Council v Winner Investments Ltd, 1968, 20 P & CR, 971, at pages 980-81. Accordingly, it was argued, there had been no effective service on either company in the manner required by the Act.

The tribunal accepts that that is so, although it is very much a technicality, particularly in the case of Rellios, whose registered office was Macdonalds' office. Where a private limited company has its registered office at that of its solicitors, but does not carry on business at that address, it will not normally have any of its own staff there. Admittedly, if service is by addressing a letter to the secretary or clerk of the company at that office, it can reasonably be assumed that whatever is served will be passed on to a responsible official of the company, but that can equally well be assumed where something is addressed as it was here. If the tribunal should be wrong in holding that the six-year period cannot run from a date before the date of vesting, what would then have to be decided would be, not whether the method of service of the notices of vesting was in accordance with the provisions of section 269(1), but whether the claimants first knew, or could reasonably be expected to have known, of the vesting date at a time more than six years before 5 September 1995, when the references were received by the tribunal.

In the tribunal's opinion, it should be held that the claimants could reasonably be expected to have known of it more than six years before that date. There is a high degree of probability that Macdonalds intimated the receipt of the notices to their clients. It would be very odd if they did not. The claimants would then have what was called constructive knowledge of the fact that vesting was to take place on 7 September 1989. It is not, however, the case that they could be deemed to have such knowledge because of the reference in paragraph 36(1) of the Schedule to “land in respect of which a notice to treat is deemed to have been served by virtue of paragraphs 6 to 8” of the Schedule. That is a reference in particular to the provision in paragraph 6. The effect of that provision is to apply to the general vesting procedure the statutory provisions regarding compensation which apply in cases in which a notice to treat is served. It does not have the effect that a person can be deemed to have knowledge of the vesting which he might not in fact possess.

In any event, since the tribunal is satisfied that these references were timeous, a proof will be allowed on the amount of the claims.

With regard to expenses, it was not in dispute that the expenses of the preliminary proof should follow success. It was submitted that, if the claimants should be successful, those expenses should include the expenses of adjustment, since that had been made necessary only by the plea of time-bar. In the tribunal's opinion, however, the inclusion of those expenses has not been shown to be justified.