94 COMPULSORY PURCHASE 70 P. & c.R.

TAYLOR & TAYLOR v. NORTH WEST WATER LANDS TRIBUNAL (Reference No. 58/1993) (H.H. Judge O'Donoghue, sitting as a member of the Lands Tribunal and Mr P.H. Clarke, FRICS): November 29, 1994 and January 31, 1995 Compulsory purchase-Compensation-Damage caused while laying sewer­ Whether laying of sewer compulsory acquisition of land-Whether tribunal had jurisdiction and power to award interest on agreed compensation

The claimants, whose land had been damaged by the laying of a sewer and who had been awarded compensation under section 278 of the , claimed interest on that compensation. The jurisdiction of the Tribunal to determine the dispute as to whether interest was payable and if so whether it had power to award interest was challenged. The claimants contended, relying on Taylor v. Oldham Corp. and Thurruck Grays and Tilbury Joint Sewerage Board v. Thames Land Co., that the construction of the sewer amounted to a compulsory acquisition of land, bringing the assessment of compensation within the Land Compensation Act 1961 (which replaced the Acquisition of Land (Assessment of Compensation) Act 1919) and that therefore the Tribunal had jurisdiction. Provision was made in the Public Health Act 1936 for disputes as to compensation to be referred to an arbitrator "except where otherwise provided" and the 1961 Act did so provide. The respondents, relying on Newcastle-under-Lyme Corp. v. Wolstanton and St John's College, Oxford v. Authority maintained that Taylor and Thurrock were wrongly decided and contended that the power to lay a sewer and the liability to pay compensation for damage caused in so doing did not involve the acquisition of land or of any right in that land, and that disputed compensation must be determined by arbitration as provided under the 1936 Act so that this Tribunal had no jurisdiction. Held, that a distinction was to be drawn between the exercise of a power to lay a sewer and the subsequent rights acquired when the sewer was laid and that at that time the absolute property in the whole of the space occupied by the sewer vested in the respondents amounting to an acquisition of land rendered compulsory by reason of the Public Health Act 1936, s.15, which gave power to provide sewers after giving reasonable notice: Taylor and Thurrock followed, Newcastle and St John's College distinguished; that since the effect of the Lands Tribunal Act 1949 and of the Land Compensation Act 1961 was to confer on the Lands Tribunal jurisdiction over disputes as to the amount of compensation payable on the compulsory purchase of land and in particular the jurisdiction formerly exercised by the panel of official arbitrators appointed under the 1919 Act the Tribunal had jurisdiction to determine the question of disputed compensation in this case. However, if the Tribunal were wrong to hold that there had been a compulsory acquisition of the stratum of land containing the sewer it would find in the alternative that the respondent had obtained an "interest or right in or over land" such as to bring it within the definition of "land" in the Land Compensation Act 1961, s.39, so that the Tribunal would still have jurisdiction. Further the. Tribunal held that it had a statutory power to award interest on the agreed compensation as the essential requirements for the payment of interest were present, namely the compulsory acquisition of an interest in land and entry before the payment of compensation (see Land Compensation Act 1961, s.32 and Compulsory Purchase Act 1965, s.ll) and that the claimants could bring a reference before the Tribunal solely to determine that disputed interest. The absence of a notice to treat was not fatal to the claimants' case, as the service of a notice did not L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 95 form part of the procedure under the Public Health Act 1936. s.15 (power to provide sewers). Cases referred to: (1) Birkenhead Corp. v. London and North Western Railway Co. (1885) 15 Q.B.D. 572; 55 L.J.Q.B. 48; 50 J.P. 84, C.A (2) Bradford v. Eastbourne Corp. [1896] 2 Q.B. 205; 60 J.P. 50l. (3) Burlin v. Manchester City Council (1976) 32 P. & c.R. 115, L.T. (4) Edmunds v. Lloyds Italico [1986]1 W.L.R. 492; (1986)130 S.J. 242; [1986]2 All E.R. 249; [1986]1 Lloyd's Rep. 326; (1986) 83 L.S.Gaz. 876, C.A (5) Fletcher v. Birkenhead Corp. [1907]1 K.B. 205. (6) Hobbs (Quarries) v. Somerset County Council (1975) 30 P. & c.R. 286, L.T. (7) Knibb v. National Coal Board [1987] Q.B. 906; [1986]3 W.L.R. 895; [1986]3 All E.R. 644; (1986) 52 P. & c.R. 354, C.A (8) London, Chatham and Dover Railway v. South Eastern Railway [1893] AC. 429, H.L. (9) Newcastle-under-Lyme Corp. v. Wolstanton [1947]1 Ch. 427; [1947]1 All E.R. 218, C.A; reversing [1947] Ch. 92. (10) Normanton Gas Co. v. Pope & Pearson (1883) 52 L.J. (Q.B.) 629. (11) Pattinson v. Finningley (1971) 22 P. & c.R. 929, L.T. (12) Pemsel & Wilson v. Tucker [1907]2 Ch. 191. (13) Port of London Authority v. Canvey Island Commissioners [1932]1 Ch. 446, C.A (14t President of India v. La Pintada Compania Navigacion S.A. [1985] A.C. 104; [1984 3 W.L.R. 10; [1984]2 All E.R. 773, H.L. . (15 President of India v. Lips Maritime Corp. [1988] AC. 395; [1987] 3 W.L.R. 572; [1987]3 All E.R. 110, H.L. (16) Quartons (Gardens) v. Scarborough Rural District Council (1955) 5 P. & c.R. 190, L.T. (17) St John's College, Oxford v. Thames Water Authority [1990]1 E.G.L.R. 229, L.T. (18) Taylor v. Oldham Corp. (1876) 4 Ch.D.395. (19) Thurrock Grays and Tilbury Joint Sewerage Board v. Thames Land Co. (1925) 90 J.P. 1. (20) Tithe Redemption Commissioners v. Runcorn Urban District Council [1954] Ch. 383; [1954] 2 W.L.R. 518; [1954]1 All E.R. 653, C.A. (21) Williams v. Secretary of State for the Environment (1976) 33 P. & c.R. 131, L.T. (22) Ystradyfodwg & Pontypridd Main Sewerage Board v. Benstead (Surveyor of Taxes) [1907] AC. 264, H.L.

Reference to determine whether interest was payable by North West Water on agreed compensation consequent on damage caused to land at No. 1, Ornamental Cottages, Belmont, Bolton, owned by the claimants, Arthur Allen Taylor and Nancy Josephine Taylor. Two issues arising as preliminary points of law for decision were whether the Tribunal had jurisdiction to determine a dispute as to the payment of interest on agreed compensation and whether it had power to award interest on the agreed compensation.

Stephen Sauvain for the claimants. Vincent Fraser for the respondents.

Decision. This is a reference to determine whether interest is payable on agreed compensation consequent on the laying of a sewer in the claimants' land. 96 COMPULSORY PURCHASE 70 P. & c.R. Stephen J. Sauvain of counsel appeared for the claimants; Vincent Fraser of counsel appeared for the respondents. The following facts are agreed: (1) On March 28,1985 the respondents, through their agents Blackburn Borough Council, gave notice to the claimants under section 15 of the Public Health Act 1936 ("the 1936 Act") of their intention to construct the Belmont Sewer through the claimants' land at 1 Ornamental Cottages, Belmont, Bolton. (2) At a date in 1985 (the respondents say July 11) the respondents, through their agents, entered on the 'claimants' land for the purpose of constructing the above sewer. (3) Damage to the claimants' land was sustained by the exercise by the respondents of their powers under section 15 of the 1936 Act and two claims were made. The first was brought in the High Court for negligence. This has been settled. The second was for compensation under section 278 of the 1936 Act and has been agreed in the capital sum of £4,400, but without prejUdice to the claimants' right to pursue further proceedings for interest on this compensation. (4) The parties have been unable to agree the payment of interest and the claimants referred this dispute to this Tribunal on March 19, 1993 seeking determinations as to whether interest is payable on the compensation of £4,400 paid to the claimants and as to the quantum of such interest. (5) On May 28, 1993 notice of application was made for the hearing of a preliminary point of law questioning the jurisdiction of the Lands Tribunal in this matter. (6) On November 3,1993 it was ordered by the registrar that the matters referred should be dealt with as preliminary points of law under rule 49(1) of the Lands Tribunal Rules 1975. There are two issues for our decision. The first is whether the Lands Tribunal has jurisdiction to determine this reference, that is to say whether a dispute as to the payment of interest on agreed compensation between an authority which has laid a sewer in private land under section 15 of the 1936 Act and the owner can be determined by this Tribunal? The second issue is, if the Lands Tribunal has jurisdiction to determine this reference, whether it has power to award interest on the agreed compensation? These issues, although stated to be preliminary points of law, form the substantive dispute between the parties and this decision disposes of this reference, other than as to costs.

First Issue of Law We deal now with the first issue, namely whether we have jurisdiction to determine this reference.

Claimants' Case Mr Sauvain submitted that the constructiop. of a sewer by the respondents in the claimants' land constituted a compulsory acquisition of land, or of an interest or right in land, and therefore the Lands Tribunal has jurisdiction. He said that section 15 of the 1936 Act empowered a sewerage authority to construct a sewer in private land and section 278 required the payment of "full compensation". Disputes as to the amount of such compensation were L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 97 to be determined by a single arbitrator (s.303). When an authority exercised its powers under section 15 it acquired more than a mere right to cause damage-it acquired by compulsion a right or interest in the land. Mr Sauvain referred to Thurrock Grays and Tilbury Joint Sewerage Board v. Thames Land Co. Ltd,l where it was held, following the earlier decision in Taylor v. Oldham Corp. ,2 that the exercise of powers to lay a sewer under the ("the 1875 Act") operated as a compulsory acquisition of land and brought the assessment of compensation within the Acquisition of Land (Assessment of Compensation) Act 1919 ("the 1919 Act"). The 1875 Act was the precursor of the 1936 Act and the 1919 Act was the precursor of the Land Compensation Act 1961 ("the 1961 Act"). Thus, said Mr Sauvain, by virtue of section 1 of the 1961 Act, the exercise by the respondents of their power to lay a sewer in the claimants' land operated as the acquisition of an interest in, or a right in or over, land and therefore the arbitration under the 1936 Act takes place by a reference to this Tribunal. He said that this contention is reinforced by the Lands Tribunal Act 1949 ("the 1949 Act"), section 1(3) of which transfers to this Tribunal questions previously determined by official arbitrators under the 1919 Act, including disputed compensation on compulsory purchase. Mr Sauvain submitted further that, although the 1936 Act refers to arbitration, section 303 contains the proviso "except where otherwise expressly provided" and the 1919 Act and now the 1949 and 1961 Acts do so expressly provide for a different tribunal. Section 1 of the 1961 Act re-enacted provisions in the 1919 Act in force when the 1936 Act was passed and the latter did not exclude the provisions of the 1919 Act as interpreted by Thurrock, as it could have done. Mr Sauvain said that there have been several references to the Lands Tribunal under the 1936 Act, e.g. Quartons (Gardens) Ltd v. Scarborough Rural District CounciC In reply to a submission by Mr Fraser for the respondents, that section 278 of the 1936 Act refers only to damage, Mr Sauvain makes three points. First, that the nature of the interest acquired by sewerage authorities and the provisions for compensation remained the same under the 1875 and 1936 Acts. If Thurrock was good law under the 1875 Act it remained so under the 1936 Act. Secondly, section 1 of the 1961 Act requires any question of disputed compensation on the compulsory purchase of the land to be referred to the Lands Tribunal and the compensation in this reference ("the damage") relates to the depreciation in the value of land. Thirdly, compensation for the compulsory acquisition of land includes elements which would be found in damages in tort were it not for the authorising statutory powers. The claimants' case relies heavily on the decision in Thurrock but Mr Sauvain submits that it has not been overruled and is accepted as good law in numerous text-books. Furthermore, he said that, although Thurrock was a decision on the 1875 Act, the provisions of that Act were not materially changed when they were re-enacted in the 1936 Act. In particular, the nature of the "interest" which a sewerage authority acquires was not altered by the 1936 Act. It was open to Parliament to overrule the decision in Thurrock but it did not do so.

1(1925) 90 J.P. 1. 2 (1876) 4 Ch.D. 395. 3 (1955) 5 P. & c.R. 190. 98 COMPULSORY PURCHASE 70 P. & c.R. Mr Sauvain referred to section 20 of the 1936 Act and said that another approach to the right of an authority in a sewer is to regard it as analogous to that of a highway authority in the top two spits of a highway maintainable at public expense. He referred to Bradford v. Eastbourne Corp. 4 Mr Sauvain criticised the reliance by the respondents on Newcastle-under­ Lyme Corp. v. Wolstanton Ltd,5 an action in respect of damage to gas pipes laid in land. He made four points. First, that the Newcastle decision did not deal with sewers and was not concerned with the question whether the operation of section 15 of the 1936 Act involved the acquisition of a right over land. Secondly, the earlier decisions in Taylor6 and Thurroce were not cited or referred to in the judgments. Thirdly, the Newcastle decision was principally concerned with the right of support for gas pipes laid in land. Fourthly, and alternatively, Newcastle appears to decide that the plaintiffs acquired an exclusive right to occupy the cavity in the ground which is entirely filled by their pipes.8 This must be a right over land for the purposes of the 1961 Act. Mr Sauvain also criticised the reliance by the respondents on part of the decision of the President of the Lands Tribunal in St John's College, Oxford v. Thames Water Authority,9 a reference to determine the compensation payable for the laying of a water main. He said that the question of the ownership and rights in the water main does not appear to have been argued and no authorities were cited. The President, in referring to powers rather than rights, was directing himself to the nature of the enabling power rather than to the consequences of the exercise of that power. Respondents' Case Mr Fraser submitted that the Lands Tribunal has no jurisdiction to determine this reference. The respondents' sewer was laid under section 15 of the 1936 Act and section 278 provides for the payment of "full compensation". This is for "damage" sustained, not for rights acquired, still less for the compulsory acquisition of land. Disputed compensation is to be determined by arbitration and the Lands Tribunal has no jurisdiction. This Tribunal was established and given jurisdiction by the 1949 Act and this does not include the determination of compensation under the 1936 Act. Mr Fraser said that the claimants' argument that the Lands Tribunal has jurisdiction in this dispute rests on section 1 of the 1961 Act. This provides for the reference to the Tribunal of disputed compensation arising out of the compulsory acquisition of "land". But, said Mr Fraser, the laying of a sewer under the 1936 Act is not a compulsory acquisition of land. The claimants' contention relies on the definition of "land" in section 39(1) of the 1961 Act. Their argument is that the laying of the sewer under section 15 is an acquisition of "land". Section 1 of the 1961 Act therefore applies and gives the Lands Tribunal jurisdiction. However, said Mr Fraser, section 15 of the 1936 Act gives the power to lay a sewer with consequent liability to pay compensation for damage: this does not involve the acquisition of land.

4 [1896] 2 O.B. 205, 211. 5 [1947]1 Ch. 427, 457. 6 (1876) 4 Ch.D. 395. 7 (1925) 90 J.P. 1. 8 [1947]1 Ch. 427, 457. 9 [1990]1 E.G.L.R. 229. L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 99 Mr Fraser submitted that TaylorlO and Thurrock!! were wrongly decided. They were both first instance decisions, of venerable age, and are not authorities for the propositions advanced by the claimants. They are no longer good law in the light of the later decision in Newcastle.!2 Mr Fraser said that it is important to observe the issue in Thurrock. The first was not whether an interest in land was acquired by the board by the laying of their sewer, but how it was acquired, whether by agreement or compulsorily. The second issue concerned the terms of the agreement for the laying of the sewer. It is clear that the judge in Thurrock was not asked to decide whether an interest was acquired by the laying of the sewer. This was accepted by the parties. The issue was how the interest was acquired. Mr Fraser said that the land company were wrong to accept that the laying of the sewer was an acquisition of land. In view of this acceptance of a fundamental point the decision was wrong and no reliance should be placed upon it. Mr Fraser referred to the Newcastle!3 decision. This was concerned with the laying of gas pipes under statutory provisions similar to the 1936 Act and is relevant to this reference. He said that an analysis of this decision shows that an authority laying a sewer in land does not acquire any ownership or tenure, any easement or interest analogous to an easement or any exclusive rights of occupation, except to the space filled by the sewer. Mr Fraser also referred to the St John's College!4 decision, where the then President (V.G. Wellings, Q.c.) said that it is common ground and indeed "axiomatic" that when a pipe is laid by a water authority no easement or other equitable right in the land is created or acquired. The enabling legislation gives powers not rights. It does not provide for a consideration to be paid for the exercise of those powers and the only remedy is compensation for damage to the land. The President also said that it may be implicit in the powers that the water main remains in the possession of the authority and that if it were damaged that authority could have an action in common law nuisance (see Newcastle). Mr Fraser said that the Newcastle and St John's College decisions establish that a distinction is to be drawn between the exercise of a power to lay a sewer and the acquisition of any right or interest in the land. When the respondents laid their sewer all they obtained was a power to lay and maintain that sewer. The surrounding land could theoretically be removed. The respondents did not acquire the land or any right or interest in the land. There is no recognisable interest or right at law that could be acquired: none is known to the law or identified by the claimants. Mr Fraser's response to the claimants' criticisms of Newcastle!5 and St John's College!6 was as follows. First, he said that there is no distinction between the legislation in Newcastle and the legislation in this reference. The

10 (1876) 4 Ch.D. 395. 11 (1925) 90 J.P. l. 12 [1947]1 Ch. 427. 13 ibid. 14 [1990]1 E.G.L.R. 229. 15 [1947]1 Ch. 427. 16 [1990]1 E.G.L.R. 229. 100 COMPULSORY PURCHASE 70 P. & c.R. Lands Tribunal in the St John's College case followed Newcastle, but relative to the laying of a water main. Secondly, dealing with Mr Sauvain's contention that Taylorl? and Thurrockl8 were not referred to in the later cases, Mr Fraser said that neither of these cases is authority for the propositions advanced by the claimants, or, in the alternative, if they are, then they were wrongly decided and were not binding on the Court of Appeal in Newcastle. Thirdly, Mr Fraser said that both Newcastle and St John's College emphasise that no right recognisable at law is acquired by the laying of pipes: it is a mere right to occupy the cavity in the ground filled by the pipes. Finally, in answer to the criticism that no authorities were cited in the St John's College decision and that the President was concerned with powers and not rights, Mr Fraser said that it is clear that the President had the Newcastle decision before him and had considered it. The point did not need to be argued, it was "axiomatic". The President's conclusion was that the authority's only interest was in the pipe and its only liability was to pay compensation for any damage. Mr Fraser submitted that, even if it is found that an interest in land is created by the laying of a sewer, this does not invoke the jurisdiction of this Tribunal. This only arises if there is an "acquisition" and that is different from the "creation" of an interest. Prior to the creation of the interest there is no such interest to be acquired. Mr Fraser said that Parliament has now provided for the Lands Tribunal to have jurisdiction over compensation on the laying of sewers under paragraph 3 of Schedule 12 to the . If the claimants' case is correct there would have been no need for such provision. Decision We have experienced some difficulty in reachin~ a decision on the first point of law. In the Bradford decision, Wills J. said 9: The truth is, that the whole of our sanitary legislation is in a state which I hardly like to characterise in the language that naturally suggests itself, and the attempt to extract from the various details of the legislation a set of harmonious principles, always underlying the specific provisions, is, I am afraid, futile. Nearly a century later we share these sentiments. Our difficulty has been to reconcile the legislation on public health and compulsory purchase and the case law. The crucial issue is the nature of the right or interest (if any) acquired by an authority when it lays a sewer in private land. We find it surprising that this question has not yet received a definitive answer, in either statute or case law. We start by examining the statutory provisions. We consider first the Public Health Act 1936 (as amended). Section 15 gives a water authority power to provide sewers: (1) A water authority may, either inside or outside their area­ (i) construct a public sewer (a) [ ... ] (b) in, on or over any land not forming part of a street, after giving reasonable notice to every owner and occupier of that land.

17 (1876) 4 Ch.D. 395. 18 (1925) 90 J.P. 1. 19 [1896]2 Q.B. 205, 216. L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 101 Section 278 of the Act provides for the payment of compensation: (1) Subject to the provisions ofthis section, a local authority shall make full compensation to any person who has sustained damage by reason of the exercise by the authority of any of their powers under this Act in relation to a matter as to which he has not himself been in default. (2) Any dispute arising under this section as to the fact of damage, or as to the amount of compensation, shall be determined by arbitration: [ ... ] Section 303 of the Act provides for the mode of arbitration: In arbitrations under this Act the reference shall, except where otherwise expressly provided, be to a single arbitrator to be appointed by agreement between the parties or, in default of agreement, by the Minister. Section 20 of the Act provides for the vesting of public sewers in the authority: (1) [ ... ] there shall vest in a water authority- (a) all sewers [ ... ] constructed by the water authority at their expense [ ... ]. Thus far the position is clear. The respondents constructed a sewer through the claimants' land under section 15 of the 1936 Act and that sewer vested in them under section 20 of the Act. The respondents have a duty to make full compensation for damage sustained by the claimants, such compensation to be determined by a sole arbitrator. From these provisions alone, therefore, this Tribunal has under section 278 of the Act no jurisdiction to determine a claim for compensation for compulsory acquisition as distinct from damage sustained by reason of the exercise of the power under the Act. Mr Sauvain for the claimants, however, submitted that this is not the full story. He said that it is necessary to look at the compulsory purchase legislation because the decision in Thurrock20 was to the effect that the laying of a sewer constitutes a compulsory purchase of land and that accordingly jurisdiction over disputed compensation has been transferred to this Tribunal. We now examine the relevant provisions of the Lands Tribunal Act 1949 and Land Compensation Act 1961. Section 1 of the 1949 Act provides for the establishment and jurisdiction of the Lands Tribunal: (1) There shall be set up, to exercise the jurisdiction hereafter mentioned in this Act, the following tribunals, namely- (a) [ ... ] (b) a tribunal for the remainder of the to be called "the Lands Tribunal". (2)[ ... ] . (3) There shall be referred to and determined by the Lands Tribunal-

20 (1925) 90 J.P. 1. 102 COMPULSORY PURCHASE 70 P. & c.R.

(a) any question which is by any Act (including a local or private Act) directed, in whatever terms, to be determined by a person or one or more persons selected from either of the following panels, that is to say- (i) the panel of official arbitrators appointed under the Acqui­ sition of Land Act; [ ... ]" Section 1 of the 1961 Act provides for the determination of compensation by this Tribunal: Where by or under any statute (whether passed before or after the passing of this Act) land is authorised to be acquired compulsorily, any question of disputed compensation [ ... ] shall be referred to the Lands Tribunal and shall be determined by the Tribunal in accordance with the following provisions of this Act. "Land" in the above section is defined in section 39(1) of the 1961 Act as follows: "land" means any corporal hereditament, including a building as defined in this section, and includes any interest or right in or over land and any right to water. These provisions confer on this. Tribunal jurisdiction over disputes as to the amount of compensation payable on the compUlsory acquisition of land and, in particular, the jurisdiction formerly exercised by the panel of official arbitrators appointed under the 1919 Act. This latter point is important in view of the decisioll in Thurrock. 21 In our view, therefore, the effect of the 1949 and 1961 Acts is to transfer from arbitration to this Tribunal the jurisdiction over the assessment of compensation consequent on the construction of a sewer in private land under the 1936 Act, provided the construction and vesting of the sewer constitute a compulsory acquisition of "land" (as defined in section 39(1) of the 1961 Act). The question we must answer, therefore, is have the respondents, by the construction of the Belmont Sewer in the claimants' land, acquired compulsorily "any interest or right in or over land?" It is common ground that the laying of the sewer was carried out by compulsion. But there is a fundamental disagreement between the parties as to whether the respondents have acquired any right or interest in the claimants' land. To answer this question we must consider the authorities to which we have been referred. The first is Taylor.22 The dispute in that case was whether Oldham Corporation were empowered under statute to excavate a private road for the purposes of constructing a sewer, without any previous agreement for the purchase of the plaintiffs' rights in the road. The plaintiffs applied for an injunction to restrain the corporation but this was refused on the grounds that the corporation had statutory authority for their actions. In the course of his judgment, Sir George Jessel M.R. referred to section 59 of a local Act, which provided that all existing and future public sewers shall "vest in and 23 belong to the corporation", and then said : Now, that is a very useful provision. It was found under the old law, and

21 (1925) 90 J.P. 10. 22 (1876) 4 Ch.D. 395. 23 ibid. at 411-412. L.T. TAYLOR & TAYLOR v. NORTH WEST WATER 103 it was sometimes held, that the sewer authorities [ ... ] had only an easement, and it was found to be very inconvenient, and consequently in the modern Acts the property in the sewers has been vested in the sewer authorities. That is to say, that instead of allowing the property to remain in the owner of the soil, subject to an easement or right of sewerage or drainage, the absolute property in the sewer (which means not merely the brick barrel, or whatever it may be, forming the sewer, but the whole interior of the sewer, that is, the whole of the space occupied by it) is now vested in the sewer authorities. And if the sewer is a large one, it amounts, in substance, for all useful purposes, to the whole of the subsoil, and that is absolutely vested in the corporation. This statement was referred to with approval in Thurrock.24 Mr Sauvain relied on it as the high point of his argument but Mr Fraser submitted that the precise meaning is not clear. He said that the Master of the Rolls was essentially concerned with the property in the sewer: his reference to the subsoil was an aside, when he concluded that, if a sewer is substantial, then the authority obtains the subsoil. These comments appear to relate to the practical consequences, as opposed to the legal effect, of laying the sewer. The second case is Bradford25 a decision concerned with the repair of a drain passing through private property. The facts are not relevant to this reference but Mr Sauvain relied on part of the judgment of Lord Russell c.J., where he referred to section 13 of the 1875 Act (which stated that all sewers shall vest in and be under the control of the local authority) and then 26 said : But what is the meaning of the word "vest" in s.13 of the Act of 1875? It has been clearly held that the vesting is not a giving of the property in the sewer and in the soil surrounding it to the local authority, but giving such ownership and such rights only as are necessary for the purpose of carrying out the duties of a local authority with regard to the subject matter: [ ... ] The third authority is Thurrock. 27 Mr Sauvain relied heavily on this decision and we note that it is cited in the text-books to support the proposition that the laying of a sewer constitutes a compulsory acquisition of land, with the consequence that the determination of compensation is within the jurisdiction of this Tribunal. In Thurrock a sewerage board laid a sewer under the 1875 Act through land owned by the Land Company. Subsequently the parties entered into an agreement with provision for compensation to be assessed by an arbitrator. The parties were unable to agree the compensation and an arbitrator was appointed. He made an alternative award in the form of a special case. This stated that, if the arbitration was under the 1875 Act, then the Land Company were entitled to compensation of £5,090, but that if the arbitration was held under the 1919 Act then the compensation was £2,148. The High Court held that this was an arbitration under the latter Act. The laying of the sewer was a compulsory acquisition of land and therefore within the 1919

24 (1925) 90 J.P. 1. 25 [1896] 2 Q.B. 205. 26 ibid. at 211. 27 (1925) 90 J.P. 1. 104 COMPULSORY PURCHASE 70 P. & c.R. Act. The reference to the 1875 Act in the subsequent agreement did not exclude the rules under the 1919 Act and the terms of the agreement relating to the primary basis of value were not inconsistent with that Act. Mr Sauvain particularly relied on the following extract from the judgment 28 of Roche J. : Is not the answer the one put forward by (Counsel for the Board), namely, that the laying of a sewer, at any rate in the manner it was laid in this case by a sewerage board, is the acquisition of land, in support of which proposition he cited Taylor v. Corporation of Oldham with special reference to what Sir George Jessel M.R. said. 29 That proposition has been supported and adopted in a large number of the later cases and is not disputed on behalf of the land company in this case. We also think that the following paragraph is important: The next proposition laid down by (Counsel for the Board) is that in the circumstances of this case the laying of the sewer was not merely the acquisition, but the compulsory acquisition, of land. That appears from the facts recited in the agreement between the parties dated July 15, 1924, which is annexed to the special case. It recites what has been done, and it appears that the sewer was laid before the agreement was made, and pursuant to notices and powers which are conferred by the Public Health Act, 1875, among other sections, particularly by s.16. In those circumstances the proposition is established that there was compulsory acquisition of land pursuant to authority, which two facts are necessary to bring the case within the Acquisition of Land (Assessment of Compensation) Act 1919. The authorities discussed above are relied on by the claimants; the remaining two decisions are relied on by the respondents. The first is Newcastle. 30 The issue in that case was whether the plaintiff local authority were entitled to damages for damage to their gas pipes by the working of a coal mine. Related to this issue was the right or interest of the authority in their pipes in the soil and, in particular, the right of support. At first instance Evershed J. held that the statute under which the authority laid the pipes gave them the exclusive right to occupy the space in the soil occupied by the pipes and that subterranean part of the soil on which the pipes rested; but this occupation did not vest in the local authority any legal or equitable estate in the land?l The mine owners appealed and, on the question of the right or interest of the authority in their pipes, the Court of Appeal held that the local authority's exclusive right of occupation was limited to the space in the soil taken up by their pipes, and did not apply to any part of the soil on which the pipes rested. It followed, therefore, that the only right of support for the pipes was the implied right of support for the pipes themselves (as distinct from the right of support enjoyed by the owners of the soil), arising out of the exercise of their statutory power to lay the pipes, which right was

28 ibid. at 2. 29 (1876) 4 Ch.D. 395, 411. 30 [1947]1 Ch. 427. 31 ibid. at 428. L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 105 taken away by section 4 of the Public Health Act 1875 (Support of Sewers) Amendment Act 1883. Mr Fraser relied strongly on this case and particularly drew our attention 32 to the following extract from the judgment of Morton L.J. : To sum up, accepting as I do the reasoning of Evershed 1. with the one vital exception which I have mentioned, we agree: (a) That the corporation have no right of ownership or proprietorship of the soil in which their pipes are laid; (b) that they are not the tenants of any part of that soil; (c) that no easement is vested in the corporation; (d) that the corporation have no title, legal or equitable, in that soil; and (e) that the corporation are not the inheritors of the right to support admittedly vested in the owners of the surface land. Further, in my view, and here I differ from the judge, the corporation have not the exclusive right to occupy any portion of that soil, as distinct from the space or cavity occupied by their pipes. To what conclusion do these findings lead? They lead me to the conclusion that the corporation never acquired any right of support against the company except the implied right arising from the exercise of the corporation's statutory powers, as explained in Normanton Gas Company v. Pope & Pearson Ltd.33 I think that Evershed J. might have arrived at the same conclusion if he had thought, as I do, that the corporation are not in exclusive occupation of any part of that soil in respect of which there exists a natural right of support' as against the company. As I have said, all that the corporation have the right to occupy, and do occupy, is a cavity in the ground, which is entirely filled by the pipes in question. A cavity cannot have attached to it a natural right to support-it is merely an empty space; .[ ... ] 34 Mr Fraser also referred to part of the judgment of Somervell L.J. : The corporation and their predecessors did not purchase any land or any interest in land from the owners of the land in which the mains are. Nothing in the nature of a proprietary interest in the land was vested in them. The mains were laid under successive local Acts, which embodied s.6 of the Gas Works Clauses Act 1847, [ ... ] 35 Later he said : My conclusions can be summed up in three propOSltlons: (1) The corporation occupy, and occupy only, the space in which the mains are; (2) the only right which they can put forward is a right of support for their mains; (3) the natural right of support possessed by the surface owners is a right of support to the land in its natural state, and the corporation cannot claim this right because their occupation is restricted to their mains [ ... J. The section provides no remedy for loss of the consideration which a landowner might expect to receive if he granted an easement. Finally, the respondents rely on the decision of this Tribunal in the St John's College case. This was a reference by consent for the determination of

32 ibid. at 457. 33 (1883) 52 LJ. (Q.B.) 629. 34 [1947]1 Ch. 427, 462. 35 ibid. at 466. 106 COMPULSORY PURCHASE 70 P. & c.R. compensation under the (as amended) for the laying of a water pipe in agricultural land. In his decision the then President (V. G. 36 Wellings, Q.c.) said : It is common ground between the parties and indeed axiomatic that when a pipe is laid under land by a water authority under section 19 of [Schedule 3 to] the Water Act 1945 (as amended) no easement or other legal or equitable right in the land is created or acquired by the authority. The section is concerned to give not rights but powers to water authorities. The section does not provide for a consideration to be paid by the authority in exchange for the exercise of any of the powers granted. The only remedy provided by the section is compensation for damage done to the land or for injurious affection of land where the damage or injurious affection is attributable to the laying, repair, alteration, renewal, removal or inspection of the main [ ... ]. The section provides no remedy for loss of the consideration which a landowner might expect to receive if he granted an easement. Mr Fraser relied on this statement but we, note that, later in his decision, the President left open the question of the ownership of the pipe and the 37 rights which could be exercised in respect of it. He said : I have heard no argument on the interesting question of who owns the pipeline after it has been laid. Does it vest in the successive owners of the lands along its route on the principle quicquid plantatur solo solo credit? Can they dig it up? Is it a chattel owned by the authority which laid it? Section 53 of the (which is not yet in force) appears to assume that it remains vested in that authority. It may be implicit in s.19 that the powers there given include power to keep the main where laid. Further it may be that after the main is laid it remains in the possession of the authority which laid it and that if the main were damaged or threatened by the roots of trees or foundations of buildings planted or erected over it the authorit~ would have a cause of action in common law nuisance: see Newcastle [ ... ]. We have found it impossible to reconcile the above decisions. There are two lines of inconsistent authority: Taylo?9 and Thurroceo on the one hand and Newcastle41 and St John's College42 on the other, with Bradford43 on its own somewhere between them. The Taylor and Thurrock decisions indicate that the laying of a sewer under statutory powers constitutes a compulsory acquisition of land. The Newcastle and St John's College decisions indicate that the laying of a sewer is the exercise of a power and not the acquisition of any right or interest in land. Bradford states that the vesting of a sewer is not a giving of the property in the sewer and surrounding soil to the authority, but only of such ownership and rights as are necessary for the carrying out of

36 [1990]1 E.G.L.R. 229, 232. 37 ibid. at 232. 38 [1947]1 Ch. 427. 39 (1876) 4 Ch.D. 395. 4Q (1925) 90 J.P. 1. 41 [1947]1 Ch. 427. 42 [1990]1 E.G.L.R. 229. 43 [1896] 2 O.B. 205. L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 107 the authority's duties in relation to that sewer. We must decide which line of authority to follow. We prefer Taylor and Thurrock. In our view the true position is as follows. A distinction is to be drawn between the exercise by an authority of their power to lay a sewer and the subsequent interest or rights acquired when the sewer is laid and vested in them. The respondents had power under section 15 of the 1936 Act to lay a sewer in the claimants' land. They exercised that power and are placed under an obligation under section 278 of the 1936 Act to pay "full compensation" for damage. When the sewer was laid it "vested" in the respondents under section 20 of the 1936 Act and the crucial question is the nature of the interest or right which so vested. In our opinion this question is answered by Taylor44 and Thurrock.45 The property in the sewer vested in the respondents, that is to say the absolute property in the sewer (the whole of the space occupied by the sewer) became vested in the respondents (see Taylor).46 This was an acquisition of land, namely the stratum Of subsoil comprising the sewer, and it was a compulsory acquisition of "land" within the meaning of section 39(1) of the 1961 Act, by reason of the use of compulsion under section 15 of the 1936 Act (see Thurrock). We prefer Taylor and Thurrock to Newcastle47 and St John's College48 for the following reasons. First, the issues before the Court in Thurrock were closer to the issues in this reference than is the case with the Newcastle and St John's College decisions. In Thurrock the issue was essentially whether the laying of the sewer was a compulsory acquisition of land (as contended by the Board) or whether it was by agreement (as contended by the Land Company). The court found for the Board. The issues in Newcastle and St John's College were, however, different. In the former the dispute concerned the right of support to gas pipes laid under legislation which differed from the 1936 Act. The observations of the two members of the Court of Appeal who gave judgment, on the rights of the local authority in respect of their pipes, were directed towards the narrow issue of support rather than the wider issue of ownership or rights. Furthermore, as Mr Sauvain pointed out, this decision appears to concede that the authority did have the exclusive right to occupy the space or cavity used by their pipes and this must be a right over land for the purposes of the 1961 Act. In our opinion, the Newcastle decision is authority for the proposition that an undertaker does not obtain a common law right of support for a pipe laid in another person's land and does not acquire any interest in the soil surrounding the pipe. The St John's College decision also dealt with a dispute other than the ownership or rights in respect of sewers or pipes laid in land. The issue here was the compensation payable for the laymg of a water main through agricultural land. The President's observation, that the authority did not acquire any legal or equitable rights in the land,49 must be read as an introduction to the point he subsequently made that compensation is for damage and injurious affection and not for the acquisition of rights in land.

44 (1876) 4 Ch.D. 395. 45 (1925) 90 J.P. l. 46 (1876) 4 Ch.D. 395,411 47 [1947]1 Ch.427. 48 [1990]1 E.G.L.R. 229. 49 ibid. at 232. 108 COMPULSORY PURCHASE 70 P. & C.R. Following the part of the decision relied upon by Mr Fraser and set out 50 above, the President said : The description of payments made by the Thames Water Authority to landowners as "recognition payments" or "rights of entry payments" do not appear to be apt, because they do not appear to describe compensation for damage but rather payments in the nature of consideration for a right to enter or re-enter the land. The section provides no remedy for loss of the consideration which a landowner might expect to receive if he granted an easement. Furthermore, we have already referred to the later part of the decision where the President expressly reserved the question of the ownership of the main after it had been laid. 51 His remarks on ownership and rights were, in our view, obiter. The point does not appear to have been argued and no authorities were cited by him (although he makes reference to Newcastle in his decision). We do not think that he was laying down propositions of general application. We also note that the legislation in this case was the Water Act 1945 (as amended) and not the 1936 Act. Our second reason for preferring Taylo,s2 and Thurroc/23 is the short one that these decisions, although relevant, were not cited or referred to in the Newcastle54 and St fohn's College55 decisions. . Even if we are wrong in holding that the laying and vesting of a sewer under the 1936 Act is a compulsory acquisition of the stratum of land containing the sewer, we find in the alternative that the laying of the sewer through the claimants' land gave the respondents an "interest or right in or over land" sufficient to bring it within the definition of "land" in section 39(1) of the 1961 Act. We have already referred to the part of the Newcastle decision which indicates that, at the least, the respondents have a right to occupy the space or cavity occupied by the sewer. In the Bradford56 decision Lord Russell C.l. in the part of his decision referred to above, said that the vesting of a sewer gave such ownership and rights as are necessary for the purpose of carrying out the duties of the local authority with regard to the sewer. These rights would, in our view, be sufficient to satisfy the definition of "land" in section 39(1) of the 1961 Act. It would be an absurd situation if sections 15 and 20 of the 1936 Act gave only the power to lay a sewer through private land but no interest or rights in that sewer after it had been laid. The correct position seems to be that section 15 gives the power to lay the sewer and section 20 vests the stratum of land in which the sewer is laid or, at least, an interest or right in that land sufficient to satisfy the definition of "land" in section 39(1) ofthe 1961 Act, in the sewerage authority. We are reinforced in this decision by the text-books and commentaries to which we have been referred. For example, Dr Garner in The Law ofSewers 57 and Drains : •

50 ibid. at 232. 51 ibid. at 232. 52 (1876) 4 Ch.D. 395. 53 (1925) 90 J.P. 1. 54 (1947]1 Ch. 427. 55 [1990]1 E.O.L.R. 229. 56 [1896]2 Q.B. 205. 57 7th ed. at pp. 202-203. L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 109 As a general rule arbitrations, whether under the 1936 or the 1984 Act will be conducted before a single arbitrator appointed by agreement between the parties, or, in default of agreement, by the Secretary of State. By contrast claims in respect of damage involving the acquisition of land related to the laying of public sewers under section 15, will fall to be determined by the Lands Tribunal because the amount of the compensation is to be determined in accordance with the principles contained in the Land Compensation Act 1961, replacing the former Acquisition of Land (Assessment of Compensation) Act 1919. 58 Dr Wilkinson in Pipes, Mains, Cables and Sewers : Where the water authority places a sewer in private land compensation is payable for damage so caused (Public Health Act 1936, s.278). The au. thority acquires an interest in land (an easement) and damages are payable for (a) the easement and (b) the damages, present or future arising from the acquisition, Thurrock Joint Sewerage Board v. Thames Land Co. Ltd.59 In the Encyclopaedia of Environmental Health the commentary to section 60 278 of the 1936 Act contains the following statement : Arbitration under the Act must be conducted in the manner provided by s.303. But if acquisition of land is involved (e.g. in a case where compensation is claimed in respect of the construction of a public sewer: Thurrock Grays and Tilbury Joint Sewerage Board v. Thames Land 61 CO. [ ••• ]) the principles ofs.5 of the Land Compensation Act 1961 will then apply and proceedings must be taken before the Lands Tribunal: Lands Tribunal Act 1949, s.I(3). We were also provided with extracts from Halsbury's Laws of England and, although no submissions were made on this material, we have found paragraph 343 and footnote (3) on page 273 helpfu1. 62 The relevant parts of this paragraph and the footnote (marked*) are as follows: 343. Effect of vesting. The effect of the vesting of a sewer in the water authority is to confer on the authority, so far as is requisite to enable it to control and maintain the sewer, an absolute property in the sewer and the space which it occupies* together with a right of access; [ ... ] 63 64 * Taylor v. Oldham Corporation ••• ; Bradford v. Eastbourne Corporation .•• ; Ystradr!odwg and Pontypridd Main Sewerage Board v. Bensted (Surveyor of 66 Taxes) ; Pemsel and Wilson v. Tucker ; Port of London Authority v. C(lnvey Island 67 Commissioners ; Newcastle-Under-Lyme Corporation v. Wolstanton Lt~ ... The

58 5th ed. at p. 100. 59 (1925) 90 J.P. 1. 60 See para. 1--479. 61 (1925) 90 J.P. l. 62 Vol. 38. 63 (1876) 4 Ch.D. 395. 64 [1896] 2 Q.B. 205. 65 [1907] AC. 264. 66 [1907]2 Ch. 19l. 67 [1932]1 Ch. 446. 68 [1947]1 Ch. 427. 110 COMPULSORY PURCHASE 70 P. & c.R. interest in the sewer which is thus vested appears to be a legal estate in fee simple determinable when the pipe or conduit ceases to be a sewer, and, for the purposes of the Law of Property Act 1925, a fee simple absolute by virtue of section 7(1): Tithe Redemption Commissioners v. Runcorn UDC. 69 See also Birkenhead Corporation v. London and North Western Railway Co. 70 Not all the cases referred to in this footnote were cited to us but we thought it desirable, in view of the difficulty of the point of law under consideration, to examine the other decisions to see whether they support the propositions in paragraph 343 and the footnote above regarding the effect of vesting. We conclude that in general they do. Another extract from Halsbury above was put before us without commene1 and is relevant to the first issue of law. This is a summary of the compensation provisions in the 1936 Act. It states that the tribunal for determining disputed compensation is an arbitrator and there is no mention of any jurisdiction in this Tribunal. Similarly, in the commentary on sections 278 and 303 of the 1936 Act in Halsbury's Statutes,72 also put to us without comment, the references are to the settlement of disputes by arbitration and not by the Lands Tribunal. We note, however that none of these extracts refer to the Taylor73 or Thurroce4 decisions. The compensation provisions relating to the laying of sewers are now contained in the Water Industry Act 1991. Mr Fraser submitted that jurisdiction over compensation for the laying of sewers has been given to this Tribunal under paragraph 3 of Schedule 12 to this Act and, if the claimants' case is correct, this would have been unnecessary. It could, however, also be said that Parliament, when it passed the Water Industry Act 1991, was aware of the Thurrock decision and the generally held view that jurisdiction over compensation for sewers resided in this Tribunal, and was merely clarifying the position as interpreted earlier by the courts. For the reasons set out above we hold that the laying of the Belmont Sewer in the claimants' land was a compulsory acquisition of land within section 1 of the 1961 Act and therefore any question of disputed compensation is to be determined by this Tribunal. This compensation would have been determined by an official arbitrator under the 1919 Act and by section 1(3)(a)(i) of the 1949 Act it is now to be determined by this Tribunal. We have jurisdiction, therefore, to proceed to the second issue of law.

Second Issue of Law The second issue of law is whether this Tribunal has power to award interest on the agreed compensation. Three matters are common ground between the parties: first, that there is no general right to interest at common law and that such a right must arise out of agreement or statute; secondly, that there is no agreement to pay interest in this reference; thirdly, that there is no right to institute civil proceedings solely to recover interest.

69 [1954] Ch. 383. 70 (1885) 15 a.B.D. 572. 71 Vol. 38, para. 46. 72 Vol. 35, paras. 160 and 172. 73 (1876) 4 Ch.D. 395 .. 74 (1925) 90 J.P. 1. L.T. TAYLOR & TAYLOR V. NORTH WEST WATER 111 Claimants' Case Mr Sauvain submitted that the claimants' right to interest arises by virtue of statute, that is to say under section 32 of the 1961 Act, or section 63 of the Land Compensation Act 1973 ("the 1973 Act") or section 278 of the 1936 Act. He accepted that no right to interest can arise under rule 38 of the Lands Tribunal Rules 1975. Mr Sauvain's main contention is that interest arises by virtue of section 32 of the 1961 Act. The laying of the sewer in the claimants' land was a compulsory acquisition of land and therefore interest is payable on the compensation under section 32. Mr Sauvain also referred to section 11 of the Compulsory Purchase Act 1965 ("the 1965 Act"), which allows entry on land before the payment of compensation, subject to the payment of interest under section 32 of the 1961 Act. But he said that this latter section is not, however, limited to the situation under section 11: the provisions of section 32 are expressly applied to section 11 rather than the reverse. Mr Sauvain referred to the commentary to section 32 of the 1961 Act in the Encyclopaedia of Compulsory Purchase and Compensation, which indicates that this is the enabling section for interest in several situations. Alternatively, Mr Sauvain said that section 63 of the 1973 Act provides that compensation under section 10 of the 1965 Act, for injurious affection where no land has been taken, shall carry interest under section 32 of the 1961 Act. If, therefore, the laying of the sewer in the claimants' land was not a compulsory acquisition of land, then it fell within section 10 of the 1965 Act and interest is payable on the compensation from the date of claim. In the second alternative, Mr Sauvain submitted that section 278 of the 1936 Act requires "full compensation" to be made and compensation cannot be full if it is paid after the event and does not bear interest. He said that Parliament must have intended the word "full" to carry a particular meaning as it is not generally found in compulsory purchase legislation. Land has been taken by the laying of the sewer, said Mr Sauvain, and it would be remarkable if no interest could be awarded to ensure that "full compensation" was made, when interest is payable under sections 10 or 11 of the 1954 Act. Finally, Mr Sauvain referred to two cases involving analorous situations where interest was payable (Fletcher v. Birkenhead Corp.7 and Knibb v. National Coal Board7U ) and to the St John's College77 decision where this Tribunal held that interest was not payable, which Mr Sauvain distinguished on the grounds that this was a voluntary reference to arbitration. Respondents' Case Mr Fraser said that the powers of the Lands Tribunal to award interest are limited and the Tribunal has no power to make such an award in this reference. He referred in support to Hobbs (Quarries) Ltd v. Somerset County Councif8; Burlin v. Manchester City Councif9; and the notes to section 32 of the 1961 Act in the Encyclopaedia of Compulsory Purchase and

75 [1907)1 K.B. 205. 76 [1987) Q.B. 906. 77 [1990)1 E.G.L.R. 229. 78 (1975) 30 P. & c.R. 286. 79 (1976) 32 P. & c.R. 115. 112 COMPULSORY PURCHASE 70 P. & C.R.

Compensation. He said that in Fletcher80 (cited by Mr Sauvain) the Court of Appeal did not deal with the question of interest; interest appears to have been awarded by the High Court on the basis that the compensation was a debt and no reference appears to have been made to London, Chatham and Dover Railway v. South Eastern Railway,8! where the House of Lords held that interest is not payable on a debt in tlie absence of agreement or statutory authority. Fletcher is not authority for the payment of interest under the 1936 Act. Mr Fraser said that there is no right to interest under section 278 of the 1936 Act. The reference to "full compensation" in this section means full compensation for the actual damage caused by the laying of the sewer and not to compensation in the form of interest for delay in payment. He referred to the Encyclopaedia of Environmental Health Law and Practice. 82 Mr Fraser also submitted that section 32 of the 1961 Act does not apply. This section does not give a right to interest in new cases but merely prescribes a rate of interest in situations where interest is to be awarded. Interest is not payable generally nor under section 32 but only under some other statutory provision. Mr Fraser said that it is common ground that no proceedings can be brought to recover interest alone, and the only basis for this reference is a claim for interest, all other matters having been resolved. Even if the Lands Tribunal has jurisdiction, this is limited to "any question of disputed compensation". The compensation here is not in dispute: the dispute relates to interest on that compensation. Where compensation has been agreed there is no jurisdiction in this Tribunal (Williams v. Secretary of State for the Environment).83 Mr Sauvain, for the claimants, responded to this submission by saying that interest is part of the overall compensation. Section 278 of the 1936 Act provides for the making of "full compensation" and interest is incorporated within this expression. Furthermore, it is now unconscionable for the respondents to claim that the acceptance of compensation by the claimants prevents the determination of the question whether interest is payable on that compensation. The compensation is still in dispute. The capital element has been agreed, the interest element has not. Finally, Mr Fraser said that any question of injustice if the claimants cannot recover interest is irrelevant. This injustice has been recognised in the past but the courts and this Tribunal have often still felt unable to award interest in the absence of authority to do so.

Decision We agree with Mr Sauvain that we have power to award interest on the agreed compensation in this reference. This flows from our decision on the first issue of law, namely that the laying of the sewer in the claimants' land constituted a compulsory acquisition of land. The relevant statutory provisions are section 32 of the 1961 Act and section 11 of the 1965 Act. Section 32(1) of the 1961 Act provides as follows: The rate of interest on any compensation in respect of the compulsory

80 [1907]1 K.B. 205. 81 [1893] A.c. 429. 82 See para. 1-477, p. 1253. 83 (1976) 33 P. & c.R. 131. L.T. TAYLOR & TAYLOR v. NORTH WEST WATER 113 acquisition of an interest in any land on which entry has been made before the payment of the compensation shall ... be such rate as may from time to time be prescribed by Regulations made by the Treasury. We agree with Mr Fraser that this provision does not in itself give any right to interest but merely contains the machinery for prescribing the rate of interest where the right arises out of other provisions. In this reference the right to interest is contained in section 11 of the 1965 Act which provides as follows: If the acquiring authority have served notice to treat in respect of any of the land and have served on the owner, lessee and occupier of that land not less than fourteen days notice, the acquiring authority may enter on and take possession of that land, or of such part of that land as is specified in the notice; and then any compensation agreed or awarded for the land of which possession is taken shall carry interest at the rate prescribed under section 32 of the Land Compensation Act 1961 from the time of entry until the compensation is paid, [ ... ] We do not think that the absence of notice to treat in this reference is fatal to the claimants' case: the service of such a notice does not form part of the procedure under section 15 of the 1936 Act. The essential requirements for the payment of interest are present, namely the compulsory acquisition of an interest in land and entry before the payment of compensation. Accordingly, interest is payable on the agreed compensation from the date of entry to the date of payment at the rates prescribed under section 32 of the 1961 Act. We also find support for this decision in section 278 of the 1936 Act which requires the payment of "full compensation". In this respect we adopt part of the decision of this Tribunal in Pattinson v. Finningley Internal Drainage 84 Board (not cited), where the member (J.H. Emlyn Jones) said : As to interest, Mr Pattinson asked that interest should be allowed on the total of the award from the date of entry on his land, February 22, 1964. Mr Payne though not agreeing this item on behalf of the board, did not resist it. I consider that interest should be allowed, if only because the payment of a sum of money in 1971 in respect of injury suffered in 1964---whatever may be the reason for the delay---cannot otherwise be said to be "full compensation" for that injury l ... ] Before we conclude our decision, however we must deal with three other matters put to us. These relate respectively to the payment of interest under section 63 of the 1973 Act, to the question as to whether we have jurisdiction in a reference solely to recover interest, and to the relevance of three decisions cited to us. Mr Sauvain contended that, as an alternative to section 32 of the 1961 Act, interest could be awarded under section 63 of the 1973 Act. This provides that compensation for injurious affection where no land has been taken shall carry interest at the prescribed rate under section 32 of the 1961 Act from the date of claim until payment. We have held that the laying of the sewer in the claimants' land was a compulsory acquisition of land and it must follow, therefore, that land has been taken and that section 63 does not apply. The second point is whether we are denied jurisdiction because this is a reference solely to recover interest. It is common ground that civil

84 (1971) 22 P. & C.R. 929, 941. 114 COMPULSORY PURCHASE 70 P. & c.R. proceedings cannot be brought to recover interest. Mr Fraser submitted that, compensation having been agreed, we have no jurisdiction because this reference relates only to interest. Mr Sauvain responded by arguing that interest is part of the "full compensation" payable under section 278 of the 1936 Act, which is still indispute. The capital element has been agreed but not the interest thereon. Several authorities were cited to us but without further submissions. We have thought it necessary to examine them in order to deal with this point, which we regard as of some importance. In the London, Chatham and Dover Railway case85 the House of Lords held that interest could not be awarded by way of damages for the detention of a debt. This is an early example of the rule that interest is not recoverable at common law as general damages for the late payment of money. In President of India v. La Pintada Compania Navigacion S.A.,86 the House of Lords held that the arbitrator had no power to award interest for the late payment of sums due under common law or under section 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934. We find these two cases unhelpful in connection with the point under consideration. They are examples of the general rules, not in dispute, that interest cannot be recovered at common law as general damages for late payment of money due and that the right to interest must be found in statute or agreement. In this reference we have decided that the claimants' right to interest arises out of statute. The next three cases are more relevant. In Edmonds v. Ltoyds Itatico,8? the situation was similar to this reference. The plaintiffs accepted a sum paid by the defendants on the basis that it represented only the principal due: they continued with their claim for interest and costs. They obtained summary judgment for both damages and interest and this decision was upheld by the Court of Appeal on the grounds that the sum tendered as settlement of the entire claim had never been accepted as such by the plaintiffs. Payment of a debt in full extinguished a cause of action but where the position was otherwise the court still had jurisdiction to give judgment on liability and assess the damages. In President ofIndia v. Ups Maritime Corporation,88 the court held that there was no cause of action for the late payment of damages. Finally, Williams89 was a reference to determine the compensation following compulsory purchase where the claimant had already agreed that compensation. The Tribunal held that it had no jurisdiction to determine the reference since there was a binding statutory agreement as to the amount of compensation. These decisions do not, in our opinion, support Mr Fraser's contention that a reference cannot be brought before this Tribunal solely in respect of interest on compensation. The Edmonds90 decision is particularly relevant. Here there was acceptance by the plaintiffs of the principal sum due but interest and costs were still in issue and were decided in subsequent proceedings. In this current reference the claimants have received compensation but have persisted in their claim for interest. We have been

"5 [1893) A.c. 429. "6 [1985) A.c. 104. "7 [1986)1 W.L.R. 492. xx [1988) A.c. 395. "9 (1976) 33 P. & C.R. 131. 90 [1986)1 W.L.R. 492. L.T. TAYLOR & TAYLOR v. NORTH WEST WATER 115 shown correspondence between the parties during the period May 24 to July 22, 1991 and it is agreed that the settlement reached at that time did not include interest, which was left outstanding for future agreement or determination. Williams91 can be distinguished on the facts. In that decision compensation had been agreed and there was no dispute over which the Tribunal had jurisdiction. In this current reference, however, only part of the dispute has been resolved: the question of interest is still outstanding and capable of determination. We were also referred to the part of the St fohn's College92 decision dealing with interest. The Tribunal held that it had no power to award interest on compensation under the Water Act 1945. This was a reference by consent and the President was, therefore, acting as an arbitrator under the 1949 Act. The dispute on interest centred on the Tribunal's powers as arbitrator to award interest. This is not the position here where we have held that our jurisdiction arises out of statute following the compulsory acquisition of land. We do not find the St fohn's College decision helpful. We do not think it is necessary to analyse further the above decisions. In our view they do not establish that a reference solely for the determination of interest cannot be brought before this Tribunal. We have held that we have jurisdiction in this dispute and that the claimants have a right to interest on the agreed compensation. It would be a remarkable situation if we are now forced to decide that the claimants cannot assert that statutory right by a reference to this Tribunal. This would be a right without a remedy. We hold, therefore, that the claimants have the right to bring a reference before this Tribunal solely to determine disputed interest on agreed compensation, an issue which we have found is still in dispute between the parties. Finally, we must consider briefly the decisions in Hobbs,93 Burlin94 and Knibb95 which have been referred to in argument. Hobbs concerned the compensation payable following the revocation of planning permission and the making of a discontinuance order under the Town and Country Planning Act 1962. The Tribunal declined to award interest on the grounds that their jurisdiction was limited to assessing the claimant's compensatable loss at the date of the Orders. The Tribunal then became functus officio and had no statutory power or equitable jurisdiction to award interest. In this current reference, however, we have held that there is a statutory right to interest and the Hobbs decision can be distinguished. Burlin was a reference to determine compensation following the removal of development rights. The Tribunal reluctantly declined to award interest for the same reasons as in Hobbs. The Tribunal noted, however, that there are statutory provisions relating to interest, including section 32 of the 1961 Act and section 63 of the 1973 Act, and that the Tribunal can award interest where it has statutory power to act. This decision can also be distinguished on the grounds that in this current reference there is a statutory right to interest. In Knibb the Court of Appeal upheld a decision of this Tribunal to award interest on compensation under the Coal Mining (Subsidence) Act 1957,

91 (1976) 33 P. & c.R. 13l. 92 [1990]1 E.G.L.R. 229. 93 (1975) 30 P. & c.R. 286. 94 (1976) 32 P. & c.R. 115. 95 [1987] Q.B. 906. 116 COMPULSORY PURCHASE 70 P. & c.R. subject to a change of date for the commencement of that interest. By a majority the court decided that the proceedings before the Tribunal were in the nature of a claim for damages and Parliament, in appointing the Tribunal to act as statutory arbitrator in these cases, must have intended it to have power to award interest. This decision under different legislation, is not directly relevant to this current reference, but provides some support for the principle underlying the claimants' case. To summarise the overall position, therefore, we find for the claimants on both issues. We hold that the laying of the Belmont Sewer by the respondents in the claimants' land was a compulsory acquisition of land within section 1 of the 1961 Act and that this Tribunal has jurisdiction to determine a reference of disputed compensation under that section and under section 1(3)(a)(i) of the 1949 Act. We also hold that under section 11 of the 1965 Act interest is payable on the agreed compensation from the date of entry to the date of payment at the rates prescribed under section 32 of the 1961 Act. Finally, we hold that the claimants have the right to bring a reference to this Tribunal solely to determine disputed interest on the agreed compensation and that we have jurisdiction to award such interest. This decision determines the substantive issues raised between the parties, and the Tribunal's award is final. The parties are invited to make such submissions as they are advised as to the costs of the hearing, and a letter accompanies this decision as to the procedure for submissions in writing. The Tribunal will, in due course, incorporate an order as to costs in an addendum to this decision. Rights of appeal under section 3(4) of the Lands Tribunal Act 1949 and R.S.c., Ord. 61 will not accrue until the decision has been thus completed, i.e. from the date of this Addendum. Addendum as to costs We have received written submissions as to costs from both parties. We have found for the claimants on both issues in this reference and accordingly we order the respondents to pay the costs of the claimants, such costs, if not agreed, to be taxed by the registrar of the Lands Tribunal on the High Court standard basis. Laying of a sewer a compulsory acquisition of land giving The Tribunal jurisdiction to deter­ mine compensation. Interest to be payable on the agreed com­ pensation from the date of entry to the date of payment. Claim­ ants entitled to have disputed interest determined by Tribu­ nal. Respondents to pay claim­ ants costs. Solicitor-l. R. Tetlow, Solicitor to North West Water. Counsel for the claimants instructed by C. C. Manley, Surveyor and Valuer.