The Mayor and Commonalty and Citizens of the City of London v Transport for London

Introduction

1. There are before the Tribunal applications by the parties regarding costs. The claimants seek costs against the acquiring authority. The acquiring authority seek costs against the claimants. Each party resists the claim for costs made by the other.

2. The present proceedings were commenced by a notice of reference made by the claimants dated 14 June 2017. By a letter dated 13 June 2018 the claimants’ solicitors notified the tribunal that on 12 June 2018 the claimants reached a settlement with the acquiring authority and that therefore the claimants’ reference was withdrawn. The views of the acquiring authority were sought regarding the proposed withdrawal. The acquiring authority raised the question of a costs claim which in turn resulted in a costs claim being made by the claimants.

3. The claimants do not have a unilateral right to withdraw the reference. The notice of withdrawal dated 13 June 2018 stated that it was given in accordance with “the 2009 Procedural Rule 17 (1)(a)”. I interpret the intention of this document as being a notice of withdrawal in accordance with Rule 20 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 as amended which provides:

20. —(1) Subject to paragraph (2), a party may give notice of the withdrawal of its case, or any part of it— (a) by sending or delivering to the Tribunal and all other parties a written notice of withdrawal; or (b) orally at a hearing. (2) Notice of withdrawal will not take effect unless the Tribunal consents to the withdrawal. 4. Accordingly the reference is not yet withdrawn and remains in place for the purpose of the present costs determination. 5. In summary the facts leading to the making of the reference to the Upper Tribunal are as follows. 6. (1) Pursuant to section 6 of the Crossrail Act 2008 the Secretary of State was empowered to acquire, inter-alia, a stratum of sub-soil beneath Billingsgate Market (the reference land) in order to construct the Crossrail railway. The relevant powers of compulsory purchase were subsequently devolved to the acquiring authority. (2) The claimants held two interests in the reference land namely the freehold (being the freehold reversion upon a lease for a term of 999 years held by the London Borough of Tower Hamlets) and also a lease for a term of 99 years held by the claimants from that London Borough. (3) The reference land was acquired by the acquiring authority under a general vesting declaration made on 6 April 2011. The vesting date was 16 June 2011. (4) There was some correspondence between the representatives of the acquiring authority and the representatives of the claimants in 2012 and 2013 regarding the acquisition of the subsoil. It seems that no significant efforts were made by the parties to settle the matter prior to the summer of 2017. No document purportedly representing a particularised claim was submitted by the claimants until the claim next mentioned. (5) On 9 June 2017 the claimants’ solicitors wrote to the acquiring authority indicating that (as was the case) the six year limitation period for a reference to be lodged with the Upper Tribunal was to expire very soon. The claimants therefore said that they would, by way of what they described as “a protective measure”, make a reference to the Upper Tribunal. This letter contained a paragraph indicating that the writer was instructed formally to make a claim for compensation in accordance with section 1 of the Land Compensation Act 1961 including claims for injurious affection, subsoil acquisition, settlement and disturbance. The injurious affection claim was stated to be for £18.75 million. This was said to reflect the fact that the acquisition of part of the subsoil would result in a diminution in the value of the claimants’ land interest. It was suggested that, using a residual valuation method, it could be seen that the value of the claimants’ land interest with the Crossrail tunnel not in situ was £78.75 million whereas the value with the Crossrail tunnel in situ was £60 million. Some limited documentation including two annexes, each of just over one page, were enclosed to support this claim. (6) On 14 June 2017 the claimants made the present reference. (7) The parties requested the Upper Tribunal to grant a stay in the proceedings in order to allow time to negotiate settlement of the claim. A draft consent order was proffered. However the Upper Tribunal refused the application and required the acquiring authority to serve its statement of case within one month and made orders for the exchange of witness statements. Further representations were made to the Upper Tribunal to the effect that a different course should be pursued. As a result a case management hearing was set for 15 November 2017 when further directions were given. These directions included a direction that the claimants were to serve an updated statement of case and a response to a previously made request for further and better particulars. (8) On 1 February 2018 the claimants served an amended statement of case and served further particulars including particulars regarding how the claim for injurious affection was said to be justified. This included a development master plan showing a potential redevelopment of the reference land on the basis that the tunnels were not present. (9) The acquiring authority was dissatisfied with the extent of the information provided and indicated as much by their solicitors’ letter of 19 February 2018. Further information was provided on behalf of the claimants by letter dated 20 February 2018, but the acquiring authority remained dissatisfied as is shown by their solicitors’ letter of 28 February 2018 to the Upper Tribunal applying for disclosure and further and better particulars. The claimants expanded further upon this dissatisfaction in their solicitors’ letter of 20 April 2018. (10) As a result there was a further case management hearing on 27 April 2018. The orders then made included an order that the reference was to be stayed until 25 May 2018 to enable the parties to negotiate a final settlement, failing which subsequent directions were to take effect. It may be noted that the directions included provision for each party to be entitled to call an expert witness in four separate disciplines, meaning that the potential hearing could have had evidence from eight separate experts. (11) In fact no settlement was reached by 25 May 2018. However by 12 June 2018 a settlement was reached. This led to the notice of withdrawal of the proceedings and to the present argument about costs.

7. The details of the settlement are not before the Upper Tribunal however from the material before me, including paragraph 2.7 of the letter from TLT on behalf of the claimants dated 11 July 2018, it appears that the claimants settled the claim and agreed to withdraw the reference “… because it has been offered an interest in the land that has vested in the Acquiring Authority that is of equivalent value to its compensation claim negating the need for a monetary settlement” Also from the letter from Ashurst LLP, solicitors on behalf the claimants, dated 24 July 2018 the following appears in paragraph 1.28: “The settlement involved the parties entering into a 25 year option agreement which provides that the Acquiring Authority will, if required as a result of the scheme design, and provided that there is no adverse impact on the tunnels, grant rights for the Claimant to insert piles into the acquired sub- soil.”