HC Deb 29 July 1958 vol 592 cc1187-99

Lords Amendment: In page 68, line 1, leave out the Third Schedule and insert new Schedule.

1. In this Schedule—

2.—(1) The Board shall not be required to pay compensation in respect of expenses incurred in carrying out any work unless

  1. (a) not less than the prescribed length of time before the work was begun, the person incurring the expenses gave to the Board, in the prescribed manner, notice in writing containing adequate particulars of the work, together with a statement of the time when it was proposed to carry out the work and an estimate of the cost of the work, and
  2. (b) at all reasonable times after the service of that notice, that person afforded to the Board reasonable facilities to inspect the land to which the notice related, in so far as he was in a position to afford such facilities.

(2) In the following provisions of this Schedule "the applicant", in relation to a notice under this paragraph, means the person who gave that notice.

3. Where a notice has been given under the last preceding paragraph, the Board, within the prescribed time after the giving of that notice, may serve on the applicant a counter-notice, stating—

  1. (a) that the Board object to the work specified in the applicant's notice, or to such one or more items thereof as may be specified in the counter-notice, and
  2. (b) that they object thereto on such one or more grounds as may be specified in the counter-notice, being one or more of the grounds mentioned in the next following, paragraph.

4. Subject to the next following paragraph, the said grounds, in relation to any work specified in a notice under paragraph 2 of this Schedule, are the following, that is to say,—

  1. (a) that the work could not reasonably be regarded as work falling within paragraph (b) of subsection (1) of section twenty-two of this Act;
  2. (b) that the work is likely to be ineffective, or is by its nature unsuitable to the land in question, or is proposed to be carried out in an unsuitable way;
  3. (c) that the estimated cost of the work is grossly disproportionate to any prospective increase attributable to the work in the value of the land;
  4. (d) that the work, in a case where the former use of the land in question was agricultural, would not be appropriate to the use of that land for agriculture, or, in any other case, would not be appropriate to the use of that land for its former use;
  5. (e) that the work would not be required but for dilapidation, deterioration or damage which has occurred since the end of the period of occupation and is attributable to default on the part of the owner or of an occupier of the land;
  6. (f) that the work, if carried out at the time specified in the applicant's notice, would be premature;
  7. (g) that the work, if carried out at the time specified in the applicant's notice, would not have been carried out at the first reasonable opportunity after the end of the period of occupation, or within a reasonable time after that opportunity arose.

5.—(1) In so far as a notice given under paragraph 2 of this Schedule (in this paragraph referred to as "the current notice") specifies any work (in this paragraph referred to as "the new work") in a case where the applicant has previously given one or more notices under that paragraph specifying similar work which he proposed to carry out in respect of the same land, the last preceding paragraph shall apply in relation to the new work with the substitution, for sub-paragraph (c) of that paragraph, of the following sub-paragraph (in this paragraph referred to as "the substituted subparagraph (c)")— (c) that the aggregate cost of that work and of all relevant work specified previous notices relating to the same land is grossly disproportionate to the aggregate increase attributable to all such work in the value of the land".

(2) In the substituted sub-paragraph (c) the reference to the aggregate cost of the new work and of all other relevant work specified in previous notices relating to the same land is a reference to the aggregate of—

  1. (a) the estimated cost of the new work, and
  2. (b) the estimated cost of any similar work specified in any previous notice given by the applicant which is still outstanding on the relevant date, and
  3. (c) the proper cost of any similar work specified in any previous notice given by the applicant in respect of which a claim for compensation has been allowed before the relevant date or is still outstanding an that date.

(3) In the substituted sub-paragraph (c) the reference to the aggregate increase attributable to all such work as is therein mentioned in the value of the land is a reference to the aggregate of—

  1. (a) the prospective increase in that value attributable to the new work, and
  2. (b) the prospective increase in that value attributable to any similar work specified in any previous notice given by the applicant which is still outstanding on the relevant date, and
  3. (c) the increase in that value attributable to any similar work specified in any previous notice given by the applicant in respect of which a claim for compensation has been allowed before the relevant date or is still outstanding on that date.

(4) For the purposes of sub-paragraphs (2) and (3) of this paragraph

  1. (a) a previous notice specifying similar work shall be taken to be outstanding on the relevant date if—
    1. (i) such a notice has been given before the relevant date and has not been withdrawn, and
    2. (ii) either the Board have not before that date served a counter-notice objecting to that work, or, if they have served such a counter-notice, that abjection has before that date been withdrawn or determined by the Tribunal not to be well-founded, and
    3. (iii) no claim for compensation has before the relevant date been made in respect of expenses incurred in carrying out that work;
  2. (b) a claim for compensation in respect of any work shall be taken to have been allowed before the relevant date if before that date—
    1. (i) a claim for compensation has been made in respect of expenses incurred in carrying out that work, and
    2. (ii) it has been agreed by the Board, or determined by the Tribunal, that compensation is payable in respect of those expenses, whether the amount of compensation so agreed or determined to be payable was the amount claimed or a different amount;
  3. (c) a claim for compensation in respect of any work shall be taken to be still outstanding on the relevant date if at that date—
    1. (i) a claim for compensation has been made in respect of expenses incurred in carrying out that work, and
      2. 1190
    2. (ii) that claim has not been withdrawn, and it has not been determined by the Tribunal that no compensation is payable in respect of those expenses, but
    3. (iii) it has not been agreed by the Board, or determined by the Tribunal, that compensation is payable in respect of those expenses.

(5) In this paragraph, "similar work", in relation to the new work, means work directed to the same aspect of restoration as the new work; "previous notice" in relation to the current notice, means a notice given under paragraph 2 of this Schedule before the date on which the current notice was given; and "the relevant date" in relation to the current notice, means the date on which the Board serve a counter-notice objecting to the new work, or the date on which the time for serving such a counter-notice expires, whichever is the earlier.

(6) In the following provisions of this Schedule (except where the contrary is expressly provided) any reference to subparagraph (c) of the last preceding paragraph, in relation to work to which that paragraph applies in accordance with sub-paragraph (1) of this paragraph, shall be construed as a reference to the substituted sub-paragraph (c), and any reference in this Schedule to the grounds mentioned in the last preceding paragraph shall be construed accordingly.

6. For the purpose of determining whether an objection on the grounds mentioned in subparagraph (c) of paragraph 4 of this Schedule is well-founded, the estimated cost of any work shall be taken to be such amount as may be agreed, or determined by the Tribunal, to be a fair estimate of the cost of the work, whether that amount is equal to, or greater or less than, the estimated cost of the work as stated in the applicant's notice specifying that work.

7.—(1) In sub-paragraph (e) of paragraph 4 of this Schedule, the reference to default on the part of the owner or of an occupier of the land shall be construed in accordance with the following provisions of this paragraph.

(2) In relation to agricultural land, the reference to default on the part of the owner shall be construed as a reference to failure on his part to manage the land in accordance with the rules of good estate management, and the reference to default on the part of an occupier of the land shall be construed as a reference to failure on the part of such an occupier to fulfil his responsibilities to farm the land in accordance with the rules of good husbandry.

(3) In relation to any other land, the reference to default on the part of the owner shall be construed as a reference to failure on his part to deal with the land in a proper and due course of management, and the reference to default on the part of an occupier of the land shall be construed as a reference to failure on the part of such an occupier to maintain and use the land in a reasonable manner.

(4) Sections ten and eleven of the Agriculture Act, 1947 (which prescribe tests for determining good estate management and good husbandry) shall apply for the purposes of sub-paragraph (2) of this paragraph.

(5) In the application of this paragraph to Scotland, for the reference to sections ten and eleven of the Agriculture Act, 1947, there shall be substituted a reference to the Fifth and Sixth Schedules to the Agriculture (Scotland) Act, 1958.

8. Where a notice has been given under paragraph 2 of this Schedule, and the applicant has incurred expenses in carrying out any of the work specified in that notice, and claims compensation in respect of those expenses,—

  1. (a) if the Board have not served a counter-notice under paragraph 3 of this Schedule in respect of that notice, they shall not be entitled to object to that claim on any of the grounds mentioned in paragraph 4 of this Schedule;
  2. (b) if the Board have served such a counter-notice, they shall not be entitled to object to that claim on any of the grounds mentioned in paragraph 4 of this Schedule, except in so far as the claim relates to items which were specified in the counter-notice and the objection is on grounds which were so specified in relation to those items.

9.—(1) Where a notice has been given under paragraph 2 of this Schedule, and the Board have served a counter-notice objecting to the work specified in the notice, or to one or more items thereof, the applicant, before beginning to carry out any item to which such an objection relates, may require the question whether the objection is well-founded to be referred to the Tribunal.

(2) If on such a reference the Tribunal determines that the objection is not well-founded, and the applicant incurs expenses in carrying out any of the work to which the objection relates and claims compensation in respect of those expenses, then (in addition to any grounds on which the Board are precluded by the last preceding paragraph from objecting to that claim) the Board shall not be entitled to object to that claim on any of the grounds which were the grounds of that objection.

(3) If on such a reference the Tribunal determines that the objection is well-founded, and the applicant incurs expenses in carrying out any of the work to which the objection relates, and claims compensation in respect of those expenses,—

  1. (a) if the objection was on the grounds mentioned in any of subparagraphs (a), (b), (c), (d) and (e) of paragraph 4 of this Schedule, no compensation shall be payable in respect of those expenses;
  2. (b) if the objection was on the grounds mentioned in subparagraph (f) of the said paragraph 4, no compensation shall be payable in respect of those expenses by virtue of the notice referred to in subparagraph (1) of this paragraph, but without prejudice to the service of a further notice under paragraph 2 of this Schedule in respect of the work in question;
  3. (c) if the objection was on the grounds mentioned in sub-paragraph (g) of the said paragraph 4, the expenses shall be disallowed by virtue of this sub-paragraph in so far as (but no further than) they were 1192 greater than they would have been if the work to which the objection related had been carried out at the first reasonable opportunity after the end of the period of occupation.

10.—(1) If, in a case where a notice has been given under paragraph 2 of this Schedule, and the Board have served a counter-notice objecting to the work specified in the notice, Or to one or more items thereof,—

  1. (a) the applicant incurs expenses in carrying out work to which the objection relates, without having required the question whether the objection is well-founded to be referred to the Tribunal, and claims compensation in respect of those expenses;
  2. (b) on a reference to the Tribunal with respect to that claim the Board maintain the objection; and
  3. (c) on that reference the Tribunal determines that the objection is well-founded,
the provisions of heads (a) to (c) of subparagraph (3) of the last preceding paragraph shall apply (subject to the following provisions of this paragraph) as they appy in the circumstances mentioned in that sub-paragraph.

(2) Where the objection was on the grounds mentioned in subparagraph (c) of paragraph 4 of this Schedule (otherwise than in a case falling within paragraph 5 of this Schedule) so much of the preceding sub-paragraph as relates to the maintenance of the objection, and to a determination that the objection is well-founded, shall apply as if, in the said sub-paragraph (c), the reference to the estimated cost of the work were a reference to the proper cost of the work.

(3) Where the objection was on the grounds mentioned in the substituted sub-paragraph (c), within the meaning of paragraph 5 of this Schedule, so much of sub-paragraph (1) of this paragraph as relates to the maintenance of the objection, and to a determination that the objection is well-founded, shall apply as if, in the said paragraph 5, any reference to the relevant date were a reference to the date on which the question whether compensation is payable in respect of expenses incurred in carrying out the new work (within the meaning of that paragraph) falls to be determined by the Tribunal, and the objection had been formulated accordingly.

11.—(1) Subject to the next following subparagraph, expenses incurred in carrying out any work shall not be treated as having been reasonably incurred as mentioned in paragraph (b) of subsection (1) of section twenty-two of this Act, if the work was begun more than fifteen years after the end of the period of occupation.

(2) The preceding sub-paragraph shall not apply to any work required for making good damage caused by the settlement of soil replaced in the course of restoring the land or any other damage to the land caused by subsidence which is attributable to anything done in the exercise of rights conferred by the compulsory rights order in question.

12. Where it is shown that the expenses incurred in carrying out any work exceeded the proper cost of the work, any claim for compensation in respect of those expenses shall (without prejudice to any other grounds on which the claim may be liable to be disallowed, wholly or in part) be disallowed to the extent of the excess.

13.—(1) Except in so far as objection is made to any work on the grounds mentioned in sub-paragraph (c) of paragraph 4 of this Schedule, and subject to the provisions of this Schedule relating to any such objection, expenses incurred in carrying out any work shall not be disallowed (wholly or in part) on the grounds that the proper cost of that work (or of that work together with any other work) is greater than any Increase attributable thereto in the value of the land.

(2) Subject to the preceding sub-paragraph, nothing in the preceding provisions of this Schedule shall be construed as precluding the Board from maintaining any objection to a claim for compensation, in so far as the objection is on any grounds other than those mentioned in paragraph 4 of this Schedule.

Sir I. Horobin

I beg to move, That this House doth agree with the Lords in the said Amendment.

I feel that I should apologise to the House, not for the first time, for introducing such a colossal Amendment at this very late stage. I did take the precaution of getting in touch with the hon. Gentleman the Member for Lewisham, North (Mr. MacDermot) and his hon. Friends in order to reassure them, if I could, that there was no secret or hidden intention in it. It is very long, but I think that it deals with matters which are common ground.

In the first place, the Amendment limits the Board's liability in time. We devoted a great deal of consideration in Committee to this very difficult matter. The whole object of cost of works compensation was to ensure that the money was paid when the work was done, and that all the work necessary was done. We were all agreed about that. On the other hand, the National Coal Board said, with much reason, that this was a continuing liability which might go on almost for ever, involving, perhaps, very small sums for extra application of fertiliser or whatever it might be. The Board said that it would be put to great expense and inconvenience if, perhaps twenty years later, it still had to pay out a few shillings for compensation.

We have put a great deal of work into it. It was very difficult to find the right way out of the difficulty, but I think we have now reached a reasonable compromise in this Amendment. What it boils down to is that there will be, as it were, a guillotine which will fall after fifteen years, except in cases of compensation for subsidence. If subsidence takes place after deep mining, there is a continuing liability, and there seems to be no reason that the Board should not, however long afterwards, pay for subsidence which is clearly identifiable when there is no question of who is responsible for it. It is only fair that that should be so. For all other matters, there will come an end after fifteen years. Of course, the owner will obtain a rather larger sum in compensation, assessed by the valuer, when the Board gives up occupation, because any small sums which would hitherto have had to be paid to him will no longer be paid. The owner will not be damnified, therefore, but the Board will be saved a very great deal of more or less unknown liability.

The second point dealt with in the Amendment arises from an undertaking given at an earlier stage, and here I am sure that we shall have the agreement of hon. and right hon. Members opposite who raised the matter very strongly. We must, if we can, find some way to check the reasonableness of procedures which are intended to be carried out under a cost of works arrangement before they are started. This is to the advantage of both sides. We have found here, I think, a fairly ingenious and satisfactory way of dealing with that. When the Board receives a notice, it can send a counter-notice to say that it considers that the works proposed are unreasonable. If the parties cannot come to agreement, they may go to the Lands Tribunal. I am sure that this arrangement will be much more satisfactory to the Coal Board and to the owner, than leaving things as they were, when the owner went and did some work, having no means of knowing whether the work would ultimately be found eligible for compensation.

The third point dealt with is this. I did say that we would go carefully through the drafting of the old Third Schedule and make sure that there were no loopholes to enable quite unreasonable works to be done at the Board's expense. We have dealt with that in two respects. First, the Board can object now on the ground that certain works are premature. If a man really insists on doing some drainage works, and the Board simply says that it is a complete waste of money because what is done is bound to be broken in six months' time, that would be a sufficient ground for the Board to make objection. In all these cases, of course, the parties can go to the Tribunal if they cannot agree. We have then put in something which, I hope, will be a safeguard—it is really a matter of common sense—to provide that the Board can object if the expenditure is grossly disproportionate to the estimated additional value of the land. Again, the Lands Tribunal will be able to decide what expense is grossly disproportionate. We have always insisted that cost of works must not be limited to the amount that they add to the value of the land. That has been common ground between us from the start. Nevertheless, it may be reasonable to spend a certain amount in restoration and rehabilitation which will increase the value of the land. There must be some protection to ensure that ridiculous sums of money are not spent in making practically no improvement to the land at all.

I think that that explanation, broadly speaking, deals with the matters in this long Schedule, but, having to make three main sets of improvements, it was simpler to take out the whole of the old Schedule and insert a new one rather than table a series of Amendments. With that explanation, I hope the House will feel that the new Schedule is an improvement to the Bill.

Mr. Neal

There is a good deal in this long Schedule upon which I would not attempt to comment. The legal language is very complicated. Since we are in felicitous mood, however, I should like to thank the Parliamentary Secretary again for having included paragraph 11 in the Schedule. I think it was apt when the Parliamentary Secretary spoke about the guillotine falling at fifteen years, but there are exceptional circumstances where settlement takes place. Settlement takes place in deep mining when land has been restored long after the Coal Board has left the site. I am sure the farming community, in particular, will be apprised of the value of the Schedule in enabling them to claim after that period has expired.

Mr. A. J. Champion (Derbyshire, South-East)

I should like to ask the Parliamentary Secretary whether he consulted the interests concerned before finally deciding upon the form of the new Schedule. I am bound to say that I regard the Schedule as a great improvement upon the Schedule which has been excluded. I like the paragraph in the new Schedule which covers the fifteen-year period.

The only other point upon which I should like some assurance is this. Do I understand the Parliamentary Secretary to say that any settlement of the land after fifteen years—and I imagine that tile drainage will be most affected—will be covered by paragraph 11 (2)? If the hon. Gentleman can give me some satisfaction on that point, I shall be grateful.

Sir I. Horobin

I think that the hon. Gentleman need have no fear. The object of the new Schedule is to take away what would have been an unlimited liability, but if subsidence takes place, and always assuming that it is proved to be due to opencast mining operations, the liability to do cost of works restoration remains.

5.15 p.m.

Mr. MacDermot

I also should like to welcome the new Schedule which goes a long way to meet the major criticisms which we had to offer in Committee on the substantial changes which were made by the Government to the compensation provisions of the Bill. The new Schedule does not go all of the way, but it certainly goes a good deal of the way.

As the Parliamentary Secretary said, the new Schedule is inordinately long. I confess that I scrutinised it carefully to see whether I could find a way in which it could be shortened, but I found myself completely defeated. It is involved and very complicated. I think, however, that the Minister was justified in claiming that the provisions that have been put forward are ingenious and satisfactory. They are undoubtedly ingenious and I think that they cover all the reasonable contingencies in which the Board may want to lodge a precautionary objection to anything which the owner proposes to do by way of further cost of works. There is nothing to stop him doing the works, but he is put on notice and warned that if the objections which the Board might put forward are well founded he may not recover from the Board all, or in some cases any, of the cost of further works. If the owner does not like that, he can go to the Tribunal and get the matter cleared up before incurring the risk and expense of doing all those works. That is the major point which has been met.

There is one point of detail upon which I should be grateful for a little clarification from the Minister. I conceive that one of the most frequent sources of dispute between the Board and the owner will be when the owner sends his estimate of the cost of works that he is proposing to do and the Board says, "We have no objection to the works as such, but we think that your estimate is excessive". This point is referred to in line 22 of the Schedule. As I read the Schedule, that is not one of the circumstances provided for in the sense that the Board can issue a warning at that stage. I had thought of trying to draft an Amendment to cover the point, but the objection which would be raised by the Government—and it seems to me to be a formidable objection—is that it is impossible to litigate in advance what would be the proper cost of doing the work, Labour costs and prices of materials may change.

The point that I raise is this. The provision in line 22 which requires the owner before he does the works to let the Board have an estimate of the cost of work does not seem to be followed up anywhere in the Schedule. I can find no further reference to it. Am I right in thinking that once the estimate has been sent to the Board it can be buried and lost in the files of the Board and nothing further need happen about it at all? That would not be very satisfactory; and, as a matter of practice, if the Board does think that an estimate is excessive, will it give, as it were, unofficial warning and notice to the owner of that fact so that he will not be taken by surprise? Naturally, the owner would feel aggrieved if five years later the Board says, "We are prepared to pay compensation, but we think that your estimate is excessive and the cost of works done is excessive and we are prepared to pay only 80 per cent. of the sum that you are claiming."

I agree that this is not a matter which can be litigated in advance, but I think that it would be helpful if the Minister could assure us that it is the intention of the Board to make known its mind when it receives an owner's estimate of the cost of works.

Sir I. Horobin

I do not want to be dogmatic in my answer to the hon. Member for Lewisham, North (Mr. MacDermot). As I understand it, the original notice would contain an estimate. If the Board serves a counter-notice, as it can, saying, "This estimate is grossly disproportionate", that could be dealt with, but the Board will not pay until after the work has been done and it will pay only a proper amount. The Board would not pay upon receiving the estimate. The owner may say, "I propose to do certain works", and the Board would be perfectly entitled to say, "We think those works are unreasonable. Take it to the Tribunal." It would be open to the Board to say, "These works may have been all right, or at least the Tribunal held that they were, though we did not agree, but we are now going to say that we think you spent two or three times the proper cost." That, again, would leave it open either for the man to say, "I agree that it turned out like that, but I was anxious to get it done and I will not get all the compensation," or the matter can be referred to the Tribunal which will decide the proper cost. When the Tribunal decides the cost the estimate is irrelevant.

Mr. MacDermot

That does not meet my point. Perhaps I may put it a little clearer to the hon. Gentleman. The provision in paragraph 4 (c) for the Board giving a counter-notice that the estimated cost of the work is grossly disproportionate to any prospective increase attributable to the work in the value of the land is not the estimate of the cost of the work in line 22. It is quite a different thing. The estimate of the cost of the work in line 48 is defined in paragraph 6. It is a notional figure. I am dealing with the man's actual estimate. Even if the work is perfectly reasonable and its proper cost is not grossly disproportionate to any increase … in the value of the land he may have obtained an estimate to do that work which is quite excessive. The cost might be unreasonably excessive.

All I am suggesting is that as a matter of procedure if, when the Board receives the owner's estimate, it feels that it is an excessive estimate and is likely to lead, if the works are carried out on the basis of that estimate, to a dispute as to what is the proper cost, the Board should, as a matter of practice, give immediate warning of that fact to the owner.

Sir I. Horobin

I think the hon. Gentleman is right that, in fact, as a matter of administration it would be sensible for the Board to issue a formal warning of that kind. All I was concerned to show is that the Board would not be damnified by the fact of the estimate. It would be concerned with whether the work was O.K. and, when done, whether the cost was proper. I agree that it might be that the Board would be wise to say, "If you are doing this work, we do not object, but we informally advise you that this seems a quite absurd estimate for doing the work and, in due course, we may well challenge you." I think that is a matter best left for informal action between the two parties.

Question put and agreed to.