Serving the Notice to Treat puts the onus on the owner to make the claim. The owner can after 6 weeks from the delivery of the claim force the matter to arbitration. The owner should take the advice of a competent valuer –who is usually a chartered surveyor.
Where a claim has been submitted in answer to a Notice to Treat the parties will generally enter into negotiations which in most cases will result in an agreement. Only where the parties do not agree will an Arbitrator be appointed. There has to be a dispute first.
The Property Values (Arbitration And Appeals) Rules set out the procedure for nomination of the Arbitrator. Any party affected by the acquisition may at any time after 14 days from the service of the Notice to Treat apply for the appointment – provided there is a dispute.
Where the Authority applies for the appointment, the Authority must publish on two successive weeks notice of the nomination and that the maps may be inspected at their office. There are particular rules governing the notice procedure which do not apply if the Arbitrator is nominated by the owner.
The Arbitration Acts govern the dispute except in so far as it is inconsistent with the statutory provisions under which the arbitration is taking place. Proceedings before the Property Arbitrator are similar to those in other arbitrations.
The arbitrator is limited to determining questions of compensation.
Questions of title are outside his jurisdiction and he must act on the assumption that the title claimed is correct. Any dispute regarding title must be determined in subsequent proceedings. He is not authorised to consider collateral questions.
The exception to the general rule, that costs are at the Arbitrator’s discretion relates to cases where unconditional offers of compensation are made or where proper claims are not submitted.
The Acquisition of Land (Assessment of Compensation) Act, provides
‘where an acquiring Authority has made an unconditional offer in writing of any sum as compensation to any claimant and the sum awarded by a Property Arbitrator to that claimant does not exceed the sum offered, the Arbitrator shall unless for special reasons he thinks proper not to do so, order the claimant to bear his own costs and to pay the costs of the acquiring Authority so far as such costs were incurred after the offer was made.”
It is not clear at what point the unconditional offer has to be made in order for this to apply but it is generally accepted that it can be made up to the date of the hearing.
It can be accepted by the owner at any time before the Arbitrator gives his award.
If the unconditional offer is not accepted, and the Arbitrator’s award does not exceed the offer, the Owner must bear his own costs and those of the Authority incurred after the date of the offer, unless the Arbitrator thinks that there are special reasons why he should not.
Costs incurred before the offer was made will be at the discretion of the Arbitrator – as will costs where the Arbitrator’s award exceeds the amount of the offer.
Where no offer is made or where the award exceeds the offer, it is normal for the Arbitrator to exercise his discretion regarding costs in favour of the owner – unless there are there are special reasons not to.
There is also a provision where the Owner may make an unconditional offer to accept a sum of compensation where he has submitted a suitably detailed claim. Similar principles apply with regard to costs here as where the Authority makes the unconditional offer.
There is provision for interest on the purchase money that is agreed or is determined by the Arbitrator from the date on which the Authority enters into possession to the date of actual payment of the purchase money.
The Property Arbitrator cannot award interest in respect of the period between the date of assessment of compensation ( i.e. date of Notice to Treat ) and the date of the award.
However, when the award determines the compensation payable, a contract is established between parties and the ordinary rules between the Vendor and the Purchaser apply, including the liability of the Purchaser in a proper case to pay interest on the unpaid purchase money. The courts have held that interest is payable at the commercial rate rather than the local loans fund rate. In the case concerned, the Authority did not take possession until after completion. Had they entered earlier, the local loans fund rate would have applied from the date of entry until the date when the sale should have been completed – after which the commercial rate would apply.
The decision of the Property Arbitrator upon any questions of fact is final and binding on the parties. However, there are certain grounds on which the validity of an award can be challenged in Court. If appropriate, the court will remit the award back to the Arbitrator.
Examples of grounds for remitting are;
- defect or error patent on the face of the award, for example, where it is ambiguous or uncertain or inconsistent with a term of the contract containing the arbitration clause.
- where material evidence which could not with reasonable diligence have been discovered before the award was made has since been obtained.
- where there has been misconduct on the part of the Arbitrator.
The court can set aside an award instead of remitting it, for example, where defects in the proceedings cannot be remedied.