The Ombudsman's final decision:
Summary: The Council acted without fault in paying into the court fund compensation payable under a Compulsory Purchase Order when the claimant could not provide written evidence of ownership.
- In brief the complaint is when managing the payment of compensation under a Compulsory Purchase Order the Council failed to:
- Pay £94,000 compensation to the complainant when it compulsorily purchased his former home;
- Deposit compensation with the court funds office;
- Provide evidence it had deposited the funds.
The Ombudsman’s role and powers
- The Ombudsman investigates complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. She must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, she may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1))
How I considered this complaint
- In considering this complaint I have:
- Reviewed the information presented with the complaint;
- Put enquiries to the Council and studied its responses and
- Shared with Mr X and the Council my draft decision.
What I found
- In law a house or land can only be transferred by written transfer or conveyance. Unregistered titles must be registered when certain transfers take place. It is the duty of the person buying or receiving the land to ensure registration takes place at HM Land Registry.
- Councils may buy property by issuing a Compulsory Purchase Order and once confirmed issuing a Vesting Declaration that vests the title in the Council. Under Section 9 of the Compulsory Purchase Act 1965 the owner of any land which a council buys through a Compulsory Purchase Order (CPO) has a duty to show they have legal title to the property. If they fail a council may pay into court the compensation payable in respect of the land or the person’s interest in the land. Once paid into court management of the payment to any claimant falls to HM Court Service.
- On 16 December 2013 the Council issued a CPO for the purchase of Mr X’s former home. The Secretary of State confirmed the CPO on 26 June 2015 following a public inquiry and a report by the Planning Inspectorate. The Ombudsman may not challenge the confirmation of the Compulsory Purchase Order and so my investigation has concentrated on the Council’s decision to pay the compensation payable under the Order into court.
- When the Council issued its CPO on Mr X’s former home it offered him accommodation which he accepted in December 2015. Once the Secretary of State had confirmed the CPO the Council vested title in itself on 25 September 2015. That meant by 23 October 2015 the legal title passed to the Council. It sold the house at auction on 30 November 2015 for £94,000. After deduction of the Local Land Charges and the Council’s costs on sale that left a net sum payable to the original owner of £76,553.27. The Council paid this sum into the court funds office on 26 August 2016. Due to confusion in the court office on how to administer the payment into court the court did not issue the Certificate of Lodgement to confirm receipt of the payment until 17 January 2017.
- The Council wrote to Mr X on 25 September 2016 explaining what the Vesting Declaration meant i.e. that from 23 October 2015 legal title to Mr X’s former home would automatically vest in the Council. The letter advised Mr X to contact his advisers about claiming any items left in the property and on concluding negotiations for compensation.
Evidence of ownership
- Before the Council could pass the compensation payable to Mr X he needed to show he had owned the property before the Council issued its CPO. Mr X says he bought the house from his late father in 1987 but has not shown to the Council any conveyance to prove that. The sale in 1987 would trigger a duty to register title to the house at HM Land Registry. However searches of the Register show it is not registered at HM Land Registry. Without written evidence of ownership the Council could not pay out the compensation.
- The Council first asked Mr X to provide details of his ownership in July 2015. It recognises Mr X has physical and mental health problems and so referred him to several agencies which might assist him. The Council says Mr X has paid regular visits to its offices to discuss the compulsory purchase of his former home. He has met with officers from the Council’s Empty Homes, Housing Options and Legal Services Teams. The Council wrote to Mr X explaining he needed to provide proof of ownership and also explaining the alternative of paying his compensation into court. Once paid into court the compensation is managed by the HM Courts Service. That Service will pay the compensation to Mr X once he can show he has title to the property and so is entitled to the money.
- In a letter to Mr X of 15 August 2016 the Council explained the Council needed evidence he was the sole owner of the house. This followed a discussion with officers at the Council on 11 August 2016. The letter reminded him he had been advised to seek legal advice through a solicitor or Citizens Advice Bureau. The letter explained Mr X needed this evidence to claim the compensation from the court once the Council paid it in.
- The Council has a duty to satisfy itself the person claiming to own the property is the sole owner and that it can therefore release the compensation to that person. If not it must pay the money into court. It contacted law firms Mr X believed had acted for him to try and find documentary evidence but nobody presented any.
Communication with Mr X
- The Council says it wrote to Mr X following visits to the Council’s offices and he often collected letters from the Council’s offices. On 16 December 2016 Mr X collected a letter that enclosed copies of all the letters collected by him about the sale of his former home. The letter confirmed the Court Funds Office had sent it a form for completion which showed it had finally accepted the payment into court.
Delay in payments into Court.
- The Council faced delays because of problems within HM Court Service. It tried to pay in the money and did so but HM Court Service did not issue a certificate. It took from the payment in on 26 August 2016 until 17 January 2017 for HM Court Service to issue the certificate. There is no evidence of the Council being at fault for that delay and so Mr X would have to put any complaint about that to HM Court Service. The Certificate confirms the Council did pay the compensation into the court on 26 August 2016.
Analysis – was there fault leading to an injustice?
- The Council followed the correct procedure in asking Mr X to prove he had title to the house. That needed to be a written transfer or conveyance and despite enquiries made of several local law firms nobody could provide a record of that transfer.
- The Council met with Mr X to explain its position and the deductions made from the compensation. It explained in person and by letter that without evidence he owned the house it would pay the compensation into the court fund. After that, it would be for the court to decide if evidence produced by Mr X proved he had sole title and therefore solely eligible for the compensation.
- Naturally Mr X thought the Council had failed to pay the money into the court fund when it could produce no reference number or show evidence it had done so. The fault did not lie with the Council but with HM Court Service which eventually issued the reference number and Certificate in January 2017. That proved the Council had paid the money in to the court fund in August 2016, and now Mr X can make his claim for the compensation. The Council acted without fault in explaining to Mr X it had to pay the compensation into the court fund because he had not shown evidence title had passed to him.
Investigator's decision on behalf of the Ombudsman