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AN ARTICLE by Peter Scrafton FIRRV, FCIArb, MRSA(Hon) Solicitor (Non-Practising)

December 2018.

As I leave the Council of the Institute, a flurry of judgments and announcements has appeared; and so, although the events are in no way connected, I bring a few to you now, briefly. Gardner & Theobald LLP –v- Jackson (VO) [2018] UKUT (LC) 253 is covered elsewhere in these pages, and so:-

Store First Ltd –v- Moore (VO) 440523731554/257N 10

The issue was whether the self-storage facility should be entered as one hereditament or up to 1891 units at different material days.

The question was, according to the President of the Valuation Tribunal, whether the appellant was in paramount occupation of the whole building or whether there was multi-occupation in that, because of the particular way the leasehold arrangements existed, the individual unit owners might be said to be the occupiers by virtue of the fact that they held the implied right to quiet enjoyment. The alternative test was whether individual unit owners were free to deal with their units as they saw fit without regard to the wishes of the appellant, in which case each unit formed a separate hereditament plus comprising the common parts.

The Valuation Officer was ordered, in an interim decision, to enter each separate unit in the list as a separate assessment.

Delph Property Group Ltd –v- Alexander (VO) and Leicester City Council 246525454690/538N 10

This was a completion notice case in which the Valuation Tribunal President held that the tribunal has jurisdiction to hear appeals by way of proposal to delete on the ground that the hereditaments were incapable of occupation as no completion notice had been received, though all regulatory requirements must be met. No application for judicial review was needed.

If a completion notice was not served then, as a matter of law (applying Reeves (VO) v. VTE (and others) [2015] EWHC 973 (Admin) and UKI (Kingsway) Ltd v Westminster City Council [2017] EWCA Civ 430 then the appropriate course is to proceed by way of proposal to delete the assessment.

This again was an interim decision.

Ludgate House Ltd –v- Ricketts (VO and London Borough of Southwark 584026075915/537N10

This is a valuation tribunal decision on the boundary between domestic and non-domestic property in the case of a former office building occupied by “live-in guardians”, where the tribunal decided that on the material day the building was wholly non-domestic and that no allowance against the rateable value for disturbance was warranted. All parties agreed that the tribunal had jurisdiction notwithstanding judicial review proceedings pending before the High Court.

The use of property guardians is not uncommon and such measures have been adopted not least to prevent squatters from taking up occupation. However, this particular decision turned very much on its particular facts which required close examination of the contractual arrangements and physical circumstances. The issues were as to rateable occupation and the hereditament, whether any hereditament was domestic, non-domestic or composite, the non-domestic valuation and the effective date of the list alteration.

The tribunal determined that the guardians were in paramount occupation, but also concluded that neither the building nor any part of it was used wholly for the purposes of living accommodation and so concluded was that the property was wholly non-domestic. Because the Agency decided to treat it as a composite, it had contended for a lower valuation than would otherwise have been the case. The tribunal did not agree with the Agency's approach, but considered that it could not increase the composite assessment to a "full" non-domestic assessment due to material/effective date limitations.

R (Principled Offsite Logistics Ltd) –v- Trafford Borough Council and Others [2018] EWHC 1687 (Admin)

Principled Logistics have fought, successfully, several battles against different billing authorities which have failed to overturn their approach to obtaining rate relief by short term occupation. It was accepted that the transactions with owners were not a sham but Trafford did not accept that principled fulfilled the four “ingredients” of rateable occupation.

The authorities are reviewed, helpfully and repay reading, although the 19th and earlier 20th century judges were not required to consider rates avoidance. The modern cases on rates avoidance schemes – such as Makro, PAG Management Services Ltd and Rossendale – stand for the proposition that where transactions are genuine and mean what they say, their meaning and effect, and the general law, must not be distorted or manipulated in the name of morality, so as to prevent avoidance of rates in circumstances where the statutory provisions provide for no rates to be payable. If ethics and morality are excluded from the discussion, the thing of value to the possessor should not be the occupancy itself. The verb “occupy” and the nouns “occupation”, “occupancy” and “occupier” are, in the end, ordinary English words. Their meaning has developed case law to give them a sensible construction, but they have not been given technical statutory definitions. The judge found no concept within the meaning of the word requiring a purpose or motive beyond that of the occupation itself. The question is in each case whether the four elements in the John Laing case are present. The third is sufficiently present where the intention is to occupy for reward, without any further commercial or other purpose.

Home Office –v- Jackson(VO) [2018] UKUT 0171 (LC)

The assessment of the Home Office building in Marsham Street was before the upper tribunal. There was no point of law involved and the issues of valuation were pretty straightforward. It was the sort of case which, in times past, would probably have been settled by consent; but it ran the distance. There were four issues; and the assessment was reduced from £24,960,000 to £22,700,000 with effect from 1st April 2010.

In relation to the base price the best comparable was Cardinal Place in Victoria Street at £630psm. The ratepayers sought a 12% deduction for inferior location in Marsham Street but the Valuation Officer contended for no deduction. The tribunal preferred the ratepayers’ approach but adjusted some of the analysis, determining a 10% deduction from Cardinal Place (£567psm).

The ratepayers contended for a 25% quantum allowance in line (they said) with the MoD building and Broadcasting House. The VO contended for 17.5% being the maximum on his Westminster quantum scale. The tribunal held that this was a matter for individual judgement and found for 20%.

Fragmentation was the ratepayers’ next contention as it sought 2.5% in line (so the argument went) with other allowances for linked buildings in Victoria. The agency opposed this completely as the layout offered improved security and daylighting, the tribunal gave no allowance on this point finding that the bridge links were substantial and the improved daylighting offset any disadvantages.

Finally, the Agency sought an addition for the high level of security equipment installed. The ratepayers argued successfully that this point had not been pleaded and not supported by any evidence and the tribunal agreed. The tribunal also held that the equipment detracted from the quality of the reception area, which was inconsistent as the Agency’s case that this was a prestige building.

Re the Appeal of Benchmark Furniture Ltd [2018] UKUT 1070 (LC)

This was an appeal against a decision by the Valuation Tribunal for England, refusing to reinstate proceedings which it had struck out following the appellant’s failure to file a statement of case. The respondent was the Valuation Officer, who considered that, in view of the subject matter of the appeal he could not usefully participate, and the appeal, accordingly, proceeded unopposed.

The Lands Chamber considered Practice Statements A7 and C2. The ratepayer never received the listing notice from the valuation tribunal and argued that the notice was sent to the wrong address. The Lands Chamber held that an appellant can only fail to comply with a decision with a direction of which it is aware.

The lower tribunal failed to consider the appellant’s argument that the notice had not been delivered to the correct address and the upper tribunal held that it was not enough for the lower tribunal to be satisfied that the standard directions and the notice of hearing had been addressed to the appellant’s head office: it was also necessary to consider whether the evidence proved that the directions had not been delivered. There was no proper consideration of the appellant’s case which was an essential prerequisite of the lower tribunal decision to strike out. It was not open to the lower tribunal to rely on statutory deemed service also, without dealing clearly with the appellant’s attempt to prove that service had not occurred. The appeal was allowed. 

Customer Service Compensation Decision

This is a decision by the Inland Revenue Adjudicator’s Office dated 11th June 2018 awarding costs to Spirehead Properties Ltd following the misapplication by VOA of the guidance in their code of practice on complaints. The HMRC manual was also considered by the Adjudicator.

The Agency was recommended to reimburse to the applicant professional fees incurred as a result of a mistake made by the Agency when originally it banded the property too highly. The Agency initially resisted the application; but the Adjudicator took the view that costs incurred as a result of an Agency mistake were not a “normal cost” of dealing with the Agency.

The Agency acknowledged that they did not handle the complaint well at Tier 1 of their complaints process because they did not identify their mistake in the banding if the property. At Tier 2 they apologised for their mistake and their poor complaint-handling; but they did not then recognise that their guidance allowed them to reimburse such professional costs.

There have also been several pronouncements of pending law reform by the Law Commission which will be of interest to valuers, in particular, and so perhaps these will be covered in a later edition.

Peter Scrafton

©J.P. Scrafton, 2018

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