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A PAPER by Peter Scrafton FIRRV, FCIArb, MRSA(Hon) Solicitor (Non-Practising)

May 2011.





All of the powers of government stem from the constitution of the state, whether that constitution be written, as in most cases, or unwritten as in the case of the U.K. Those powers have to be exercised in a constitutional manner, and it is useful to introduce, at the start, an important doctrinal concept; namely, that of the doctrine of the separation of powers.


Imagine that the constitution is a stool, upon which sits the nation and all that goes with it. That stool has three legs, which are, respectively, the legislature, the executive and the judiciary. Each leg has to be independent, but without the presence of all three, taking equal strain, the stool will become unstable. You can then imagine how easy it would be for the state to fall into anarchy.


There must, therefore, be a system of checks and balances, which seek to ensure that each of the three branches of government is independent of the control of the other two, but at the same time, it cannot operate on its own, without the other two.


Bearing that in mind, it is appropriate to tackle the position in the constitutional framework of a property tax appeals system.


Why have a property tax at all? One must remember that the value of the land within the boundaries of a state is a tremendous resource: ownership or occupation of land is a measure of wealth; and as the value of land rises, whether or not it is improved, however it is used, it will have a value to its owner or occupier, and thus is a legitimate source of revenue.


For the purpose of this paper I will assume that the legislation covering assessment to the tax, and also the administration and collection of the tax, are already in place.

The Position of the Appeals System

In a slightly different sense, we have a need for a three-legged stool here, also, as the taxpayer finds itself between the Scylla and Charybdis (the clashing rocks at the end of the ancient world) of assessment and collection.

Assessment or Valuation

Whether by established valuation methodologies, by CAMA or by a wet finger in the wind, the tax base must have a taxable value attached to it. The measure of that value is another matter, which calls for separate and detailed consideration. It must be remembered, though, that whatever route is taken, value is always a matter of opinion, and not of fact, or law.


Things can go wrong in the assessment process: there can be poor information for the valuer, or incorrect information, or insufficient information. Errors can occur in the office. The property can be overvalued, or underassessed.

Administration and Collection

The principal concern of the taxpayer will be to see that it is correctly billed and required to pay at the appropriate time. Again, things can go wrong. Has the correct taxable value been applied? Have all exemptions and reliefs been taken into account? Are the computations in the bill correct? Is the bill in all respects lawful? While the collecting authority must be entitled to judicial assistance in order to recover tax which is properly due, equally, taxpayers must have the right to challenge a bill which they feel is inaccurate.


There can also be instances, admittedly likely to be less frequent, when a taxing authority decides to include in its property tax an element which is unlawful.


Any system of taxation, in order to be workable, has to be seen to be fair. If the public feels that the amounts charged are excessive, then they have to have the right to object to their own assessment, and to force the taxing authorities to justify the amount sought to be levied. Equally, the taxing authorities must have the right to correct errors and to enforce collection of tax properly due.

The Role of the Courts and Tribunals

The courts and tribunals have an impartial and a dual role. They are there to see that the taxing statutes are enforced fairly, and to seek to ensure that no one pays any more or less than they are obliged, by law, to pay. To that extent, they are there to defend the taxpayer from the executive, while at the same time enforcing collection of taxes properly charged against taxpayers, to the benefit of the executive, as prescribed by the legislature.


As far as the inter-relationship with the legislature is concerned, while, constitutionally, the legislature is usually the supreme law-making body, the provisions of the laws which it passes may be challenged in the courts, and declared unlawful if they are not within constitutional powers.

The same applies to executive acts by ministers, or to the acts of the public service, whether national, regional or local. If an action is not carried out in accordance with statute, then that act may be struck down.


It follows, therefore, that the judges must be, and must be seen to be, completely independent of the other two arms of government, when acting in a judicial capacity.

Development of Case Law

As the judges decide cases on individual sets of facts, they apply law and interpret the law so as to discover what the legislature intended when it passed the relevant statutes. Gradually, a body of case law builds up and is of assistance to practitioners in deciding what particular provisions mean, and, therefore, whether it is necessary, or desirable, to bring further litigation. That body of precedent may, or may not, be binding.

Independence of Appellate System from Taxing Body

It is a constitutional imperative that the appeals system be, and be seen to be, independent of the body creating or imposing the tax.

The Principle of Acceptability

The principle of equal treatment under the law to be applied by the Courts, applies not only to taxation but to all laws. It can be viewed as an application of the concept of legality, under which the law must be applied without exception to all those in the same circumstances. It has two meanings, one which is essentially procedural and the other which is substantive.


The procedural meaning is that the law must be applied completely and impartially regardless of the status of the person involved. This means that no-one may receive either preferential or discriminatory treatment in the application of the law or may be denied procedural rights to challenge application of the law to him or her.


The substantive meaning of the principle of equal treatment starts from the position that persons in equal circumstances should be treated equally. Without clarification, this principle does not mean very much, because it admits that people who are not in the same circumstances can be treated differently. Therefore the question becomes whether laws are prohibited from using certain criteria to discriminate between persons. While the list of prohibited criteria differs between various jurisdictions, they usually include ethnicity, religion and gender.


The exact application of this prohibition against discrimination in a particular country will depend on first, whether the courts are competent to strike down legislation as unconstitutional and, second, what kind of discrimination is prohibited under the constitution.

The Principle of "Fair Play"

The principle of fair play or public trust in the tax authorities is slightly different. It means that such authorities must not be allowed an unfair advantage in their dealings with taxpayers.

Application of this principle suggests that, first, the authority must notify a taxpayer of any action the authority may take relating to that taxpayer, second, that during litigation a taxpayer must be afforded all the rights of process allowed to the authority and, third, that the authority must be bound by its interpretation of the law as applied to a taxpayer's particular situation. In most countries these rules of fair play are part of the general administrative law.


However, exceptions to these rules can be made when fair play does not suffer as a result. For example, an authority may take action without notice if it reasonably suspects that the taxpayer would destroy evidence or flee the jurisdiction.

Structure of Appeals System


Informal review – It is desirable to have a process whereby if an assessment is objected to, it can be dealt with without recourse to a court or tribunal. If there is a clerical error, then the assessing officer or body should be able to rectify this, and there should be time for negotiation and settlement by agreement.


Summary appeal body – Quite a few appeals will be resolved at the informal stage, and many others may also be resolved by discussion when it is known that an appeal hearing is pending.

The description of the initial appeal body as “summary” should not be mistaken for “rough”. What is meant here is that the job is done on a local basis. There is a great deal of virtue in a system which allows for cases to be heard by a person or body familiar with the area and perhaps with the people in question. If the summary appeal body is not the local magistrate, suitably trained, then it may be that it is a tribunal of three unqualified people, assisted by a suitably trained clerk. That clerk might, for example, be a suitably trained local lawyer who could operate the office from his own professional premises, or if size permits or dictates, then there could be an office with a clerical staff with the professionally trained person at the head of the office sitting in court with the members of the lay tribunal and advising them.


Further appeal body – While the summary appeal body would be essentially a local affair, the further appeal body would be regional or national, and it may be that, if cases are to be reported for use as precedents, then they could be reported at this level. It is important to ensure consistency of treatment of similar cases throughout the country. As the system becomes based on value rather than indices or other factors, it is at this level at which the trained valuers should first be introduced to sit in a judicial capacity.


Statutory control – All of these bodies will of course be established by statute, which will confer their respective jurisdictions upon them. They will only be able to act in accordance with their jurisdiction and their actions will susceptible of appeal if they stray outside that jurisdiction. It follows of course that, when the structure is being established, great care must be taken to ensure that the jurisdiction conferred upon the appeal structure is sufficient to deal with the tasks which the system is to be required to discharge.


Procedure on Appeals

These again are matters which may conveniently be dealt with, if constitutionally possible, under powers delegated by the legislature to Ministers, in order to avoid taking up the time of the legislature on less important matters, and in order to give a degree of flexibility to permit amendments with relative ease, when it is perceived that change is necessary. Matters of case management can sometimes be dealt with by the judicial body itself, by promulgating what may be called Practice Directions, Practice Statements or Local Rules of Court.


Hearing of appeal – Mention has already been made of the need for rules of procedure for the processing of appeals to the stage before they reach trial. It is appropriate here to consider for a few moments matters of pleading and interlocutory procedures such as time limits and enforcing these, and procedural devices to ensure that each party to an appeal sets out clearly the essential elements of his case, so that the other may know how to meet it.


Rules of evidence – Consideration will have to be given as to the degree of formality of any hearing. Before the summary appeal tribunal, it may be that most of the formalities can be dispensed with, although that tribunal should at least expect the parties to have discussed the case in some detail before it gets to court. At the higher level, where a case may be reported as a precedent, the necessity of getting the full facts out and ensuring that the case is fully argued, is greater, and it may be felt therefore that a greater level of formality is justifiable. It should be remembered, however, that, as individual national systems move towards value bases, then much of the evidence to be given by witnesses will be given by experts acting for the different parties, and suitable latitude will have to be allowed in the application of those rules of evidence to allow evidence of opinion to be admitted – for the evidence of experts is essentially that of informed opinion based upon knowledge of the full relevant facts.


Agreements – There should be nothing in the appeal system to prevent an appeal from being compromised, at any stage, either by agreement or by withdrawal.


Arbitration – If the parties choose to, they may select the appellate tribunal to be the arbitrator of the dispute, and to be bound irrevocably by the decision of that tribunal. It may be appropriate to confer such a jurisdiction, particularly if the tribunal is to have a function in other areas in which the valuation of land is relevant, such as compulsory purchase, capital gains, inheritance tax, rent reviews or participation in the urban planning process by determining compensation for the revocation or discontinuance of a planning permission. In the case of land tax, however, the government side may well be unwilling to be bound by an arbitration award, so both kinds of jurisdiction should be available.

Assimilation of the Appeals System with the Legal System

The appellate structures described have the waters of law and valuation flowing through the same channel. There has to be a last resort, however, and it is suggested that the further appeal body should be the final court or tribunal of appeal as far as matters of fact and valuation are concerned. Subject to individual or national rules, however, an appeal might go forward to a higher court, perhaps the Supreme Court, on a point of law only. Again, the way in which this is done would have to be a matter for individual national tailoring, but one way of informing the higher court of matters of fact and valuation would be for the relevant notice of appeal to have annexed to it (among other documents, such as skeleton arguments or briefs) a copy of the written reasoned decision of the further appeal tribunal, which will set out matters of fact and valuation, sufficient to demonstrate the route taken by the further appeal tribunal to reach its decision.



The title of this part of my paper should not be taken in any way so as to imply that anything in the preceding part is in any way less than fundamental. Rather the first section should be considered to be the foundations, and this part the bricks and mortar. When establishing an appeals system for the property tax, it is necessary to consider the establishment of the back up to the judiciary, or to those sitting in a judicial capacity.


Is the administration of the appeals system to be handled centrally, or locally? The answer, in each case, may depend upon individual structures of administration, and the answer may also vary, according to the number of tiers of appeal bodies there are going to be, and where they are to be located. Is it to be under the control of the Ministry of Finance, the Ministry of Justice or the Ministry of the Interior? All public service departments, as far as their administration is concerned, should be politically accountable.


The answer ought to be that the overall administration should fit the appellate structure and should be readily comprehensible to those using the system. Local problems require local solutions; and just because such-and-such a country deals with a particular problem in a particular manner, does not mean to say that every country should tackle it in the same way. To follow that path can all-too-easily make the original problem worse.

Resource Allocation

In order to function properly, an appeals system must be properly resourced, financially, as must any other system. A balance must be struck between the need for economy and the need to ensure that the system operates fairly.


Human Resources – The system must be suitably staffed by an appropriate hierarchy of people qualified to deal with the administration of a legal or quasi-legal system. This falls into two categories, the administration of the office, and the administration of the cases in the appeal system.


Procedures – Dealing first with the appeals themselves, the function of procedures should be to see that cases move smoothly from their inception to their disposal, that the issues between the parties are defined, that the case is allocated to a judge and that a date is fixed for a hearing. That hearing, and its subsequent decision, should take place at minimum cost to all parties, and the procedure should contain extensive powers requiring agreement on matters of fact, exchanging reports, agreeing photographs, plans and so on, so that all parties know in detail, before the trial, the case which they have to meet in adequate time to enable them to prepare for it. One of the tasks of the administration is to enforce procedural control, subject to judicial oversight.


Hardware, software, document retrieval – The administration of the system must be properly managed. As the parties to cases will be bringing in their pleadings and, possibly, valuations, in addition to other statements and papers, it is unreasonable to expect everything to be computerised. This means that the administration procedure must have an adequate file tracking system, and a system for bringing matters forward for the consideration of the administration, perhaps when time limits for filing documents expire, and nothing has been done by the parties. Ultimately, perhaps, file tracking and the statistical matters as well as allocation of court time, and records, can be dealt with on a computer system. It is probably a good idea, when computerisation is suggested, to wait to see how the system develops before seeking to acquire a suitable system.

Human Resources

Recruitment – Circumstances will vary from country to country, of course, but it will probably be appropriate to recruit for the appellate administrative structure mainly from municipal and from central governments. Differing levels of academic attainment will be required, from those who undertake clerical duties, to those who are to fill the senior administrative posts and possibly to serve as clerks to tribunals or as minor judicial officers in second tier tribunals.


Training – All will need training, according to grade. The system will have to be designed in sufficient detail to enable this to take place, ensuring a core of common material, as well as matters which are job specific. Inevitably there will have to be some overlap as those in higher grades cannot be expected to give proper supervision unless they understand themselves properly the tasks set to those below them. Those dealing with the public should be sufficiently conversant with the appeal system to be able to inform those making enquiries, but care should be taken to ensure that officials are restrained from giving anything resembling professional advice to litigants, for to do so would be to threaten the impartiality of the system of a whole.

Those fulfilling judicial functions will require special training. Dependent upon how the system in each country is to be established, and the basis of the tax to be imposed, that training will have to be structured. It may be decided that the ordinary courts are to deal with appeals. For so long as the system does not involve any element of valuation, then it may be possible for the existing judiciary to deal with cases. However, to the extent that the system evolves into a value based system, the appellate structure will need to be a meeting place of the professional disciplines of law and valuation, and the judiciary will have to be trained accordingly. It may be desirable, and ultimately necessary, for judges to sit with trained valuers and assessors, or indeed for trained valuers to sit in a judicial capacity – provided of course that they have access to sufficient legal training.


Qualifications – All staff should be encouraged to obtain qualifications. While these are not necessarily a guarantee of ability in any particular area, they are an indicator both to promotion boards and to the public of the commitment of the individual and of their own interest and abilities in their own job.


Professional institutes – These are developing in the emergent democracies and a close association between the appellate system and the institutes is to be encouraged. If the judges and minor judicial officers are members of the different Institutes and, as years go by, practitioners appearing before the courts also have the same qualifications, then communication between the judiciary, the appellate system and practitioners will be much closer than otherwise would be the case, and it would be possible for discussions to be held, whether formally or informally, to ensure the improved working of the system.



England and Wales

Appeals against valuation and collection are dealt with, completely separately


Collection appeals are dealt with, principally through local magistrates’ courts. The procedure is so simple in the bulk of cases that the municipality does not have to be legally represented, but can send an official, duly authorised, to deal with such cases. More complicated cases are dealt with, with legal representation and expert witnesses, if needed, and appeals on a point of law only may go to the High Court


Valuation appeals are started by notice, and there is time for discussion between the Valuation Office Agency and the taxpayer. If there is no agreement (and the large majority of appeals are resolved this way) then the matter proceeds to a Valuation Tribunal, a first tier tribunal in which the majority of members are laymen. This tribunal has been subject to major structural changes, of late.


Further appeals in relation to domestic property go to a single judge of the High Court, on a point of law only, but non-domestic cases go to the Upper Tribunal (Lands Chamber), where it is possible for cases to be argued by way of a complete re-hearing. Again, there have been structural changes, recently.


From the Lands Chamber (or the single judge in a domestic case) appeal lies to the Court of Appeal and thence to the Supreme Court. In all valuation cases, permission is needed to move from one level to another, either from the tribunal whose decision it is proposed to appeal, or if permission is refused, from the tribunal to which it is proposed to appeal.




This system seems to be an amalgam of English principles with American practices, perhaps not surprisingly. Valuation and collection appeals have separate appeal routes, collection disputes being referred directly to the City Treasurer, and valuation cases going (with separate streams for domestic and non-domestic properties) first for administrative review and then upwards to an appeal process. Those appealing non-domestic cases can bypass the administrative review process.



These jurisdictions are Roman-law based, (as indeed is the Scots system, which is based on Romano-Dutch law). The other jurisdictions mentioned in this paper are based, wholly or in part, on the Common Law of England. It is fair to say that each root has borrowed freely from the other, as a need to do so has been perceived. That I am not spending time on these must not be taken as a slight upon their worth, although it has to be said that, in many Western European countries, the yield from the property tax is small, compared with yields in the US and in the UK.

The procedure starts (apart from in France, Ireland and UK) with a more or less formal administrative review, before proceeding into the Court system.


The further East one travels, to the former socialist countries, the greater has been the influence of the outside advisers invited in to assist by the various international agencies.



Cobb County, Georgia

A new law requires tax bills to be posted, annually, and there is an annual right of appeal. If there is an appeal outstanding, a 15% reduction in the tax payable will be granted, pending the resolution of the appeal.


Board of Tax Assessors reviews papers and may make a decision or, at the taxpayer’s request, forward the papers to the Board of Equalisation which will hold a formal hearing, unless the taxpayer has opted for arbitration (which may or may not be agreed to be binding).


If the property has a value in excess of US$1M, then the taxpayer can bypass both the Board of equalisation and the arbitration process, and ask for a Hearing Officer to be appointed.


If there is dissatisfaction with any of the processes outlined above, the case may go to the County Superior Court, for a jury trial.

Cook County, Illinois

Board of Review Commissioner touting for business!


Placer County, California

Proposition 8 gave all real property owners the right to appeal their property tax assessments for the year of appeal and the future, by reason of the severe drop in real property values.


Appeals are to the Assessment Appeals Board, which acts in a quasi-judicial manner, takes evidence under oath and whose decision is final. There are comprehensive local rules governing procedure, generally, including admissibility of evidence and rights of audience. Ample time is given for filing papers. The parties are the Applicant and the County Assessor.


Note that the Board has jurisdiction, whether or not an appeal has been made in respect of such part, to alter the assessments of unappealed parts of the assessed unit, if it feels such a course to be right.




The world’s biggest democracy loves debating, and has many problems in relation to its property tax systems. Determined efforts are being made to turn things round and bring them up to international standards. These efforts have less to do with poor appeals systems per se but with cumbersome administration, persistent abuses by taxpayers and certain legislative difficulties.



This country has emerged from a command economy with no history of real property individual ownership within living memory, and has move through a series of transitional stages until, in 2008, it was set to establish an ad valorem property tax proper, with the tax rate set locally (within limits) by the municipality, independent of the Cadastre (which undertook valuation and had perhaps the hardest task of all) and the central government ceasing to benefit from the property tax. A tax system was being established to match the endeavours of the other legs of this particular three-legged stool.


Although one which I have used before, I am not afraid to repeat the importance of the three-legged stool analogy. It is one thing to have a fine set of property tax laws; but the rights of the citizen must be entered in the balance as well, as taxation is for the benefit of a taxpayer’s community, including that individual taxpayer. If the tax is not considered politically acceptable to the populace, civil unrest may follow; and it is therefore of paramount importance that there be a strong and effective appeals system in order to ensure fairness and acceptability within the law.


Who has the “right” appeal system? I say again “Local solutions for local problems”. Nobody can say that one system is inherently better than others: I have pointed out defects in the English system – but that very system is continuing to evolve, as are other systems: whether they produce the right answer in any case, only time will tell.


©J.P. Scrafton, 2011

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