England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM APPEAL TRIBUNALS
(LANDS TRIBUNAL)

		Royal Courts of Justice Strand, London, WC2A 2LL Thursday 15th February 2001

LORD JUSTICE ROBERT WALKER:

Introduction

1. These appeals raise an issue of general importance in the valuation of property for the purposes of non-domestic rates. They are appeals by the Valuation Officer (Mr R F Williams) from a decision of the Lands Tribunal (Mr George Bartlett QC President, and Mr P H Clarke FRICS) made on 8 March 2000. The Lands Tribunal allowed appeals from decisions of the Buckinghamshire Valuation Tribunal made as long ago as 18 November 1993.
2. The decision of the Lands Tribunal determined two separate appeals relating to two units in the covered shopping centre in Central Milton Keynes, Buckinghamshire. One unit is the Rose and Castle public house at 122 Midsummer Arcade occupied by Scottish and Newcastle Retail Limited ("Scottish and Newcastle"). The other is the premises known as City Duck and City Fayre (consisting partly of a public house and partly of a licensed cafe-bar) at 44 Midsummer Arcade occupied by Allied Domecq Retailing Limited ("Allied Domecq").
3. The two units have full on-licences for the sale of intoxicating liquor. They share the characteristics (relevant to the main issue in this appeal) that their basic construction is similar to that of other units in the shopping centre which are let as shops, but that the rents which they command as licensed premises are a good deal lower than would be commanded by shops in the same position. Shop rents in the shopping centre have risen steeply but public house rents have not.
4. The essential difference between the parties is whether these two sets of licensed premises ought (as the Buckinghamshire Valuation Tribunal decided, and as the Valuation Officer contends in this court) to have been valued so as to take account of their more lucrative potential as shops, or ought (as the Lands Tribunal decided, and as Scottish and Newcastle and Allied Domecq contend in this court) to have been valued simply for what they were. That way of putting the issue oversimplifies a complex matter on which this court has had the benefit of a careful and thorough decision of the Lands Tribunal, examining case law going back to the eighteenth century. But it gives a general indication of the difference between the parties.
5. What is at stake has been quantified in money terms by agreement between the parties, and the difference is striking. It was agreed that if the Valuation Officer's contentions were fully upheld the rateable values ought to be £132,000 for the Rose and Castle and £210,000 for the City Fayre/City Duck. If on the other hand the ratepayers' contentions were fully upheld the values would be £29,500 and £50,000 respectively. The former values were adopted by the Valuation Tribunal. The latter values are adopted in the orders of the Lands Tribunal now under appeal.

The facts

6. There was no dispute as to the primary facts and they are clearly set out in the statement agreed by the parties, and at paras.154 ff of the Lands Tribunal's decision. What follows is a brief summary. The Lands Tribunal was concerned with proposals made on 14 August 1990 in relation to the Local Non-Domestic Rating List for the Rating Area of Milton Keynes, for which the antecedent valuation date (explained in para 20 below) was 1 April 1988. Since then various changes have taken place (especially in relation to the City Duck premises) but those recent changes can be disregarded.
7. The covered shopping centre was opened in 1979. It contains about 100,000 square metres of enclosed retail space let by Milton Keynes Development Corporation to about 160 traders. These include major retailers (such as Marks & Spencer, Boots, W H Smith and British Home Stores), financial institutions and restaurants and cafes. The development is linear in shape with two parallel raised roadways (Silbury Boulevard and Midsummer Boulevard) on either side of the development and within it two parallel covered pedestrian ways (Silbury Arcade and Midsummer Arcade) running along its length, connected by several lateral walks. The Rose and Castle and the City Fayre/City Duck premises both have frontages to Midsummer Boulevard and Midsummer Arcade, and one open side elevation (on to Market Square and Borough Walk respectively).
8. The shopping centre is of steel frame construction, on two storeys, with reinforced concrete floors. Most of the dividing walls are non-load-bearing. Each of the licensed units has its trading space on the ground floor (about 222 square metres in the case of the Rose and Castle and about 311 square metres in the case of the City Fayre/City Duck) and a smaller area (including chilled cellarage, wine and spirits store, and offices) on the first floor, with access from the roadway.
9. The shopping centre is open six days a week, closing at 6.30pm on Monday, Tuesday, Wednesday and Saturday and at 8.30pm on Thursday and Friday. The licensed units do not therefore stay open as late as an ordinary public house.
10. Each unit is let for a term of years with full tenant's repairing and insuring covenants, and with five-yearly rent reviews. The Rose and Castle was let in 1988 for a term of 35 years from 1 October 1979. The rent on review from 1 October 1989 was £32,000 a year. The permitted use is "as a public house with facilities for the service preparation and consumption of food".
11. The City Fayre/City Duck was let in 1983 for a term of 25 years from 1 July 1979. The rent on review from 1 July 1989 was £48,000 a year. The permitted use is "as a fully licensed public house and wine bar/coffee shop with or without provision for the sale of food".
12. The Rose and Castle was described in the 1973 valuation list as 'public house and premises', and the same description appeared in the 1990 list. The City Fayre/City Duck premises were described in the 1973 valuation list as 'public house, wine bar and premises', and the same description appeared in the 1990 list in its original form. The Valuation Tribunal changed the description to 'cafe, public house and premises'. In the decision under appeal the Lands Tribunal again changed the description to 'public house and licensed cafe bar'.
13. The Lands Tribunal's findings as to the physical state of the premises are set out partly in paras 154 and 155 of the decision and partly in the discussion and conclusions in later paragraphs. Both premises are fitted out with bars, food serving areas and kitchens; and the Rose and Castle has a raised floor over most of its ground floor area. Both premises have hoists communicating with the chilled cellarage and storage on the first floor. The parties agreed that the cost of works to strip out all the specialised fittings, so as to restore the basic shell, would be £23,595 for the Rose and Castle (or £20,407 if the raised floor were retained) and £26,050 for the City Fayre/City Duck.
14. The Lands Tribunal considered (para 171) that it was not useful to distinguish between structural and non-structural works which might be undertaken by a hypothetical tenant who wished to use the premises to the best financial advantage. It asked itself, as a question of impression and common sense, whether the works which such a tenant would undertake could reasonably be described as minor works, and concluded (para 173) that the works would not be minor works, but substantial works.
15. In para 190 of its decision the Lands Tribunal summarised its conclusions as to the principal characteristics of the premises:

"The Rose and Castle is a typical public house. On the ground floor is a saloon bar with a food servery, kitchen and customer toilets. The bar has a traditional bar counter where alcoholic and non-alcoholic drinks are served and an adjoining food servery selling typical pub food. There are several entrances to the bar and servery. There are the usual bar stools and tables and two gaming machines. On the first floor the floor space has been divided to provide chilled cellarage, wine and spirits store, office, plant room, staff toilets and storage. We find that the principal characteristic of the use is the sale of alcoholic and non-alcoholic drinks and food for consumption on the premises. The City Fayre/City Duck has slightly different characteristics. It has a composite use. On the ground floor part is a typical public house with bar and tables and three gaming machines and part is a licensed self-service cafe/bar. The kitchen and customer toilets are common to both uses. The first floor, like the Rose and Castle, has been divided into similar ancillary accommodation. As with the Rose and Castle the principal characteristic of this use is the sale of alcoholic and non-alcoholic drinks and food for consumption on the premises."

The Lands Tribunal concluded (para 191) that these uses are distinct from those of a shop or restaurant, notwithstanding that these uses are all within classes A1 and A3 of the Town and Country Planning (Use Classes) Order 1987 (referred to in para 23 below).

The statutory provisions

16. The law of rating is statutory and ancient, going back even before the Poor Relief Act 1601. Apart from comparatively recent upheavals ( in the form of community charge and council tax) in relation to residential property, the body of statute law has shown extraordinary stability. That is evidenced, for instance, by the fact that the Poor Relief Acts of 1601 and 1743 and the Poor Rate Act 1801 were not repealed until the coming into force of the General Rate Act 1967 ("the 1967 Act"), which was itself a consolidating statute. This slow and steady process of evolution means that there is a large volume of case law, some of it quite old, which is still relevant to the understanding of the principles underlying the modern law.
17. One such principle, of central importance to this appeal, is the principle or rule of rebus sic stantibus, a Latin phrase (in the ablative absolute) the approximate meaning of which is "things standing thus" or "as things stand". The Latin phrase tends to conceal the question of what things (res) are included within its scope, but it is generally regarded as having two limbs, physical state and use. The principle was stated as follows by the Lands Tribunal at the beginning of its decision:

"Under the law of rating it is established that every hereditament must be valued (on the basis of an assumed tenancy from year to year) taking account of its existing use and physical state. The requisite assumptions as to use and physical state comprise two limbs of what is known as the rebus sic stantibus rule."

The first reported case in which the principle was identified by the Latin phrase may have been R v Fletton Overseers (1861) 3 E&E 450, 465. The ratepayers' case is that the principle has now been expressly incorporated into statute law by provisions in Schedule 6 of the Local Government Finance Act 1988 ("the 1988 Act").

18. Non-domestic rating is governed by Part III (sections 41 to 67 and Schedules 4A to 10) of the 1988 Act as amended. Sections 41 and 42 provide for the valuation officer to compile and maintain local non-domestic rating lists. The first list was to be compiled on 1 April 1990 and subsequent lists were to be compiled at five-yearly intervals. The list must show (with certain exceptions which are not now material) every relevant non-domestic hereditament in the authority's area ("hereditament" being defined, largely by reference to earlier law, in section 64, and "domestic" property being defined in section 66). The list must contain a description of the hereditament (section 42(5) and regulations made under that subsection). Liability to pay non-domestic rates depends primarily on rateable occupation of a hereditament shown in a local non-domestic rating list in force for the year in question (sections 43, 45 and 65).
19. Rateable value is regulated by Schedule 6, as incorporated by s.56(1). The central provision is in paragraph 2(1) of Schedule 6:

"The rateable value of a non-domestic hereditament [ ... ] shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year if the tenant undertook to pay all usual tenant's rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command that rent."

This formula can be traced back, with only minor changes of language, to the first section of the Parochial Assessment Act 1836 (the purpose of which was "to establish one uniform mode of rating for the relief of the poor"). By the second half of the nineteenth century courts were regularly referring to the 'hypothetical tenant' posited by the statutory test (see for instance Great Eastern Railway v Haughley (1866) LR 1 QB 666, 679; London County Council v Churchwardens of Erith [1893] AC 562, 588). In Townley Mill Co (1919) Ltd v Oldham Assessment Committee [1937] AC 419, 437, Lord Maugham said,

"The hypothetical tenant was assumed to be a tenant from year to year with a reasonable prospect of continuing in occupation; but the hypothetical rent which the tenant could give was estimated with reference to the hereditament in its actual physical condition (rebus sic stantibus), and a continuance of the existing state of things was prima facie to be presumed."

20. At this point it is necessary to digress and give some explanation of the date of valuation. The scheme of the legislation is that each successive rating list has a single valuation date, which is determined (under Schedule 6, paragraph 2(3) of the 1988 Act) as the date on which the list is to be compiled or such earlier date (the 'antecedent valuation date') as may be specified by the Secretary of State. In this case the antecedent valuation date was specified as 1 April 1988 by the Rating Lists (Valuation Date) Order 1988 (S.I. 1988 No.2146).
21. A proposal to alter a valuation may be made (by section 55 of the 1988 Act and regulations made under that section) for a variety of reasons, including inaccuracy of the rateable value on the day when the list was compiled and inaccuracy by reason of a subsequent change of circumstances. In order to avoid unfairness any new valuation or revaluation must be made by reference to the valuation date applicable to the whole list (this is sometimes expressed as valuation 'according to the tone of the list': see the sidenotes to s.20 of the 1967 Act and s.121 of the 1988 Act). Provisions requiring this adjustment to be made were included in s.20 of the 1967 Act (re-enacting s.17 of the Local Government Act 1966, in which the provisions first appeared) and (in different and even more opaque language) in subparagraphs (4) to (7) of Schedule 6, paragraph 2 of the 1988 Act as amended (with retrospective effect) by the Local Government and Housing Act 1989.
22. These provisions (which even the very experienced members of the Lands Tribunal, in para 138 of their decision, described as obscure) require the valuation to be made on specified assumptions as to the "matters" listed in paragraph 2(7). The only point of importance to this appeal is that the matters referred to in paragraph 2(7) include -

"(a) matters affecting the physical state or physical enjoyment of the hereditament,

(b) the mode or category of occupation of the hereditament."

Para 2(7)(d) and (e) refer in similar but not identical terms to the locality. It is worth noting in passing that the references to the "physical" state or enjoyment of property in para 2(7)(a) and (d) represent a statutory reversal of the decision of the House of Lords in Addis Ltd v Clement [1988] 1 WLR 301, a decision on s.20 of the 1967 Act. The ratepayers' submission, which the Lands Tribunal substantially accepted, is that the reference to "the mode or category of occupation" in para 2(7)(b) indicates Parliament's express endorsement of the decision of the Lands Tribunal in the important case of Fir Mill Ltd v Royton UDC (1960) 7 RRC 171.

23. It is common ground between the parties that the statutory hypothesis, as explained in case law, takes account of statutory restrictions on the use of a hereditament but not of restrictions imposed by the covenants in a lease or by restrictive covenants affecting freehold property. However the effect of statutes restricting residential rents is disregarded since it is a matter affecting the landlord, not the occupier. That was decided by a majority of the House of Lords in Poplar Assessment Committee v Roberts [1922] 2 AC 93, reversing the decisions of this court and the Divisional Court.
24. The statutory restrictions which may be relevant include control of development under the Town and Country Planning Acts. That control extends to a change of use except where the change is permitted development under a general development order or otherwise. In this case it is common ground (see para 155(d) of the decision) that both sets of premises are within Class A3 in Part A of the Schedule to the Town and Country Planning (Use Classes) Order 1987 ("use for the sale of food or drink for consumption on the premises or of hot food for consumption off the premises"). A change of use to a use within Class A1 (shops) or Class A2 (financial and professional services) would be permitted development under the Town and Country Planning General Development Order 1977 (as modified).

The early authorities

25. The parties' written and oral submissions have referred to over 75 decisions of the court or the Lands Tribunal, starting with the observations of Lord Mansfield in R v Occupiers of St Luke's Hospital (1760) 2 Burr 1053, 1064. It does not evince disrespect or ingratitude to say that this court has derived little direct assistance from most of the authorities. Many of them were concerned with other issues and so far as they have anything to say about the alternative uses to which a hereditament might be put they must be understood in the light of the issues before the court in those particular cases. It is appropriate to make a few general remarks about the early authorities before coming to the two decisions on which this court has heard lengthy submissions, Fir Mill v Royton UDC (1960) 7 RRC 171 and Midland Bank v Lanham [1978] RA 1.
26. The need to look at the issues before the court is especially strong in relation to Mersey Docks and Harbour Board v Cameron (1865) 11 HLC 443, 501 and a group of cases which followed it. In that case the House of Lords, overruling several earlier authorities, decided that a body of trustees established by statute to manage the Mersey docks were in rateable occupation even though they as trustees could derive no personal benefit from their occupation, and all profits had to be ploughed back into the enterprise for the common good. It was in that context that Lord Westbury LC said (at p.501, after referring to the statutory hypothesis in the Parochial Assessment Act 1836),

"It is by no means necessary that the occupation should be beneficial to the occupiers. It is sufficient if the property be capable of yielding a clear rent over and above the necessary outgoings."

The context was the same or similar in other observations in which distinguished judges referred to the need to have regard to a hereditament's 'adaptability' (Lord Atkinson in Metropolitan Water Board v Chertsey Assessment Committee [1916] 1 AC 337, 353, and Lord Parker in the same case at p.361) 'capacities' (Lord Shaw in the same case at p.357) and 'opportunities' (Lord Buckmaster in Port of London Authority v Orsett Assessment Committee [1920] AC 273, 305). None of these passages seems to have been referring to a simple change of use.

27. Many of the cases reflect another problem with which the court had to grapple during the nineteenth century, that is the difficulty of rating on a parochial basis parts of an enterprise with a large and specialised infrastructure, such as a railway or a water supply system. In the Metropolitan Water Board case Lord Loreburn (at p.345) referred to a water intake and a pumping station at Walton-on-Thames as

"an unproductive part of a great profit-earning concern, which earns its profits in many parishes."

There are obvious difficulties about applying the statutory hypothesis in such circumstances (Lord Atkinson in the same case, at p.355, quoted Lord Esher's comment that it was 'imaginary and unreal') but the difficulties are not concerned with whether, and how far, the hypothesis permits a change of use. Indeed where the hereditament is part of a railway or a waterworks no change of use is likely to be feasible, and the nineteenth century railway cases (of which R v Grand Junction Railway (1844) 4 QB 18 was most fully discussed in this court) were concerned not with change of use but with the legal and financial arrangements (and possible changes in the arrangements) under which two or more competing companies shared the use of a line which was owned (and treated as occupied) by only one of them. It was in the same sort of context that Lord Parmoor said (in Great Western and Metropolitan Railway Companies v Kensington Assessment Committee [1916] AC 23, 54, over seventy years after the first of the railway cases):

"It is a principle in rating assessment that the hereditament should be valued as it stands and as used and occupied when the assessment is made. There is difficulty in the doctrine of a hypothetical tenant, but if to this is added the doctrine of a hypothetical hereditament, the confusion would become hopeless."

28. Few if any of the early cases cited to the court can truly be said to have been concerned with change of use. In R v Proprietors of the Liverpool Exchange (1834) 1 Ad & E 465 the proprietors, a body incorporated by Act of Parliament, were required by statute to make a large room available as a news room which was supplied with newspapers and commercial publications (so providing "the earliest account of the arrival of vessels, and other nautical information"). Over 1200 individuals who were not proprietors paid an annual subscription to use the news room. The issue was whether, and if so how, the subscription revenue should be taken into account in fixing the rateable value. Littledale J (delivering the judgment of the court) stated the principle (at p.474)

"that the advantages attendant upon a building, either in respect of its situation or the mode of its occupation, are to be taken into the account in estimating its rateable annual value, wherever those advantages would enable the owner of the buildings to let it at a higher rent than it would otherwise fetch; but not the profits of a trade carried on in the building and not enhancing its rent."

It was held that the subscription revenue earned by its function as a public news room should be taken into account, but not the proprietors' privilege of free access to it. The case is of some interest as being one of the earliest in which reference was made to 'mode of occupation', but it lays down no principle about change of use.

29. Nor do two cases about brickfields which were heard and reported together, R v Westbrook and R v Everist (1847) 10 QB 178. As the hereditaments were described as brickfields in the relevant assessments, and they had plant for brickmaking installed on them, it is not surprising that the court decided that they should be rated as brickfields, and not as agricultural land or garden land (the strongest argument the other way was that the royalty payable in respect of the annual brick production should be regarded as an outright purchase of brick earth, and not as an annual rent). In rejecting the ratepayer's proposals in R v Everist Lord Denman said (at p.207) that they

"were in effect to rate land occupied in one mode as if it were occupied in another; the modes producing different rates of profit and commanding different amounts of rent; than which nothing can be more unreasonable."

This observation was not made in relation to a possible change to a more profitable use, but in relation to an argument that the current profitable use should be disregarded. However it was expressed in these general terms.

30. Several reported cases in the nineteenth and twentieth centuries reflect the changing fortunes of the Lancashire cotton industry (whose history is summarised in the decision of the Lands Tribunal in Fir Mill v Royton UDC (1960) 7 RRC 171, 178-9). During the American civil war Lancashire cotton mills could not obtain raw cotton from the southern states of America. Many mills had to cease production. In Staley v Castleton Overseers (1864) 33 LJMC 178 the court was concerned with a mill which had been closed, but in which the mill's engineer was still employed in order to keep the mill warm and the machinery in working order. It was held that the hereditament ought not to be rated as a mill, even though the occupiers hoped for a revival of the industry, but as a storehouse for valuable machinery. In declining to anticipate a revival Blackburn J said (at p.182),

"The law is not so, but the legislature intended that the rate should be made upon the rent which might be reasonably expected from a tenant who took the property from year to year, rebus sic stantibus."

A resumption of profitable use would not be possible until the civil war came to an end.

31. In the Townley Mill case [1937] AC 419 (from which a well-known general observation by Lord Maugham has already been quoted) the House of Lords was concerned mainly with deeming provisions in section 24 of and the Third Schedule to the Rating and Valuation Act 1925 which made an important distinction between motive machinery and plant and process machinery and plant. The outcome was that a silent mill, although occupied, was not liable to any significant rate.
32. Most of these early cases were cited by counsel, not because they were said to have any direct bearing on the issues in these appeals, but in an attempt to identify the underlying principles which ( it was said) were applied, or ought to have been applied, by the Lands Tribunal in the Fir Mill case (which was another case concerned with cotton mills) and in Midland Bank v Lanham. Neither of those decisions is a binding authority as a matter of precedent, but both are considered decisions of very experienced tribunals, and they rightly received close attention both in the decision under appeal and in the argument in this court.

Fir Mill and Midland Bank

33. Fir Mill v Royton UDC (1960) 7 RRC 171 was concerned with five hereditaments, that is two cotton spinning mills, a weaving mill and two parts of another very old weaving mill which was in four different occupations. It was regarded as a test case for hundreds of similar cotton mills in Lancashire. The essential issue was whether each mill was to be valued as a cotton mill, and that the rent which a tenant might reasonably be expected to pay for the premises for any other use should be disregarded.
34. Eminent counsel for the ratepayers put forward that contention, arguing that the rebus sic stantibus rule applied not only to the current physical condition but also to the current manner of use. The valuation officers argued in the first place for a hypothetical tenancy subject to no restriction on use except the basic obligation of user in a tenant-like manner. Their alternative, fall-back position was that the only hypothetical restrictions were user "for the same general purpose" as the current use, and tenant-like user.
35. The Lands Tribunal (Sir William Fitzgerald QC President, Mr J R Laird FRICS and Mr John Watson FRICS) decided in favour of the valuation officers' alternative formulation. In reaching that conclusion it relied on a number of well-known cases, including London County Council v Erith Parish [1893] AC 562 and Port of London Authority v Orsett Assessment Committee [1920] AC 273. In the former case Lord Herschell said (at p.588),

"Whether the premises are in the occupation of the owner or not, the question to be answered is: Supposing they were vacant and to let what rent might reasonably be expected to be obtained for them."

In the latter case Lord Buckmaster said (at p.305, in a passage already alluded to),

"The actual hereditament of which the hypothetical tenant is to be determined must be the particular hereditament as it stands, with all its privileges, opportunities and disabilities created or imposed either by its natural position or by the artificial conditions of an Act of Parliament."

The Lands Tribunal saw the 'creeping in' of the words in the second half of that sentence as confirming the need to take account of all the factors influencing the mind of the hypothetical tenant.

36. In Fir Mill the Lands Tribunal expressed its conclusion in the following passage (at p.185)

"In our opinion only two assumptions are permitted. The first assumption is that the hereditament is vacant and to let - vacant in the physical sense and in the sense that the existing business has ended and any process machinery has been removed. The second assumption - and here we accept counsel for the respondents' second proposition - is that the mode or category of occupation by the hypothetical tenant must be conceived as the same mode or category as that of the actual occupier. A dwelling-house must be assessed as a dwelling-house; a shop as a shop, but not as any particular kind of shop; a factory as a factory, but not as any particular kind of factory. Some alteration to an hereditament may be, and often is, effected on a change of tenancy. Provided it is not so substantial as to change the mode or category of use, the possibility of making a minor alteration of a non-structural character, which the hypothetical tenant may be assumed to have in mind when making his rental bid, is a factor which may properly be taken into account without doing violence to the statute or to the inference we draw from the authorities."

37. Having reached that conclusion on the point of principle the Lands Tribunal then considered the expert valuation evidence. It reached the conclusion (at p.196), in the absence of any factual evidence to the contrary, that cotton weavers (and, by inference, cotton spinners) paid as much rent for their premises as other industrialists paid for theirs. In view of that unappealable finding of fact, neither side had any reason to take the matter to a higher court.
38. Midland Bank v Lanham [1978] RA 1 was concerned with a modern office block on the corner of Holborn and Fetter Lane. The bank had a long lease of the basement, ground floor and next two floors. Later it acquired shorter leases of the fourth floor and part of the seventh floor. The basement and ground floor were used as a branch bank and offices. The other floors were fitted and used as a staff training school, but were capable of being used as offices. The dispute was as to whether the fourth-floor and seventh-floor premises should be valued as a training school or as offices.
39. The Lands Tribunal (in the person of Mr J H Emlyn Jones FRICS) had to consider the ratepayer's argument that the "mode or category of occupation" test adopted in Fir Mill had been given statutory authority by section 20 of the General Rate Act 1967. The valuation officer's first argument was that Fir Mill was wrong and that it was sufficient (as was conceded) that the fourth-floor and seventh-floor premises were physically capable of being used as offices. His alternative argument was that the 'office' mode of occupation was wide enough to cover use as a commercial training school.
40. As in Fir Mill, the Lands Tribunal in Midland Bank v Lanham referred to numerous authorities. Most of these have already been mentioned, but mention should be made of the judgment of Scott LJ in Robinson Brothers (Brewers) v Houghton & Chester le Street Assessment Committee [1937] 2 KB 445 (affirmed [1938] AC 321), since the decision of the Lands Tribunal quoted at length from that judgment. In it Scott LJ enunciated (at pp.468-71) eleven principles or steps, the fifth of which was:

"In weighing up the evidence bearing upon value , it is the duty of the valuer to take into consideration every intrinsic quality and every intrinsic circumstance which tends to push the rental value either up or down, just because it is relevant to the valuation and ought therefore to be cast into the scales of the balance before he looks to see the resultant figure on the dial at which the pointer finally rests."

41. The Lands Tribunal perceived (at p.18) that the authorities produced a paradox:

"On the one hand there is the requirement that the value of the occupation to the existing occupier is to be taken as the measure of his liability for a rate; on the other hand is the need to take into account all the characteristics of the hereditament."

After further discussion of the authorities, including the decision of the House of Lords in Dawkins v Ash Brothers & Heaton [1969] 2 AC 366, the Lands Tribunal stated its conclusion in the following terms:

"I thus accept the submission of counsel for the ratepayers and counsel for the valuation officer's alternative submission so far as it goes - that in valuing for rating purposes it is necessary to take the hereditament as it stands rebus sic stantibus; that the value as thus restricted must relate to the hereditament in its existing physical state; and that the use of the hereditament must be taken to be within the same mode or category as the existing use. So much, I think, is established by authority, as I have interpreted it; and certainly now confirmed by statute law in s 20 of the General Rate Act 1967. Finally, all alternative uses to which the hereditament in its existing state could be put in the real world, and which would be in the minds of competing bidders in the market, are to be taken as being within the same mode or category, where the existence of such competition can be established by evidence."

42. This statement has been criticised because the last sentence - referring to all alternative uses - appears to contradict the immediately preceding reference to the use being limited to the same mode or category as the existing use. On the other hand it makes no allowance for even minor alterations in the physical condition of the premises.
43. On the valuation evidence the Lands Tribunal came to the conclusion (at p.28) that there would have been no competing bid from prospective tenants wishing to use the premises as offices rather than as a commercial training school. So again neither side had any reason to appeal on a point of law.

Recent decisions of higher courts

44. There are obvious difficulties about reconciling the principles stated in Fir Mill and Midland Bank v Lanham. Some constitutions of the Lands Tribunal have attempted this task; others have tended to follow Midland Bank v Lanham. It is not necessary to set out the debate in detail. There are three decisions of higher courts which call for mention, one of them decided between Fir Mill and Midland Bank v Lanham and the other two decided since Midland Bank v Lanham. But in none of them was it necessary for the court to go far into the controversy about mode or category of occupation.
45. In Dawkins v Ash Brothers & Heaton [1969] 2 AC 366 part of a factory in Birmingham was acquired by Birmingham Corporation in 1949 under a compulsory purchase order confirmed in 1947. The premises were then leased back to the former owner because as events turned out the proposed road-widening scheme was not to be carried out until 1965. In 1963 the occupier of the factory made a proposal for a reduction in the rateable value. It was an agreed fact that at the date of the proposal it could have been reasonably anticipated that the property which had been compulsorily acquired would be required for road-widening (and so would be demolished) within about a year.
46. The House of Lords decided by a bare majority (Lord Pearce, Lord Wilberforce and Lord Pearson, Lord Guest and Lord Donovan dissenting) that the prospect of demolition should be taken into account in applying the statutory hypothesis. The reasoning of the majority was neatly encapsulated by Lord Pearce's observation (at p.382)

"That particular hereditament has had branded on its walls the words 'doomed to demolition whatever hypothetical landlord may own it'."

(Lord Pearce was in fact mistaken in referring to a demolition order; all Birmingham Corporation had to do was to terminate the actual tenancy and send in its demolition contractors; but that does not affect the principle of the majority decision.)

47. Lord Wilberforce (at pp.385-6) made some general observations on which both sides have placed reliance:

"The principle that the property must be valued as it exists at the relevant date is an old one, certainly older than the Parochial Assessments Act, 1836. It has been spelt out in modern terminology in Poplar Metropolitan Borough Assessment Committee v Roberts [1922] 2 AC 93, 120, and in Robinson Bros (Brewers) Ltd v Houghton and Chester-le-Street Assessment Committee [1937] 2 KB 469 in passages which have been cited. The principle was mainly devised to meet, and it does deal with, an obvious type of case where the character or condition of the property either has undergone a change or is about to do so: thus, a house in course of construction cannot be rated: nor can a building be rated by reference to changes which might be made in it either as to its structure or its use.

But it would surely be unreasonable to suppose that the hypothetical tenant is so inescapably imprisoned in the present that no anticipation is permitted of what is to come. Whether the test is what would influence his judgment, or what intrinsic qualities the hereditament possesses, any occupier in real life has to ascertain and to consider whatever may make his tenancy more or less advantageous over the period for which he takes it."

48. Byrne v Parker [1980] RA 45 was an appeal to this court by a litigant in person who was aggrieved by the valuation of his launderette in Fulham, as compared with other shop premises in the vicinity. This court found no error of law in the decision of the Lands Tribunal, and the case calls for mention only because Stephenson LJ (with whom Ormrod and Waller LJ agreed) referred to the two permitted assumptions stated in Fir Mill (para 36 above) and said (at pp.49-50),

"There may be some doubt as to the extent of the second of those assumptions, but here there can be no doubt that the letting of these premises as a shop, not necessarily as a launderette but a shop of some quite different kind, is something which can be and must be considered in assessing the rent which the hypothetical tenant would pay for the hereditament."

It does not appear whether the Lands Tribunal had had any evidence about the likely cost of removing fitted washing machines, dryers and other specialised equipment, or whether Stephenson LJ had that aspect in mind in the quoted passage.

49. The decision of the House of Lords in Addis Ltd v Clement [1988] 1 WLR 301 was concerned with section 20 of the 1967 Act (and led, as already mentioned, to the amendment of those provisions as re-enacted in Schedule 6, para 2 of the 1988 Act). The issue of statutory construction decided by their lordships is not directly in point but Lord Keith made some general observations (at p.305):

"The broad purpose of section 20 was to secure that a hereditament which, for one reason or another, fell to be valued at a time after the coming into force of a valuation list should be valued on the basis of the general level of values prevailing when the list was made up. It is not apparent that there was any good reason for requiring the disregard of any of the circumstances which would ordinarily be taken into account under the rebus sic stantibus rule. If any of such circumstances were to be disregarded, the result would necessarily be to some extent artificial. The expression rebus sic stantibus raises the concept of a certain ascertainable state of affairs."

The decision under appeal

50. The Lands Tribunal which heard this case rightly regarded it as being of considerable general importance. It saw the case as an opportunity to resolve a controversy which had been simmering among members of the tribunal, without any direct guidance from this court or the House of Lords, since Midland Bank v Lanham was decided in 1977. The thoroughness with which the Lands Tribunal undertook its task is reflected both in the duration of the hearing (thirteen days) and in the length of the written decision (202 paragraphs).
51. The written decision is helpfully subdivided by numerous headings. The first four sections introduce the issues, summarise the parties' submissions and set out the statutory provisions (paras 1-34). Then there are four sections (paras 35-97) reviewing all the authorities and concluding (para 90) that the formulation in Midland Bank v Lanham is not a correct statement of the law. Then follow eight sections (para 98-151) in which the Lands Tribunal discusses different principles and aspects, the most important headings being 'value of occupation to the occupier', 'mode or category of occupation' and 'physical state'.
52. Then in para 152 the Lands Tribunal sets out its general conclusions as to the rebus sic stantibus rule. This paragraph should be set out in full:

"The conclusions that we have come to can be stated shortly. The rebus sic stantibus rule identifies for the purpose of valuation the hereditament, the physical changes which may be made to it, and the mode or category of occupation. The rule rests on the concept that what has to be determined in rating is the value to the occupier of his occupation of the hereditament, measured by the rent on an assumed yearly tenancy. In carrying out a valuation under the rating hypothesis the following assumptions are to be made about the hereditament:

(a) That the hereditament was in the same physical state as on the material day. Alterations which the hypothetical tenant might make to the hereditament may be taken into account if, taken overall, they are minor. All other prospective alterations to the hereditament are to be ignored.

(b) That the hereditament could only be occupied for a purpose within the same mode or category of purpose as that for which it was being occupied on the material day. Any prospective change of use outside that mode or category is to be ignored. In determining to what mode or category a particular use belongs it is the principal characteristics of the use and the methods of valuation commonly applied by rating surveyors to which regard must be had; and shops, offices and factories serve as examples. Some uses may not fall within any such broad category, however, and are to be regarded as sui generis.

Any evidence relating to the rents or assessments of other hereditaments may be taken into account provided it is relevant to the valuation. There is no rule that evidence relating to another hereditament is irrelevant if that other hereditament is in a different mode or category of occupation."

53. In paras 154-5 the Lands Tribunal set out its findings of primary fact. These are summarised above (paras 6 to 15 of this judgment). The decision went on to consider in turn the 'physical state' and 'mode of occupation' limbs of the rule (paras 156-173 and paras 174-197 respectively). The final decision (paras 198-202) reflected the conclusions of law and secondary findings already mentioned.

The nature of the issue

54. This court had the benefit (as had the Lands Tribunal) of hearing argument from leading counsel with great experience in the law of rating, Mr David Holgate QC for the appellant valuation officer and Mr David Widdicombe QC for the respondent ratepayers. Both leading counsel agreed (as they had to) that the issue for the court is ultimately an issue of statutory construction, and of applying statutory provisions, correctly construed, to the facts as found by the fact-finding tribunal. However both leading counsel were at pains to emphasise the weighty volume of judge-made law which underlies the modern legislation (and in particular, the statutory hypothesis now found in Schedule 6, paragraph 2(1) of the 1988 Act). Mr Holgate went so far as to make occasional references to the 'common law' of rating.
55. Rating law is not unique in that respect. The law of patents and the law of bankruptcy are other examples of bodies of law which, although in principle wholly statutory, owe much to judicial activity in building on fairly primitive statutory foundations, and (to alter the metaphor) still carry the "intellectual freight which was carried by words or phrases in earlier ... legislation" (Hoffmann J in Re a debtor (No.784 of 1991) [1992] Ch 554, 559). In all these areas (and most of all, perhaps, in rating) it is necessary to pay close attention to the way in which successive generations of judges have interpreted and applied the hallowed language of the statute (in this case, the statutory hypothesis).
56. However respect for 'intellectual freight' from earlier centuries must not be carried too far. In particular, it is not helpful to fasten on isolated pronouncements by judges, however eminent, without regard to the context in which they were made and to seek to apply them to an issue which was not before the court. That is especially true of the Victorian cases about railways, docks and waterworks. Nor can the Barras principle be carried too far (see Barras v Aberdeen Steam Trawling and Fishing Co [1933] AC 402, 446-7). That principle states that where Parliament uses a word or phrase (in that case, 'wreck') which has already (and in the same context) received judicial interpretation, there is a presumption that Parliament intended to use the word or phrase in the sense in which the court had interpreted it. It is common ground that the language of s.20 of the 1967 Act was a deliberate adoption of the language used by the Lands Tribunal in Fir Mill. The 1988 Act was not a consolidating Act but it is incredible that Parliament, when using the same language in paragraph 2(7)(b) of Schedule 6 to the 1988 Act, should have intended to vary the meaning so as to introduce the ambiguous (if not self-contradictory) language of Midland Bank v Lanham. That would have been to legislate by a 'surreptitious device' (see Assessor for Lanarkshire v Smith [1962] SC 517, 521).
57. Mr Holgate (who showed courtesy, coolness and determination in the face of something of a barrage from the bench) insisted that he was referring to the (less numerous) authorities which were actually read, not for 'sound bites' but to identify and abstract some important general principles which should guide the court. The first and most important of these principles is the distinction between the determination of a person's liability to be rated (on the one hand) and the quantification of that liability by determination of rateable value (on the other hand). Mr Holgate submitted that the Lands Tribunal fell into serious error by failing to make this distinction. He also relied on what he called the principles of reality and uniformity. These submissions call for serious consideration.
58. A person cannot be liable to pay non-domestic rates unless he is in occupation of a non-domestic hereditament within the meaning of the 1988 Act, and there is a long line of cases (starting, so far as the modern law is concerned, with the Mersey Docks case in 1865) on the concept of rateable occupation. It is a concept which imports the notion of beneficial occupation, but not necessarily in the sense of being profitable to the occupier personally. Moreover the need for benefit is (as Mr Holgate urged, referring to the advice of the judges given by Blackburn J in the Mersey Docks case (1865) 11 HLC 443, 461) a low threshold. Once a hereditament has passed this threshold and is shown to be rateable, the valuation process requires a determination of annual value to an hypothetical tenant holding under an hypothetical annual tenancy, and the actual occupier ceases to be relevant.
59. In developing this submission Mr Holgate referred particularly to paras 98 to 102 of the Lands Tribunal's decision and criticised them as confusing two matters which should be kept separate. I see a little force in this criticism, but not much. There is an obvious distinction between the concepts of rateability and rateable value, but they are nevertheless successive steps in a single process of determining whether an actual occupier is liable to pay rates calculated by reference to the annual value shown in the list. Moreover they are both concerned with the physical state and use of the hereditament in question. It is not surprising that the court, in making very general observations about the law of rating, should occasionally have run the two concepts together. All four judicial pronouncements cited by the Lands Tribunal in the criticised passage appear to be dealing solely or mainly with rateable value, and so (contrary to Mr Holgate's submission) the Lands Tribunal did not take them out of context.
60. It is true that in the passages from R v Grand Junction Railway Company (1844) 4 QB 18, 43 and the Townley Mill case [1936] 1 KB 585, 641-3, Lord Denman CJ and Scott LJ respectively may have run together the two steps in the process in order to state a summary conclusion as to the 'bottom line'. The Lands Tribunal did much the same in stating (in para 102 of the decision, repeated in much the same terms in para 106),

"The basis of rating is that the occupier of a hereditament is liable in respect of his occupation; and given the basis of liability, it is consistent with it that the measure of the liability should be the value to the occupier of his occupation."

Elsewhere in the decision there is ample material showing that the Lands Tribunal had well in mind that that value had to be quantified by reference to an hypothetical tenancy.

61. Mr Widdicombe drew attention to a comparable point from the well-known textbook, Ryde on Rating. The first edition, published in 1900, referred in its discussion of rateable value (at p.145) to an observation of Lush J, approved by Lord Herschell LC in the Erith case [1893] AC 562, 600, that

"the rateable quality of land was not to be determined by what it once was, or by what it might thereafter become, but by what it was at the time the rate was made."

In a footnote the author observed that the cases were dealing with the question of rateability or non-rateability, but seemed equally applicable to the question of amount. This passage, including the footnote, has appeared in successive editions down to the 13^th edition, published in 1976 (the work is now loose-leaf).

62. For what he called the principle of reality Mr Holgate referred to the judgment of Peter Gibson LJ in the recent decisions of this court in Hoare v National Trust and National Trust v Spratling [1998] RA 391. Those cases were heard together because they were concerned with the rating of two stately homes belonging to the National Trust, Petworth House and Castle Drogo. These properties are run as businesses, but businesses which (on the evidence accepted by the Lands Tribunal) are bound to be loss-making. Nevertheless the Lands Tribunal assumed that the National Trust would bid for a tenancy at a more than nominal rent, even if there was no competition. That was the context in which Peter Gibson LJ referred (at p.415) to what Lawton LJ said in Trocette Property Company v Greater London Council [1974] RVR 306, 311:

"It is important that this statutory world of make-believe should be kept as near as possible to reality. No assumption of any kind should be made unless provided for by statute or by decided cases."

Peter Gibson LJ termed this the principle of reality. Mr Holgate relied on that and also on what he called the principle of uniformity, that is the need to apply a common yardstick of valuation. That principle was recognised by this court in Ladies Hosiery and Underwear Ltd v West Middlesex Assessment Committee [1932] 2 KB 679, 688. Mr Holgate instanced a multipurpose building which could be used for a range of purposes within user class B1 (a wide business class covering office use, research and development and light industrial purposes which are not to the detriment of any residential area).

63. It is impossible to quarrel with the principle of reality as a general principle. The principle of uniformity also commands ready agreement so far as fairness generally requires comparable properties to be valued by the same yardstick (but that does not make one single method of valuation uniquely appropriate, as a matter of law, for a particular type of hereditament: see Garton v Hunter [1969] 2 QB 37, a case about a caravan site). But it is common ground between the parties that shop premises are normally valued by a method ('zoning') quite different from the barrelage method applied to public houses. Mr Holgate's very wide formulation of what he called the principle of uniformity is not supported either by the authorities or by the practice of valuers.

Scottish law

64. Before stating my conclusions I should refer briefly to the Scottish law of rating, on which this court heard various submissions. Mr Widdicombe submitted that it is substantially the same as the English law of rating, and that it can therefore give valuable guidance; Mr Holgate urged the court to treat it with great caution, pointing out that very few English authorities are referred to in the leading Scottish textbook (Armour on Valuation for Rating, the 5^th (1985) edition of which has very distinguished editors).
65. The Scottish law as to non-domestic rating does appear to be substantially similar to the English law, but it has got there by a different route, since section 6 of the Lands Valuation (Scotland) Act 1854 laid down a statutory hypothesis which included the words "in their actual state"; but these express words were not used in the Valuation and Rating (Scotland) Act 1956. The Lands Valuation Appeal Court has held that this omission has not altered the law (Assessor for Lanarkshire v Smith [1962] SC 517; Assessor for Stirlingshire v Myles and Binnie [1962] SC 530). Section 15 of the Local Government (Scotland) Act 1966 contains provisions similar (but not identical) to those now found in paragraph 2(3) to (7) of Schedule 6 to the 1988 Act.
66. In Alexander Wood & Son v Assessor for Aberdeenshire [1963] RA 101, 103 Lord Sorn said,

"Shops are valued as shops, not as grocers' shops or butchers' shops. Factories are valued as factories, not as factories for producing tweed or as factories for producing wireless components. Exceptions are only carved out of general categories if it is shown that heritage of the alleged exceptional kind commands rents of a different order from heritage belonging to the general category."

That statement has an obvious similarity to the formulation in Fir Mill (at p.185; para 36 above). Nevertheless I consider that it is unnecessary, and may be unwise, for this court to rely on Scottish authorities for the determination of these appeals from the Lands Tribunal; and I have included this brief reference to some of the numerous Scottish authorities only out of deference to counsel's thorough researches.

Conclusions

67. Both sides regard these appeals as being of general importance (Scottish and Newcastle and the successor of Allied Domecq have between them over 9,300 public houses, many of which are in high street locations). It is therefore understandable that both sides have made some wide-ranging submissions about the possible implications of this court's decision. But ultimately this court has to decide whether the Lands Tribunal made a material error of law in determining two appeals on the particular facts which it found.
68. In my view the Lands Tribunal was plainly right in concluding that Parliament has, in paragraph 2(3) to (7) of Schedule 6 to the 1988 Act, recognised that 'mode or category of occupation' is a material factor in valuation for rating purposes, so confirming that the rebus sic stantibus principle has a second limb, user, in addition to its first limb, physical condition. Indeed Mr Holgate did not dispute this.
69. In my view the Lands Tribunal was also plainly right in rejecting the formulation in Midland Bank v Lanham ("all alternative uses to which the hereditament in its existing state could be put in the real world, and which would be in the minds of competing bidders in the market, are to be taken as being within the same mode or category ... "). That formulation is either self-contradictory, or at best reduces the second limb of the rule (recognised in para 2(7)(b) of Schedule 6) to a pale reflection of the first limb (recognised in para 2(7)(a)).
70. Mr Holgate criticised the formulation in Fir Mill as unhelpful in that it was referring only to general categories of use. He urged the court not to treat its language ("a shop as a shop, but not as any particular kind of shop; a factory as a factory, but not any particular kind of factory") as if it were a statutory text. I would certainly not treat that as a statutory text. But Parliament's adoption of the expression "mode or category of occupation" must be taken as recognising that the formulation in Fir Mill is on the right lines, even if its precise scope has to be worked out on a case by case basis.
71. It may be useful to note some situations in which the second limb of the rule, understood in this way, does not assist a ratepayer in obtaining a lower valuation. It does not assist a ratepayer who leaves half of his business premises empty, or otherwise runs his business in an half-hearted or inefficient manner; that does not go to the category of the business occupation, but to the way the particular business is run. Nor does it cast any doubt whatsoever on the decision in Robinson Brothers (Brewers) [1937] 2 KB 445, that a brewer interested in acquiring a tied house should be regarded as in the market for an hypothetical tenancy of a free house; again, that goes not to the category of business for which the premises are occupied, but to the way the business is run.
72. Both sides agreed that use classes and classes of permitted development, as determined from time to time for the purposes of town and country planning law, cannot be determinative as to 'mode or category of occupation'. Mr Holgate made plain that he accepted this only as a matter of law, and that qualification is sensible, because any system of classification for planning purposes must be expected to reflect economic and social realities. But it may be arguable that the B1 use class is now so wide that it may span more than one mode or category of occupation for rating purposes. I express no view on that.
73. I do respectfully differ from the Lands Tribunal as to its view (para 152(b) of the decision) that in determining mode or category of occupation regard should be had to 'the methods of valuation commonly applied by rating surveyors'. That seems to me to put the cart before the horse. Rating surveyors adopt different methods of valuation because the differences between business premises makes that appropriate. In this case the different methods adopted for public houses and shops reflect the fact that they are in different categories of business use.
74. Turning to the first limb of the rule, I consider that the Lands Tribunal was clearly right, following Fir Mill, to allow for the possibility of minor alterations in the hereditament on the occasion of its hypothetical letting. The absurdity of any other view appears vividly from the circumstances of these appeals, with numerous very well-known retail chains seeking to establish their identities and brand loyalties by distinctive fascias and fittings installed in uniform, featureless units. The first limb cannot be applied so rigidly as to prevent (for instance) Burger King being considered as a possible bidder in competition with McDonald's (which occupies a large unit just opposite the City Fayre/City Duck).
75. Mr Holgate criticised the test of 'minor' alterations as being imprecise, which indeed it is. But the Lands Tribunal was in my view right to prefer it to drawing the line at a suggested distinction between structural and non-structural alterations, which would be even less satisfactory. On the Lands Tribunal's formulation both limbs do raise issues of fact and degree which will in the first place be matters for negotiation between the valuation officer and the ratepayer's surveyor. If the valuation officer and the surveyor cannot agree, they will be issues of secondary fact for the appropriate tribunal.
76. I would respectfully dissent from the Lands Tribunal's view (para 171 of the decision) that in deciding whether alterations should be classified as minor -

"Cost is a factor to be taken into account, but as an absolute figure and not in relation to the increased rental value which can be realized by the works."

If the Lands Tribunal really meant 'absolute' that cannot be right, since (as was pointed out in argument) the absolute cost of even trivial alterations to the Dome at Greenwich is likely to be very high. I think the Lands Tribunal must have meant to say merely that the relative increase in rental value is not determinative, a proposition with which I agree.

77. Mr Holgate also criticised the Lands Tribunal for failing to deal adequately with one of his submissions, or at all with another submission. The first point was in para 170 of the decision, where the Lands Tribunal dealt shortly with a submission as to 'necessary works' falling short of the agreed works of stripping-out. The Lands Tribunal was entitled to deal with the submission in a fairly summary way, as there was no evidential basis to support it.
78. The point which Mr Holgate said had been overlooked completely in the Lands Tribunal's conclusions, was a submission (recorded in para 165 of the decision) which was based on the construction and layout of the Milton Keynes shopping centre as a whole, and in which the McDonald's fast-food outlet was mentioned as a particular instance. It does appear that this particular point was not dealt with. I do not regard that as a serious criticism of the Lands Tribunal's very thorough and careful decision. I think it would have expressed the view, consistently with other parts of the decision, that minor alterations can include a fair amount of 'rebranding' in fascias and fittings appropriate to the same category of business, but that that cannot assist an hypothetical tenant wishing to carry on a different category of business.
79. In the course of its lengthy decision the Lands Tribunal made a few minor observations with which (as I have indicated) I cannot agree. But on the essential points of law it directed itself correctly. I have not been persuaded that there is in the decision any material error of law so as to lead to this court reversing the decision, or remitting the matter to the Lands Tribunal for further consideration. I would dismiss these appeals.

Lady Justice Hale:

80. I agree.

Lord Justice Aldous:

81. I also agree.
ORDER: Appeal dismissed with costs; permission to appeal to the House of Lords refused. (Order does not form part of approved Judgment)