England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		3rd July 2006

1. KENNETH PARKER QC:

Introduction

2. This is an appeal by the Listing Officer pursuant to Regulation 32 of the Council Tax (Alteration of List and Appeals) Regulations 1993 against the decision of the London North East Valuation Tribunal ("the Tribunal") dated 11th November 2005 directing that 48 Hungerford Road, London, N7 9LP be shown on the Valuation List as a single dwelling (Band G) from 6th September 2004.
3. The issue in the appeal to the Tribunal was whether the property situated at 48 Hungerford Road ("the property") ought to have been entered in the Valuation List (which is maintained for Council Tax purposes) as a single dwelling or as two separate dwellings. The Listing Officer contended that there were two dwellings: a maisonette occupying the basement, ground and first floors, and a flat on the second floor. For clarity and to avoid confusion with an earlier configuration, I shall call this "the second floor flat" without intending to decide its structure as a separate chargeable dwelling.
4. He treated the second floor, an area of 26 sq m, as a flat comprising two rooms: a bedroom with facilities for cooking and a bathroom. The Listing Officer assessed that the second floor should be separately entered on the Valuation List as a "self-contained bedsit on the second floor: access via stairs and passageways of [maisonette, basements, ground and first floor] kitchenette within room." The Tribunal disagreed with this assessment. The Listing Officer contends that the Tribunal erred in law and that its decision should be quashed.

The Legislation

5. Council Tax is payable in respect of any dwelling. Such a dwelling is referred to as a "chargeable dwelling". The basic definition of a dwelling is found in section 3(2) of the Local Government Finance Act 1992 ("the Act"). Section 3(5) of the Act provides, so far as is material:

"The Secretary of State may by order provide that in such cases as may be prescribed by or determined under the order --

(a) anything which would (apart from the order) be one dwelling shall be treated as two or more dwellings . . . "

6. Article 3 of the Council Tax (Chargeable Dwellings) Order 1992, SI 1992/549 ("the Order"), provides, so far as is material:

"[Where] a single property contains more than one self-contained unit, for the purposes of Part I of the Act, the property shall be treated as comprising as many dwellings as there are such units included in it and each such unit shall be treated as a dwelling."

Article 2 of the Order contains this definition:

"'Self-contained unit' means a building or a part of a building which has been constructed or adapted for use as separate living accommodation."

The Recent History of the Property

7. The property is a typical four storey pre-1900 mid-Victorian town house. By 1997 the property comprised two parts: a maisonette consisting of the upper ground floor with external access, first floor and second floor, and a flat, then in separate ownership, consisting of the lower ground floor with separate external access by a side door. I shall call this "the lower ground floor flat" to avoid confusion with the present configuration of the property.
8. In 1997, Ms Gomperts, the respondent in this appeal, purchased the maisonette and with a lodger occupied it. The lower ground floor flat reminded at that time in separate ownership and occupation. A Listing Officer made a site inspection in 1997 and was satisfied that under the Order the maisonette constituted a single and separate chargeable dwelling. In 2000 Ms Gomperts and her husband purchased the lower ground floor flat, renovated it, and united it with the maisonette by an external staircase. A lodger then occupied what I have called the second floor flat.
9. In 2002 notification was given that the lower ground floor flat should no longer be treated as a separate chargeable dwelling. In 2004 the Listing Officer, as I have earlier stated, accepted that the lower ground floor flat was now united with the first and ground floor but proposed that the second floor flat be treated as a separate chargeable dwelling. In effect, in view of the reconfiguration of the property, the Listing Officer did not accept that the second floor was now part of the same chargeable dwelling as it had been when it was part of the maisonette at a time when the maisonette did not include the lower ground floor flat.

The Decision of the Tribunal

10. The material part of the Tribunal's decision is quite short and can for convenience be set out in full. I shall adopt paragraph numbering for ease of reference:

"(1) The Tribunal noted all the evidence that had been presented by both parties.

(2) The question the Tribunal had to determine, was whether, 48, Hungerford Road contained two self-contained units. This rested on whether the accommodation on the second floor, which will be referred to as the flat, qualified to be regarded as a self-contained unit. The Tribunal noted paragraph two of SI 1992/549 stated 'self-contained unit means a building or a part of a building which has been constructed or adapted for use as separate living accommodation'. The Tribunal considered the question of separate access, while a material factor, was not an essential condition of separateness.

(3) The Tribunal considered the flat had some of the features of a self-contained unit, namely a sleeping/living area, with kitchen and bathroom facilities, however, the flat did not have a lockable entrance door. The Tribunal noted the Order referred to 'constructed or adapted for use as a separate living accommodation'.

(4) The Tribunal noted that no evidence had been provided of the property having been purposely constructed or adapted for such usage. In 1997, when a lodger was occupying the flat, a valuation officer decided that such accommodation should not be separately assessed, however, in 2004, given the same set of circumstances, another valuation officer decided that it should be separately assessed.

(5) The Tribunal noted the High Court case of McColl v Listing Officer, had been referred to by Mr Miah. This was an appeal to the High Court from two decisions of Valuation Tribunals determining that a house and flat comprised two self-contained units for the purposes of Council Tax. The Court held that the appeal must be dismissed because the Valuation Tribunals correctly decided that the house and the flat were two self-contained units. The flat in question had a lockable entrance door and comprised two bedrooms, a kitchen/living room and bathroom/wc, situated within a house. Like, 48, Hungerford Road, entrance to the flat was obtained by passing through the hall, stairs and landing of the house, which was regarded as part of the living area; however, unlike 48, Hungerford Road, the flat had a lockable entrance door, was let out to tenants, who had no entitlement to occupy the house.

(6) Regarding the appeal property, the Tribunal considered it relevant, by way of background, to note that there was no history of the flat being lived in separately or treated as separate living accommodation and there was no intention for the flat to be lived in separately. Ms Gomperts had referred to the property being occupied by a single household, evidenced by the lodger at her previous address moving with her to the appeal property. Subsequent lodgers were considered to be part of the general household. The flat did not have a lockable entrance door, consequently it was difficult to prevent access to it. The lodger's occupation of the property was not restricted to the flat, they being able to entertain friends in the maisonette and to therefore use the maisonette as their dwelling.

(7) Having considered all the evidence the Tribunal did not consider the flat qualified to be regarded as a self-contained unit of accommodation, in accordance with SI 1992/549.

(8) Regarding the banding of 48, Hungerford Road, the property had five bedrooms, four bathrooms and was 279 sm in size. Taking into account the sales evidence provided by the Listing Officer, the Tribunal considered the sale price of the property at the 1st April 1991 to be well within the Band G range of sale prices.

(9) The Tribunal therefore direct that 48, Hungerford Road, London, N7 9LP be shown in the Valuation List as a house, Band G, from the 6th September 2004.

The Grounds of Appeal

11. Mr Buley, who appeared on behalf of the Listing Officer, submitted before me as his primary ground that Article 2 of the Order requires the application of a simple bricks and mortar test. In other words, whether a building or a part of a building has been constructed or adapted for use as separate living accommodation can be determined and should be determined exclusively by reference to its physical features or structure. It is not permissible to enquire whether some notional constructor or adaptor intended in fact to create separate living accommodation. Nor is it permissible to enquire whether the occupants have used the disputed part of the building as separate living accommodation, or whether they might be likely so to use it in future.
12. The question of the correct approach to Article 2 of the Order has arisen before. In Coleman v Rotsztein [2003] RA 152, at 155 paragraph 5, Sullivan J said:

"The Tribunal did err in taking account of the council taxpayer's intention in constructing the annexe and did not base its decision, as it should have done, upon what had physically been constructed. There is no doubt, given the Tribunal's description of the accommodation -- living room, kitchen, bedroom, a combined shower and wc, together with an exterior door -- whether or not the occupants of the annexe chose to use that door, that the annex possessed all of the physical characteristics of a self-contained unit."

13. In Hayes v Humberside Valuation Tribunal and Kingston Upon Hull City Council [1998] RA 37, the Court of Appeal had to interpret and apply Regulation 2 of the Council Tax (Liability for Owners) Regulations 1992 which provided that a dwelling was within Band C for the purpose of those regulations if it "was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household."
14. The language of "for occupation" is very similar to "for use" and is furthermore employed in a similar statutory context. In relation to that language, Millett LJ (as he then was) said:

"In my judgment, the question for the Tribunal under para (a) is whether the dwelling was originally constructed or afterwards physically adapted so as to make it fit for occupation for persons who do not constitute a single household. This is a common statutory usage (see, for example, R v Formosa). The question turns on the physical characteristics of the building, as constituted or adapted not on the intention with which or the purpose for which it was originally constructed or afterwards adapted. The question is one of fact and degree for the Tribunal."

Similarly, in Clement (Listing Officer) v Bryant and Others [2003] RA 133, at page 137 paragraph 8, Sullivan J said:

"[It] is plain from the definition of 'self contained unit' in Article 2 of the 1992 Order that the definition is concerned with how the building has been constructed or adapted. It is not concerned with who occupies the building or the manner in which it is used by particular occupiers."

15. In my judgment, these passages from the foregoing authorities conclusively demonstrate that the test is an objective bricks and mortar test. Intention and use, actual or prospective, are not relevant. Initially I was inclined to think that, as a matter of ordinary language, the words "for use" more naturally imported a purposive rather than a resulting consequence of the imputed construction or adaptation. However, it seems to me that even if that were the case, there are good policy reasons why an interpretation based on intention or purpose should not be adopted in this context. First, there may be real practical difficulties by reason of the passage of time or otherwise in ascertaining the intentions of an original constructor or later adaptor of the building. Secondly, a test based on intention might encourage taxpayers to devise strategies with varying degrees of ingenuity to persuade listing officers and/or the Tribunal that they had no deliberate aim to create separate living accommodation. Thirdly, administrative and judicial time would be employed in seeking to test the veracity of subjective claims of lack of the necessary subjective intention. This process would be costly and uncertain, with the probable result that success would depend more on the skill and resources of the advocate than upon the intrinsic merits of the claim. Inequality of treatment would be likely to occur. I do not believe that such consequences would be in the public interest or accord with the object of Article 2 of the Order.
16. Mr Fookes, who appeared for Ms Gomperts, understandably did not seek to attack Mr Buley's basic submission of law. He submitted that on a fair reading of the Tribunal's decision, the Tribunal had not adopted a test based on either intention or use. I agree with Mr Fookes that it would have been open to the Tribunal to satisfy itself that, on a correct objective bricks and mortar approach, the second floor flat did not constitute separate living accommodation, and then to go on to state that it was fortified in reaching that conclusion by the fact that no-one had intended to create such a self-contained unit and no-one had occupied it as such.
17. However, I am unable to read the decision in this way. In my judgment, the Tribunal simply does not address the relevant question: namely, is the second floor flat, in terms of its objective physical structure, constructed or adapted as separate living accommodation? Instead, at paragraphs 4 and 6 the Tribunal refers to the purpose for which the relevant part was constructed or adapted and the historical use of that part. The Tribunal then uses the lack of intention and use as material props to reach the conclusion that the flat was not constructed or adapted as separate living accommodation. In the light of relevant authority which I have quoted, and on principle, that was an impermissible approach in law to the application of Article 2 of the Order.
18. Mr Fookes also submits that even if the Tribunal impermissibly introduced the concept of intention and use into their reasoning, there was simply no material upon which the Tribunal could have reached a conclusion different from that which they did reach, and that the legal error made no difference to the correctness of the conclusion. Mr Fookes rests this submission on two propositions. First, this was a case where -- as least implicitly, and taking account of the history of the property -- the Listing Officer's assessment rested upon some putative act of adaptation of the property so as to create a second floor flat comprising separate living accommodation. Secondly, there was simply no evidence before the Listing Officer or the Tribunal that any such adaptation had occurred, or indeed as to the nature of any such assumed adaptation.
19. In essence, Mr Fookes propounded a strong test for the concept of adaptation, namely that the decision-maker, whether Listing Officer or Tribunal, should seek to obtain evidence as to when, how, and possibly by whom an alleged act of adaptation occurred. On principle, I do not believe that such a strong test is appropriate in the present context. Such a test would be subject to the same kind of objections, as it seems to me, which led to the judicial rejection of a subjective test for the concept of "for use". There would be likely to be difficulties in obtaining and evaluating evidence, and listing officers and the Tribunal would be likely to become engaged in time-consuming costly exercises when the real question was simply whether the building or part of the building, as it was currently physically configured, should be treated as capable of providing separate living accommodation. Such a test might well result in different treatment of what were identical physical structures.
20. It seems to me that the language of Article 2 was purposively chosen by the draftsman in order to remove a possible argument that might otherwise have been open. If the definition in Article 2 of the Order had said simply "a building or a part of a building for use as separate living accommodation", it would not have taken long for a taxpayer to argue in an appropriate case that the relevant building or part of a building had not been originally designed for such use and that any later modifications should be ignored. Such an argument, in my view, would have been without merit, but the language of Article 2, in any event, makes clear beyond any doubt that in applying the test it is necessary to do no more than to look at the present physical characteristics of the relevant building. Precisely when, how and by whom those characteristics were achieved is irrelevant.
21. I have already referred to the case of Hayes where the language and statutory context were similar to that of the present case. At first instance in that case, Dyson J (as he then was) specifically held:

"I have considered why the draftsman did not simply define test (a) in terms of a dwelling 'which is suitable for occupation by persons who do not constitute a single household'. I believe that the answer is that the draftsman wanted to make it clear that the test applied to dwellings which are suitable for occupation by persons who do not constitute a single household, whether by reason of their original construction or subsequent adaptation, or a combination of the two. This seems to me to be a reasonable explanation for the reference to original construction and subsequent adaptation."

I adopt the same interpretation of Article 2 of the Order for the reasons which I have given.

22. I therefore reject Mr Fookes' strong test for the concept of adaptation. However, I do see considerable force in a rather weaker version of this argument which Mr Fookes also deployed. He submits that whether a part of a building constituted separate living accommodation required close scrutiny of the precise physical characteristics of the building. He argued, for example, that nowadays in certain particular circumstances no reasonable person would regard a part of a building as constituting separate living accommodation if nothing had been done of a physical nature to provide facilities for cooking. Drawing on some examples from his own experience, he contended that in certain situations it would be absurd to treat a particular area as constituting separate living accommodation by reason only that an owner or occupier had made it possible to use a small microwave oven therein.
23. Mr Fookes readily accepted that there could be no hard and fast rules in this area, but submitted that if it was contended in a specific case, for example, that the building had everything, including a kitchen, for separate accommodation, the Tribunal must consider, having regard to the particular circumstances of the case, what it was said there was that physically constituted such a facility. In my judgment, Mr Fookes is right on this issue, for the reasons that he advanced. The Tribunal should consider whether, having regard to the particular circumstances of the case, the physical characteristics of the building do constitute separate living accommodation.
24. Mr Buley, in any event, did not really dissent on this question. He submitted that there was here something physically present sufficient to constitute kitchen facilities, namely the presence of a sink unit. However, it seems to me that an evaluation of a matter of that kind is pre-eminently for the Tribunal to make, not for this court.
25. My conclusion, therefore, is that, for the reasons given, the Tribunal did not apply the correct legal test and did not address the correct question. However, I also conclude that the matter should be remitted to a differently constituted Tribunal for that Tribunal to reconsider the application of the Order in accordance with the guidance given in this judgment.
26. Because the matter is to be remitted, I should also say something on two further legal points raised by Mr Buley. First, he submitted that the Tribunal erred in law because it proceeded on the footing that unless the alleged separate part of the building had a lockable door, that part could not, for the purposes of the Order, constitute separate living accommodation. He submitted that the Tribunal made the mistake of treating McColl v The Listing Officer [2001] RA 342 -- where on the facts they assumed the separate part of the building did have a lockable door -- as if it established in every case that a lockable door was required. In my judgment, McColl was decided on its own facts and did not establish any proposition of law that a lockable door is required in every case before there can be constituted separate living accommodation.
27. I am not wholly satisfied that the Tribunal made an error of law of the kind alleged, but the tenor of the decision might at least suggest that, in relying on McColl, undue weight was given to the absence of a lockable door in this case. Mr Buley accepted that in modern conditions some degree of privacy might not untypically be regarded as a significant element in deciding whether something constituted separate living accommodation. In my judgment, that was a correct concession to make. However, he submitted that in most cases (and this was certainly one in his contention) an objectively acceptable degree of privacy could be achieved without the presence of a door locking off one part of the building from another. He drew attention in particular to the facts of McColl where, although the occupant of the flat could lock himself off from the rest of the house, the physical configuration was not such as to allow the occupants of the rest of the house to lock themselves off from him, yet the rest of the house was found to be a separate self-contained unit.
28. In my judgment, this is again a matter that must be resolved by the Tribunal on the particular facts of the given case. It is wrong in law to treat the presence of a lockable door as a necessary condition for the application of the Order. However, as I have said, there may well be particular circumstances where some degree of privacy could reasonably be regarded as a material element in determining whether something constituted separate living accommodation, and the Tribunal must then decide whether, having regard to the physical characteristics, the part of the building in question should be so treated. I stress again that the test is an objective one. It is emphatically not a question whether any particular occupant might believe that privacy required a locked door, and without it there was no separate living accommodation. It is for the Tribunal, looking at the physical characteristics of the building, to determine on an objective basis whether those characteristics are sufficient to make part of the building separate living accommodation.
29. Finally, Mr Buley submitted that the Tribunal erred by taking account of the view of the Listing Officer in 1997 on this property. In my judgment, it is for the Tribunal to decide whether on the facts of the given case the order applies. A previous opinion of a Listing Officer may sometimes be admitted in evidence, and on occasion such an opinion might be useful to the Tribunal in gaining a more perceptive insight into the issues that it has to resolve. However, at the end of the day, the judgment must be that of the Tribunal and the Tribunal alone. In this case, as I have earlier explained, the view of the Listing Officer relied on by the Tribunal related to a configuration of the property materially different from that which the Tribunal had to evaluate. No real assistance in respect of the relevant issue in the case could be gained by considering that view. The Tribunal should not have taken it into account, and on any reconsideration by the Tribunal it should not be taken into account.
30. For those reasons, I allow the appeal and remit the matter to a differently constituted Tribunal to decide the material issue in accordance with the guidance given in this judgment.
31. MR BULEY: I am grateful to your Lordship. My Lord, there is an application on behalf of the Listing Officer for costs. I do not know if your Lordship received a schedule.
32. KENNETH PARKER QC: I have it.
33. MR BULEY: My Lord, I know my learned friend wants to say something about the principle of costs. It may be best to allow him to make those submissions and then I can reply.
34. KENNETH PARKER QC: Yes. It does not look as though there will be much on quantum.
35. MR BULEY: I am grateful, my Lord.
36. MR FOOKES: My Lord, we have a bundle of correspondence and a schedule if I can hand that up. (Handed).
37. KENNETH PARKER QC: Right, yes. Which way does this go? Does it start with the earliest or the other way round?
38. MR FOOKES: It starts with the earliest. I am only going to refer to one or two pages. the first letter I wish to go to is 16th December 2005. It is at page 4 and it starts at page 2.
39. KENNETH PARKER QC: Page 4?
40. MR FOOKES: Page 4 at the top. There is a debate about the question right from the outset about costs. There is a sentence:

"However, costs are entirely in the discretion of the court, and historically the courts have been reluctant to award costs against individual taxpayers in cases such as these."

If your Lordship turns over to the reply from the respondent, in the middle of that page, fourth paragraph down:

"You also mentioned on the phone that we might request HM Revenue and Customs to undertake:

(a) not to seek costs in the event of your winning the case; and

(b) to pay our costs regardless of whether we win or lose.

I should like to make such a request.

We turn on to page 7, third paragraph down:

"I am taking instructions on your request that we consider undertaking not to seek costs against you even should we win the appeal and/or that we fund your legal costs of the appeal in any event."

We go on then to page 9, which is a further letter of 6th January 2006, third paragraph:

"On the outstanding question relating to costs, I have raised this with my VOA clients and have taken specific instructions. I am authorised to say this (and only this) in relation to the matter. The Valuation Office Agency does not normally offer any undertakings on costs at the outset of High Court proceedings. Where taxpayers have pursued appeals that have had some merit, but which were nevertheless ultimately unsuccessful, the High Court has sometimes been reluctant to award costs against individual taxpayers. Where the Valuation Office Agency has successfully taken an appeal to the High Court, costs orders have not always been sought. However, as a public body with a duty to protect the public purse, the Valuation Office Agency will always seek costs orders in cases where their costs have been unnecessarily increased due to unreasonable or uncooperative behaviour by the other party.

I appreciate that you had been hoping for something a little more positive in your favour than this; but I am afraid that, at this particular juncture, I am unable to say more than that."

Page 13, third paragraph:

"I shall look forward to receipt of Mr Fookes' skeleton argument, and upon receipt I will most certainly discuss its contents with my VOA clients, and assure that this discussion includes a review of their decision not to offer any costs undertakings at the outset of the appeal."

A bit further down, the next paragraph in the middle:

"This being so, in the event that my clients remain reluctant to offer any undertaking on costs, then you should make sure you prepare and serve a schedule of the legal costs . . . "

At the top of the next page:

" . . . if my clients remain opposed to giving costs."

41. I think those are all the references in the correspondence. What the respondents have helpfully produced is a table of previous decisions which was produced on Friday. This table is divided into those cases where the taxpayer has been unrepresented, page 24-5. Then page 26. We are concerned with the Listing Officer's appeals, so I am not seeking to press your Lordship on all those cases which relate to the taxpayer's appeal because different considerations apply. The relevant ones on page 24 seem to be Batty v Burfoot, which we looked at in the bundle.
42. KENNETH PARKER QC: Yes.
43. MR FOOKES: Simmonds v Dowty.
44. KENNETH PARKER QC: So in Batty the successful Listing Officer was ordered to pay the costs of the taxpayers. What is the next one?
45. MR FOOKES: Simmonds v Dowty. The six appeals were allowed. Costs were not sought in that case. Similarly, Butterfield v Ulm, costs were not sought. Those are the only ones, apart from the very last one, which is costs not sought. In situations like these where the Listing Officers appeal, ie, Batty v Burfoot where three of the taxpayers appeared by counsel, their costs were paid. In the other ones there was no application made. There is not a case where the Listing Officers appealed and applied for costs. I am not sure what the facts were in all of them.
46. If we go to the next one, the outcome is where the taxpayer was not legally represented. One of the taxpayers in Batty was not legally represented. I think there was no order as to costs in that case. I do not think she applied.
47. The next list, just looking at the Listing Officer one, can I come back to this in a moment. That is the one where the unsuccessful taxpayer was ordered to pay. If we go down to the next Listing Officer one, it is Beasley v National Council of YMCAs. The Listing Officer's application for costs was refused. It had to bear its own costs. In McColl, where both sides asked for costs, there was no order for costs. The last one, Williams v RNIB where it says that the taxpayer was ordered to pay the costs. The report we have in the bundle does not say that, but I am told that that is what happened. The RNIB in that case was taking a case on behalf of a number of individuals.
48. Can I go back to Lewis v Christchurch Borough Council. I do dispute on this. Actually, it is the wrong way round. What happened there was that it was the Council who fought it. The Council were represented and the Council had to pay the costs. They did represent 341 of their beach huts. Certainly there was no order against the unsuccessful taxpayer in that case. Presumably it was one person who had been chosen. I do not know. I have the report if anybody wishes to see where it is recorded. The order was made against the Council.
49. The gist of all of that is that in this particular case there has been a lot of heart searching by my client. The amount of money involved is relatively little, but the implications get wider and wider. Of course, he did not want to expose himself unnecessarily to the costs. He took reassurance from earlier correspondence, certainly that there was a practice, at least, of not seeking costs here. We have moved on and the matter has been reviewed. The review actually is the application today by my learned friend. In my submission, in this particular case the issues, which went very wide, do potentially affect a lot of people. Where a rate payer has won in a lower Tribunal and where the HMRC can apply a decision and recoup its costs, circumstances are slightly different to the norm. Does your Lordship have Batty v Burfoot in the bundle? It is the only one worth looking at. Page 313. It is in divider 3. It is the third paragraph down. If your Lordship can just look at that paragraph.
50. KENNETH PARKER QC: Yes.
51. MR FOOKES: My Lord, in this case I hope we have not behaved uncooperatively or unreasonably. Secondly, the case Hayes v Humberside, upon which your Lordship relied, was one produced by us, not produced or mentioned at all by the other side.
52. KENNETH PARKER QC: Could we just stand back from the case and look at it in terms of principle. I am much more familiar with the operation of the VAT Tribunal. Sometimes matters go on appeal to the High Court from that Tribunal. The stand there, in my experience, is that Customs and Revenue say "You started the process because you appealed to the Tribunal. It got taken to the High Court and you lost. There is no reason in principle why as the unsuccessful party, you should not pay the costs of the successful party, Customs and Revenue". What is wrong, as a matter of principle, with taking that as a starting point? Is there is something different in the operation of the law or practice here that I am missing?
53. MR FOOKES: Possibly because of the very small amounts involved. The position would be with Council Tax that if that was always the case, you were threatened by "You must not start", no-one ever would.
54. KENNETH PARKER QC: The position you mentioned, the beach hut, I had an appeal by taxpayer on the status of a beach hut. The amount that involved was trivial. There was no order for costs obviously. The taxpayer intended to take the matter to the High Court and it was pointed out "If you do that, even though it is a small amount, you are at risk of having to pay the costs". I am not entirely convinced at the moment that the smallness of the amount is crucial.
55. MR FOOKES: With property, of course, it is not just one because there is a general argument being applied. For example, that is why there were 361 together. Here it is much more difficult for an individual. Although the principle applies, there is no company or association. It is down to the individual.
56. KENNETH PARKER QC: I think in this case I see a strong argument that it was plainly in the interests of the Listing Officer to have this point established. It is a significant point. Therefore, I think it right, for the same reasons as the appeal before Sullivan J, that you should not have to pay their costs. But it would take a lot of persuading that you would get an order that the successful party pay your costs. I am not persuaded that that is the right approach. At the moment, I would be minded to go as far as saying that there should not be an order for costs.
57. I was also thinking of whether you might need some liberty to apply. If the matter is remitted and you are successful on a remission, it would seem to me that there is a strong argument of principle there that being ultimately the successful party you might then have a proper basis for obtaining your costs here. It could be said that the Listing Officer is taking a gamble bringing the matter to the High Court but then ultimately losing on the actual facts of the case. At the moment I would be minded to make no order for costs but to give you liberty to apply if you are successful in any ultimate appeal to the Tribunal.
58. MR FOOKES: My Lord, that is better than nothing. Just on the general point, the principle is that the matter is a matter of discretion. What we have done is put the examples before you.
59. KENNETH PARKER QC: Yes, I see the reasoning of Sullivan J. I do not think it appropriate in this case for me to make an order for costs against the successful party. As the matter currently stands, it is perfectly understandable why the Listing Officer brought the appeal and perfectly understandable why you should defend it. It seems to me that because it was of such significance, it would not be right to make you pay their costs. I would be minded to make no order for costs but to give you liberty to apply to me again if you were successful in the resumed hearing before the Tribunal.
60. MR FOOKES: My Lord, the only point I would make about that is that it really boils down to the question of whether the respondent should appear in person or be represented. That is what we are really talking about. To that extent, you would not have heard all of the cases put before you.
61. KENNETH PARKER QC: That is a matter for you. Anything you would like to say, Mr Buley?
62. MR BULEY: My Lord, I will. In the light of how it is now being put, there are three issues. The first is whether there should be an order for costs against my client. Your Lordship has indicated that you are not minded to make that order so I need not press that point. Secondly, the liberty to apply. To some extent it relates to the third issue. Just on that issue, my Lord, there would be a much stronger argument for that if the Council Tax payer had, for example, offered to agree to remit this case. The matter came to the High Court and my client incurred costs in arguing it, so the case was resisted on an unsuccessful basis and my client incurred costs in that regard.
63. My Lord, turning finally to the question of whether my client should be entitled to an order for costs, which I know your Lordship has given an indication on, first of all, the general rule is that costs follow the event. It is perfectly proper, of course, for my client, because of the duty to protect the public purse, to pursue the costs. The cases to which your Lordship has been referred, in my submission, establish no point of principle. It may be that there were concessions made but the reasons for that will turn on the facts of the individual case.
64. As an illustration of that, I think your Lordship has already turned up the relevant page from Batty v Burfoot. There are two points to make about this. The first is that this was a case where it was the very first case on the provisions to come in. In those circumstances, there was particular public interest in various matters as to the interpretation of those regulations. That does not really apply in relation to any later cases. It was the only case in which there was an order for costs against the successful party. Your Lordship will also see that it was important that in many of the cases the Listing Officer had abetted the error made by the Tribunal. The Tribunal had followed the submission of the Listing Officer and then the Listing Officer had taken the perhaps unattractive course of then appealing on a point of law which he had argued to the contrary. There were particular reasons on the facts of those cases why it was appropriate to make the order for costs that was made. Those sorts of reasons do not apply in this case. In the remainder of the cases there was simply a concession on costs. Those cases established no point of principle.
65. Finally, very briefly, if I can take your Lordship back to the correspondence to which your Lordship has been referred, I do not propose to ask your Lordship to turn it all up again. I make this general point at the outset. There is always, when dealing with an unrepresented litigant -- which is the position that the respondents have been in throughout much of this case -- always a fine line to be drawn between, on the one hand, making clear that there is a risk of costs and what the amounts may be, and, on the other hand, my Lord, not appearing to be bullying someone into giving up. In my submission, when one looks through the letters sent by Mr Burrows who sits behind me, the correspondence walks that line with admirable sense. It is clear that the suggestion is made that costs may be given, but at no point is any undertaking given. It has always remained clear that the taxpayer remains at risk of costs. Importantly on page 14, my Lord, of that little bundle, it is made clear on page 13 that it would be appropriate for the taxpayer to prepare a costs schedule because they may be able to get their costs. Over the page, my Lord:

"The corollary of this, of course, is that if my clients remain opposed to giving any costs undertakings [ie, they do at the moment] then you should in due course expect to receive a schedule of our costs shortly before the hearing date."

It is made absolutely clear at that stage.

66. My Lord, in summary, there is certainly no general rule of principle that costs should not follow the event in these cases. The general rule should be applied, in my submission. There is nothing in the particular circumstances to give any reason why this should not be the case. My Lord, those are my submissions.
67. KENNETH PARKER QC: Thank you very much. This is a case where I have concluded that it would be right to make no order for costs. That is on the footing that the Listing Officer (the appellant) had good reasons for bringing this appeal, particularly in relation to the legal issue concerning the effect of the finding that there was no lockable door. No criticism can be made at all against the Listing Officer for bringing the appeal on that basis.
68. However, it does seem to me that this was a case where it was eminently reasonable for the respondent to appear. It is still not finally resolved whether the respondent will be successful in the appeal at the reconstituted Tribunal, and there is always a prospect that the respondent may be so successful. Therefore, I think that there was good cause for seeking to defend this appeal and I think it was reasonable in those circumstances that the respondent should immediately agree to a remission to the Tribunal because it was important that these points be resolved in the High Court. Therefore, I do not think that it would be proper, having regard to those circumstances, to make an order for costs.
69. I reject at this stage, however, the application that the appellant should pay the respondent's costs. It seems to me that that is not an appropriate order, having regard to the success on the legal issues achieved by the appellant. However, I do give liberty for the respondent to this appeal to re-apply for such a costs order in the event of a final success in the Tribunal. I say nothing further on that matter at this stage because I should make clear that it is not inevitable, even then, that the respondent would obtain its costs of this appeal in the High Court. However, I would like that matter to be left outstanding and to be resolved at the appropriate time.
70. MR BULEY: I am grateful, my Lord.