QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
London WC2A 2LL
B e f o r e :
(Sitting as a Judge of the High Court)
|DARREN JAMES PENGELLY||Appellant|
|THE LISTING OFFICER||Respondent|
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Mr T Buley (instructed by HMRC Solicitors office) appeared on behalf of the Respondent
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HH JUDGE WORSTER:
... the Listing Officer used a market valuation of the property that does not comply with the 1992 Regulations and is therefore unlawful. This error prevented the appellant from obtaining a fair reassessment of the property's council tax banding.
The point is expanded upon at paragraphs 14, 15 and 16:
The Listing Officer was informed that the use of the freehold sale price did not comply with the requirements of the 1992 Regulations prior to the hearing but made no attempt to comply with the legislation and continued to use an unlawful open market freehold valuation for a flat in his evidence submissions.
Additionally, it was apparent that none of the Listing Officer's comparable properties were compliant with the 99 year lease assumption requirement, with six being open market sale prices with 125 year leases and the four appellant's property comparisons being freehold open market sale prices.
These facts were given to the Valuation Tribunal but despite this the Valuation Tribunal have also made a direct comparison using the freehold sale price in its decision notice, demonstrating they have also used a valuation that does not comply with Regulations 6 and 7 of the 1992 Regulations.
"He understood that although freehold the appeal dwelling had to be valued as a flat and assuming that the lease held was for 99 years at a nominal rent."
I go on to paragraph 21. The appellant's argument is summarised in these terms:
"The Listing Officer had not treated the sale values of the appeal dwelling and other flats within the same development with caution. He stated that in December 2012 he requested a valuation of the appeal dwellings from a local Estate Agents who gave a value at that time of between £125,000 and £135,000. He stated that whilst the appeal dwelling was purchased for £164,950 in February 2012 this value included both the premium for being a new build and also for the new fixtures and fittings."
"The Panel had to consider what value the appeal dwelling would have realised had it been sold on the open market by a willing vendor at the 1 April 1991 but as it stood on the relevant date which was the date it was entered into the Valuation List".
Again, if confirmation were needed, that demonstrates that the correct question was asked.
"The Panel had been provided with details of other flats within the same development and the differences between them such as the benefit of a garage. The appeal dwelling was purchased by the appellant for a slightly higher value than other flats in the locality but it accepted that this was due to it being a freehold property and not a leasehold property."
"However, the difference between leasehold flats and a freehold flat was, in 1991 terms, minimal as evidence by the 2012 sales. The value of fittings and appliances would have made no material difference."
"Even allowing for Mr Pengelly's points in relation to the Anglesey Avenue sales and the fact that Mr Pengelly was prepared to pay a good price for the subject property for the reasons stated by his father, the Panel was of the opinion that this and the fact that the subject property benefits from an integral garage, point to 21 Gournay Road as having a value for council tax above the higher limit of band B."
MR BULEY: My Lord, I am very grateful. I do have an application for costs. My Lord, there are two issues, obviously, that arise in relation to that. First of all, the principle and, secondly, the amount, if your Lordship were minded to summarily assess, which would be the ordinary thing to do in a case like this, which has lasted less than a day. My Lord, on principle I say only two things. First of all, obviously, the ordinary rule is that costs follow the event, and so we say that applies, subject to anything Mr Pengelly may want to say about it. Secondly, I do draw your Lordship to the fact that on 4 April this year my instructing solicitor wrote to Mr Pengelly specifically flagging up the fact that he might be liable to pay costs as a losing party and suggesting that he might want to consider taking legal advice. I can show you the letter if your Lordship wants to see it. So that may have some relevance. My Lord, as to amount, we have a schedule of costs, which was sent to Mr Pengelly yesterday by email and he has confirmed that he has seen it. I am glad to be able to say that the amount that was recorded in that schedule is rather too much, (a) because of an error in the maths and (b) because in the event the hearing has gone shorter than the estimate provided. Can I hand up to your Lordship a copy of the schedule and also give Mr Pengelly a revised version. My Lord, in those circumstances, the amount that I am seeking is £5,502.70 in total. If I just show your Lordship that there are some handwritten amendments, which I will just explain. First of all, Mr Hothersall's attendance at court was estimated at 4 hours but, in fact, we are simply claiming 2 hours. So that brings the figure down by £634. Secondly, I am afraid the maths was just wrong in arriving at the figure recorded in the box of £7,164. So that has been revised down. Thirdly, my fee was estimated on the basis again of 4 hours at court and again that has been taken down by 2 hours to £600. So that hopefully explains the figure. I am in your Lordship's hands whether you want to hear from Mr Pengelly now or whether you want to ask me about these figures.
JUDGE WORSTER: Shall I hear from Mr Pengelly first of all on the principle of costs. Leave the figures to one side for a moment, Mr Pengelly. The application is that in principle you the pay the costs of the appeal, the principal argument being that the loser normally pays the winner when one gets to a court of this sort. Is there anything you want to say about that? I am told you were sent a letter in April.
THE APPELLANT: Yeah, it didn't allude to what those costs would be.
JUDGE WORSTER: No, that is why I am dealing with the principle first and then we will come onto figures.
THE APPELLANT: I understand that there would be costs for this.
JUDGE WORSTER: I think that must be right, particularly if you had been put on notice of the fact that that is something the court can do. It would be the normal order. I will make an order that you should pay the respondent's costs of the appeal. Then the second step is the amount. Now, it is normal for the judge to try and assess the amount in a case which has lasted a relatively short time. The alternative is to go off and get a costs judge to assess it but that takes more time and you have got the costs of the assessment. So the general rule is that I try and assess it. I appreciate you are not a lawyer and this might look a frightening amount of money but it is divided up, this schedule, into the first heading: attendances on clients, and you can see hours and various rates, two different rates, a grade A solicitor and a grade D. Then attendances on opponents, which would be you. Then attendances on others, which is counsel and the court and that sort of thing, and then the biggest sum: work on documents, there is not a schedule attached to my statement of costs and it may be Mr Buley needs to tell me a bit more about what was done on documents.
MR BULEY: Are we looking at the entry "work done on documents"?
JUDGE WORSTER: Yes.
MR BULEY: I think, in fact, the £3,518 figure there is simply the total of the figures which precede it, it is not a separate item. That is simply the sum of what I made to be -- yes, that is the explanation.
JUDGE WORSTER: That was going to be my question, given that this was not your appeal.
MR BULEY: What we did do was prepare the bundle for the court. But it is not £3,500 on documents. That is my understanding. Let me check.
JUDGE WORSTER: I am not sure that is right.
THE APPELLANT: Have you got a copy of the work done on documents?
JUDGE WORSTER: We are just identifying what that box actually means, Mr Pengelly.
MR BULEY: I had better just check that, my Lord. My Lord, I am so sorry, I think I have misunderstood this schedule. I think what I am going to invite your Lordship to do is as follows: if you look at the number of hours claimed prior to the heading "work done on documents", that comes to seven and a half hours. Can I invite your Lordship to say in addition to that that it was reasonable to spend two and a half hours on documents, effectively, preparing the court bundle, which would make a figure of 10 hours at the rate which is £317 per hour. I suspect I am underselling Mr Hothersall's work there but in the circumstances, given where we are, I am going to do it that way rather than try and justify a higher figure. That would be 10 hours work altogether, plus the 2 hours for him, which is separately accounted for below. I will do the maths in a moment. Plus attendance at court is £6,34 and then plus the fee for me, which is in total £1,350, which makes £5,054, my Lord.
JUDGE WORSTER: I got to £4,854. Anyway, around about £5,000. Mr Pengelly?
THE APPELLANT: The query I have is the attendances on opponents, telephone calls, would that be telephone calls with myself?
JUDGE WORSTER: It depends under which heading. Some telephone calls to you; letters out is point 8; and telephone calls, point 8.
THE APPELLANT: Would that be to myself?
JUDGE WORSTER: I assume so.
THE APPELLANT: 'Cos I've not spoken to Mr Hothersall. So I'd like to know who he was speaking to 'cos he's not spoken to me or my father on that one.
JUDGE WORSTER: Right. Any other queries you have got? The work done on documents, effectively has been -- I say removed, what Mr Buley has put forward is a slightly less complex calculation, which is that overall his solicitor has spent about 10 hours on this, two and a half hours being the preparation of the bundle.
THE APPELLANT'S FATHER: He didn't say he was going to charge for that, to be honest.
JUDGE WORSTER: A bundle needs to be prepared.
THE APPELLANT'S FATHER: It would have been nice if he'd told us that up front 'cos we could have just done that.
THE APPELLANT: The interpretation was that he was doing us a favour, not it was going to cost us.
THE APPELLANT'S FATHER: And not how much it was going to cost us.
JUDGE WORSTER: So what is it you say?
THE APPELLANT: The telephone call is -- I haven't spoken to --
THE APPELLANT'S FATHER: So we don't really know what that's going to. Just to say we're not entirely happy with the fact that he's collated it and what he's done and he's going to charge us for it. He didn't say that at all. So I'm not too happy with that.
THE APPELLANT: There is no (Inaudible) compile the bundle.
JUDGE WORSTER: Anything else you want to say?
THE APPELLANT: It's just an opportunist moment to --
JUDGE WORSTER: Sorry?
THE APPELLANT: I think it was an opportunist moment to say we'll do that.
JUDGE WORSTER: Mr Buley, before I had seen the statement of costs, it seemed to me to be between £4,000 and £5,000. So I am minded to assess at £4,500.
MR BULEY: I am in your Lordship's hands.
JUDGE WORSTER: It seems to me 10 hours is probably not out of the way and £4,500 takes account of the points that have just been made by Mr Pengelly and his father.
MR BULEY: I am content with that.
JUDGE WORSTER: It seems to me broadly about right. So what I am going to do, Mr Pengelly, is summarily assess the costs at £4,500. I have taken account of what you have said and I have reduced the figure from the figure that might be reasonable. How you pay that is a matter that you might like to speak to Mr Buley about. The order requires payment within 14 days unless some other agreement it made but you may be able to speak to the lawyers about that before you leave, so at least you know what is going forward. No doubt you will deal with that, Mr Buley. Thank you very much.