England and Wales Lands Tribunal

Thomas's London Day School v Valuation Officer [2004] EWLands RA_28_2003 (11 May 2005)

RA/28/2003

LANDS TRIBUNAL ACT 1949

RATING – alteration of rating list – effective date – 1990 list – agreement following proposal – inaccuracy in list when compiled – VO altering list with effective date 1 April 1992 – ratepayer proposal to make effective date 1 April 1990 to take advantage of transitional relief – validity of proposal – Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993, regs 4, 13, 15 and 44 – held proposal invalid – if valid effective date would have been determined as 1 April 1992

IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE

LONDON (SOUTH WEST) VALUATION TRIBUNAL

BETWEEN THOMAS'S LONDON DAY SCHOOL Appellant

and

MARK JORGENSEN Respondent

(Valuation Officer)

Re: School and Premises

Thomas's Preparatory School

17-19 Cottesmore Gardens

London W8 5DR

Before: The President

Sitting at Procession House, 110 New Bridge Street, London EC4V 6JL

on 18 April 2005

J P Scrafton, solicitor, for the appellant.

Timothy Morshead instructed by Solicitor of the Inland Revenue for the respondent.


 


The following cases are referred to in this decision:

Canning (VO) v Corby Power Limited [1997] RA 60.

Marks and Spencer Plc v Fernley (VO) [1999] RA 125, 409

The following further cases were referred to:

Appeal of Broadway (VO) [1998] RA 71

Appeal of Ebury (VO) [2003] RA 261

Lamb and Shirley Ltd v Bliss (VO) [2001] RA 99

DECISION

1. This appeal against a decision of the London (South West) Valuation Tribunal raises issues on the application of the Non-Domestic Rating (Alteration of List and Appeals) Regulations 1993. It relates to the rating assessment in the local non-domestic rating list for the Council of the Royal Borough of Kensington and Chelsea compiled on 1 April 1990 of a hereditament consisting of two adjacent terraced houses at 17-19 Cottesmore Gardens, London W8 5PR. The accommodation is on four floors, and it is agreed for the purposes of this appeal that at all material times the appellant, a firm, has been the occupier of the hereditament and has occupied and used the whole of it as a day school. An entry for the hereditament was included in the list as originally compiled showing the hereditament as "School & Premises (Part), Thomas Preparatory, 17-19 Cottesmore Gardens, London W8 5PR" with an assessment of £50,500 rateable value. The inclusion of the word "(Part)" reflected the fact that the hereditament was then being treated as a composite hereditament, the accommodation thought to be domestic comprising the first and second floors of 19 Cottesmore Gardens.
2. On 12 April 1990 a proposal was made on behalf of the appellant by Messrs Samuel & Co seeking a reduction in the assessment. It was withdrawn by the appellant on or about 27 September 1994, the form being signed by Mr D L Thomas, one of the joint principals of the firm. On 29 June 1990 the valuation officer altered the list to take account of alterations to the property that had occurred before 1 April 1990, increasing the assessment to £66,500 RV. The hereditament continued to be shown as a composite hereditament. A deemed appeal against that alteration arose by virtue of the earlier, then unresolved, proposal. On 30 November 1992 the VO made a further alteration to the list, having realised that the appeal hereditament was then wholly non-domestic. The new entry was stated to take effect on 1 April 1992, omitted the word "(Part)" from the description, and showed an assessment of £97,500 RV. A deemed appeal arose in relation to that alteration also.
3. On 27 September 1994 the two deemed appeals were settled by agreement. Mr Thomas signed the agreement forms. The description in relation to the earlier appeal was shown to remain unchanged (with the inclusion, therefore, of the word "(Part)"), the assessment was given as £47,900 RV, and the effective date was stated to be 1 April 1990. The description in relation to the later appeal omitted the word "(Part)", the assessment was given as £69,800 RV, and the effective date was stated to be 1 April 1992. The VO altered the list in accordance with these agreements. It is the alteration made in consequence of the second of these agreements that is the subject of the present proceedings, and I will refer to it simply as "the alteration".
4. Because of the operation of the transitional relief provisions it would have been advantageous to the ratepayer if the higher assessment, £69,800 RV, had taken effect on 1 April 1990, rather than on 1 April 1992 as agreed. Under regulation 15(3) the ratepayer could have requested 1 April 1990 to be substituted for 1 April 1992 on the date on which the alteration took effect, but it did not do so. Any such request could only have been made within 6 months of the day when the list was altered.
5. On 6 March 2001, some six and a half years after the making of the alteration, Goodman Nash Ltd, as agent for the appellant, made a proposal seeking to alter the effective date of the alteration to 1 April 1990. Regulation 4 of the 1993 Regulations prescribed the circumstances and period within which proposals might be made in relation to 1990 lists. In general it restricted an interested person's right to make a proposal to alter the list to the period of 6 months from its compilation (regulation 4(2)); but under regulation 4(1)(d), if an interested person was of the opinion that the list was inaccurate because it ought not to have shown that some part of a hereditament which was shown in the list was domestic property, he was able to make a proposal to alter the list at any time before the first anniversary of the compilation of the next list. In relation to proposals to alter a 1990 list, therefore, the proposal would have to have been made on or before 1 April 1996 if reliance was being placed on regulation 4(1)(d). However, the proposal placed reliance on another provision in regulation 4, paragraph (4). So far as material this provided:

"(4) Where a relevant authority or interested person is of the opinion that by reason of –

(a) …

(b) a decision of a valuation tribunal, the Lands Tribunal, or a court determining an appeal or application for review from such tribunal, the rateable value or any other information shown in the list for any hereditament is wrong, that authority or person may, within the period of six months beginning on the day on which … the decision was given but … before 1 April 2001, make a proposal for an appropriate alteration."

The proposal made reference to a decision of the London (North East) Valuation Tribunal of 24 October 2000 in relation to five primary schools in the London Borough of Tower Hamlets which held that the valuation officer had had the power to make changes in a valuation list in order to show a correct value at 1 April 1990, notwithstanding that changes in the list had been made to reflect material charges of circumstances since the date of compilation.

6. In the present proceedings the contention of the appellant is, firstly, that, by virtue of the operation of regulation 4(4) and the LVT decision on which reliance was placed, it was open to the appellant to make the proposal of 6 March 2001; and, secondly, that the correct effective date of the alteration to £69,800 RV is 1 April 1990 and that the Tribunal, being thus seised of a valid appeal, may order the list to be altered so as to show that. The contention of the VO is that the proposal was invalid since the circumstances in which it was made did not fall within regulation 4(4); and, in any event, that the Tribunal would not have power to order the VO to alter the list so as to show 1 April 1990 as the effective date. These contentions were advanced before the valuation tribunal, which determined the matter in favour of the VO.
7. I deal first with the issue of the validity of the proposal. Mr J P Scrafton for the appellant frankly described the valuation tribunal decision of October 2000 (in what was referred to as the "Cayley" case, after the first of the five primary schools to which it related) as a peg on which to hang the ratepayer's proposal for the effective date of the alteration to be entered as 1 April 1990. It was too late to make such a proposal under the other provisions of regulation 4, and those advising the ratepayers had sought to find a decision on which to hang the contention that they wished to advance. The decision would only be of assistance to it in this respect if in making the proposal it was of the opinion that by reason of the decision the rateable value or other information shown in the list for the hereditament was wrong: see the decision of the Tribunal (Judge Marder QC, President) in Canning (VO) v Corby Power Limited [1997] RA 60.
8. I was provided with a copy of the Cayley decision, which was given by the London (North East) Valuation Tribunal on 24 October 2000. The facts are not wholly clear from the decision, but it appears that the valuation tribunal decided that the VO had power to make alterations to the list in relation to the hereditaments with 1 April 1990 as the effective date notwithstanding that alterations to the list had previously been made following material changes in circumstances that had occurred during the currency of the list. That is the way Mr Scrafton puts it in his submissions, and I accept it. There is, however, nothing in the case advanced by the appellant to suggest that the entry in the list that is the subject of the present appeal is wrong "by reason of" this decision. The statement of case simply said without elaboration: "The decision of the London (North East) Valuation Tribunal relied on by the Appellant is making its proposal provided a sufficient causal link to establish the validity of the proposal in this appeal." Moreover, in contending that the Tribunal should determine 1 April 1990 as the effective date – the substantive point in issue, the appellant places no reliance on the LVT decision in the Cayley case. The contentions are based, as they have to be, on the effect of regulations 13, 15 and 44, and I consider these below. The contentions are concerned only with what the effective date should be and the power of the Tribunal to order its insertion. Success or failure on these matters does not depend in any way on whether a VO has power to alter a rating list retrospectively in relation to a period before a material change of circumstances occurred. That was what, it appears, the Cayley case was about. Here the whole basis of the appellant's case is that there has been no material change of circumstances since the 1990 list was compiled. It says that the change to a wholly non-domestic hereditament took place before 1 April 1990, and this is agreed. The case as argued is not that the entry in the list is wrong "by reason of" the decision in the Cayley case, and I cannot see anything to show that the ratepayer could have been of the opinion that it was. Regulation 4(4) did not give it the right to make a proposal, and the proposal was thus invalid. That is sufficient to dispose of the appeal, but I will go on nevertheless to deal with the substance of the appellant's case.
9. In order to set in context the contentions of the parties on the substantive issue certain of the provisions of the 1993 Regulations, as amended by later regulations in ways that are material to this case, need to be set out. The relevant provisions, in regulations 13, 15 and 44, are these:

"13. Time from which alteration is to have effect: pre-2000 lists

(1) This regulation has effect subject to regulations 15, 16 and 44 and in relation to any list compiled before 1^st April 2000.

(2) Subject to the following provisions of this regulation, an alteration effected so as –

(a) to show in or, as the case may be, to delete from a list any hereditament which, since the list was compiled, –

(i) has come into existence or ceased to exist;

(ii) has ceased to be, or become, domestic property or exempt from non-domestic rating;

(iii) has ceased to be, or become, required to be shown in the central list; or

(iv) has ceased to be, or come to form, part of an authority's area by virtue of a change in that area; or

(b) to reflect in a list part of a hereditament becoming, or ceasing to be, domestic property or exempt,

shall have effect from the day on which the circumstances giving rise to the alteration occurred…

(6) Where for the purposes of paragraph (2) or (5) the day on which the relevant circumstances arose is not reasonably ascertainable –

(a) where the alteration is made in pursuance of a proposal …, the alteration shall have effect from the day on which the proposal was served on the valuation officer; and

(b) …

(c) in any other case the alteration shall have effect from the day on which it is entered in the list.

(6A) Subject to paragraphs (8A) and (8B), an alteration made correct an inaccuracy in a list which arose in the course of making an alteration in connection with any of the matters mentioned in paragraph (2) or (5) shall have effect from the day from which that previous alteration fell to have effect.

(7) Subject to paragraphs (8A) and (8B), an alteration made to correct an inaccuracy in a list on the day it was compiled shall have effect from that day.

(8) Subject to paragraphs (8A) and (8B), an alteration made to correct an inaccuracy in a list (other than an alteration which falls to take effect as provided in the foregoing provisions of this regulation) shall have effect from the day on which the list became inaccurate.

(8A) An alteration made to correct an inaccuracy (other than one which has arisen by reason of an error or default on the part of a ratepayer) –

(a) in a list on the day it was compiled; or

(b) which arose in the course of making a previous alteration in connection with the matters mentioned in paragraphs (2), (5), (6A), (7) or (8),

which increases the rateable value shown in the list for the hereditament to which the inaccuracy relates shall have effect from the day on which the alteration is made.

(8B) Where an alteration is made in accordance with paragraph (8A) and within the period of six months beginning with –

(a) in the case of an alteration of which notice is given under regulation 18(2), the day of service of the notice; and

(b) in any other case, the day on which the alteration is made,

the person who at the time of the alteration was the ratepayer in relation to the hereditament to which the alteration relates requires the valuation officer, by notice in writing served on him, to substitute for the day shown in the list the day that would have been determined, as regards that alteration, in accordance with the former regulation 13, the valuation officer shall alter the list accordingly.

(8C) Notwithstanding the foregoing provisions of this regulation, where an alteration falls to be made after 31st March 2001 it shall have retrospective effect only if it is made in pursuance of a proposal.

(9) Any reference in the forgoing provisions of this regulation to a hereditament coming into existence or ceasing to exist includes a reference to a hereditament which comes into existence or ceases to exist by virtue of –

(a) property previously rated as a single hereditament becoming liable to be rated in parts, or

(b) property previously rated in parts becoming liable to be rated as a single hereditament, or

(c) any part of a hereditament becoming part of a different hereditament.

(9A) In this regulation, 'the former regulation 13' means this regulation before the amendment made by regulation 2 of the Non-Domestic Rating (Alteration of Lists and Appeals) (Amendment) Regulations 1994.

15. Alterations on and after 1 April 1992

(1) Where, in relation to an alteration which falls to be made on or after 1^st April 1992, other than an alteration –

(a) made in pursuance of paragraph (3) or (4) (completion notices) of regulation 13,

(b) required to be made as mentioned in regulation 16,

(c) made in pursuance of the order of a tribunal under Part VI of these Regulations, or

(d) an alteration to which paragraph (3E) applies (a 'relevant alteration'),

the day determined in accordance with regulation 13 as the day from which it has effect precedes 1^st April 1992, the alteration shall have effect, subject to paragraph (2), from 1^st April 1992…

44. Orders

(1) On or after deciding an appeal under regulation 12 or 28, the tribunal may, subject to paragraph (4), require a valuation officer, in consequence of the decision, by order to alter a list in accordance with any provision made by or under the Act."

10. Mr Scrafton's contention is that regulation 13(2)(b) applies in the present case, since the alteration to £69,800 RV with the omission of the word "(Part)" was effected to reflect part of the hereditament ceasing to be domestic property. It was agreed for the purposes of this appeal that the hereditament had become wholly non-domestic prior to 1 April 1990, so that the effective date under this provision should be 1 April 1990. This contention is, in my judgment, wrong, since the language of paragraph (2) is not apt to cover changes that occurred before the list was compiled. The changes to which sub-paragraph (a) relates are expressly stated to be ones that have occurred "since the list was compiled". No such words appear in sub-paragraph (b), but they do not need to, since the use of the present participle in that sub-paragraph ("becoming, or ceasing to be") clearly implies events that have happened during the currency of the list. Moreover, and conclusively, the final words of the paragraph – "shall have effect from the day on which the circumstances giving rise to the alteration occurred" – can only apply to circumstances occurring after the list had been compiled. The alteration could not relate to a date prior to the currency of the list.
11. The alteration in issue here is one that was made to correct an inaccuracy in the list on the day it was compiled. It is paragraph (7), therefore, that applies. That paragraph provides that, subject to paragraph (8A) and (8B), each alteration is to have effect from the day the list is compiled. Under paragraph (8A) an alteration that increases the rateable value has effect from the day on which the alteration is made. Under paragraph (1) this provision is made subject to regulation 15, which provides that (with certain exceptions) alterations that would otherwise take effect under regulation 13 on a date before 1 April 1992 should take effect on 1 April 1992. So the effect of these provisions in relation to the alteration with which the present appeal is concerned is clear: since it was made to correct an inaccuracy in the list on the day it was compiled and was made after 1 April 1992, it is to take effect on 1 April 1992.
12. Mr Scrafton, however, advances an alternative argument. He says that, provided the appeal is valid, the Tribunal has power under regulation 44(1) to make orders in relation to the alteration going beyond the powers of the VO. Even if, therefore, the VO was constrained by regulation 15 to make 1 April 1992 the effective date, this Tribunal is not so constrained. Mr Scrafton refers to the decision of the Court of Appeal in Marks and Spencer Plc v Fernley (VO) [1999] RA 409. In that case a hereditament had been erroneously entered as three hereditaments in the rating list as compiled. In March 1992 the VO altered the list so as to delete the three entries and to insert a single entry at a value of £13,767,500 with an effective date of 1 April 1991. Under the regulations as then applying (the Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1990) the VO's alteration could not be backdated to 1 April 1990 even though the error which the alteration was designed to correct was one in the list as compiled. The alteration had to take effect on 1 April 1991. The ratepayer made a proposal challenging the VO's alteration on the grounds, among others, that the assessment was excessive and that the effective date should not be the one shown. In January 1994, by which time the 1993 Regulations were in force, the valuation tribunal determined that the assessment should be reduced to £10.8m and it ordered the VO to alter the list to show this amount, with effect from 1 April 1990. Before the Lands Tribunal the parties agreed that the assessment should be further reduced to £10.2m, and the Tribunal (Mr P H Clarke FRICS) ordered that the VO should alter the list so as to show this figure with an effective date of 1 April 1990 (see [1999] RA 125 at 140-141). The Member ordered that as the effective date rather than 1 April 1991, because the restriction on backdating regulation 15(1)(c) of the 1993 Regulations did not apply to an alteration made in pursuance of an order of a tribunal under the regulations and the effective date was therefore prescribed by regulation 13(7). The Court of Appeal upheld this decision, rejecting the ratepayer's contention that neither the valuation tribunal nor the Lands Tribunal had been able to backdate the alteration in a way that the VO could not.
13. Mr Scrafton's contention that in the present case, if there is a valid appeal, the Tribunal ought to order the alteration to be backdated to 1 April 1990 is not, in my judgment, correct. The alteration under consideration for the purposes of the application of regulations 13 and 15 is the one made by the VO, following the agreement of 27 September 1994, that omitted the word "(Part)" from the description of the hereditament and inserted an assessment of £69,800 RV. The description and the assessment are not the subject of challenge in these proceedings, and there is thus no alteration that falls to be "made in pursuance of the order of a tribunal" within regulation 15(1)(c). In Marks and Spencer by contrast both the valuation tribunal and the Lands Tribunal ordered that the list should be altered, and it was this that meant that the restriction in regulation 15(1) on backdating to 1 April 1992 did not apply and accordingly that pursuant to section 13(7) the effective date was 1 April 1990. Here regulation 15(1) applies, and neither the valuation tribunal nor the Lands Tribunal would have power under regulation 44(1) to order any date other than 1 April 1992 to be inserted as the effective date.
14. The appeal must therefore be dismissed. I heard submissions on costs and the parties agreed that costs should follow the event. The appellant must pay the respondent's costs, such costs if not agreed to be the subject of detailed assessment by the Registrar on the standard basis.

11 May 2005

George Bartlett QC, President