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Moses v Valuation Officer [2005] EWLands RA_64_2004 (06 October 2005)

RA/64/2004

LANDS TRIBUNAL ACT 1949

RATING – hereditament – restaurant – refuse problem and concerns over fire escape – application to delete from rating list – validity of proposals - appeal dismissed- Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993 (SI 1993 No291) Reg 4A para 6

IN THE MATTER of an APPEAL against a DECISION of the

LONDON (NORTH WEST) VALUATION TRIBUNAL

BETWEEN MOSHE MOSES Appellant

and

BARRY LEAHY Respondent

(VALUATION OFFICER)

Re: 148 – 150 Brent Street, London, NW4 2DR

Before: P R Francis FRICS

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

1 September 2005

Moshe Moses, the appellant in person

Barry Leahy, respondent Valuation Officer, with permission of the Tribunal

DECISION

This is an appeal from a decision of the London (North West) Valuation Tribunal ("the VT") dated 21 September 2004 relating to shops and premises at 148 – 150 Brent Street, London, NW4 2DR ("the hereditaments"). It was made by Mr Moshe Moses, the ratepayer and lessee, in a notice dated 18 November 2004. The appeals to the VT arose from proposals by Mr Moses to have the hereditaments deleted from the 2000 rating list on the grounds that the shops were incapable of occupation due to there being no provisions for refuse collection from the residential upper parts of the building, and there being inadequate fire escape precautions therefrom. The proposals followed earlier proposals made by Mr Moses, which resulted in a VT decision on 19 September 2001 dismissing the appeals. There had been an earlier appeal in relation to the 1995 rating list. The VT dismissed the appeals in the present case on the basis that it "finds no relevant change in circumstances that could assist the ratepayer from those found in any of the previous appeals".

The appellant appeared in person, with permission of the Tribunal as did Mr Leahy, the respondent Valuation Officer. However, at the commencement of the hearing, Mr Moses, on being invited to present his case, demanded that I sign a statement stating that if I were a hypothetical tenant I would not, due to the construction and condition of the building, be prepared to sign a lease. He said that if I did not sign such a statement, I would not be qualified to make a decision, and he would leave the Tribunal. I advised him that I could not make any such statement and encouraged him to present his evidence. Mr Moses then requested an adjournment which was refused. At that point, the appellant left the hearing and I heard only the evidence of Mr Leahy.

Facts

From the appellant's statement of case, the VO's reply and the evidence produced by Mr Leahy, I find the following facts. The hereditaments comprise two shops occupying the ground floor of a building that consists of the ground floor commercial units and three floors of residential accommodation above. The residential accommodation is accessed solely from a central stairway leading from the street, between the two shops. The shops were formerly occupied by the appellant who claims he has been unable to use them since 12 May 1996 for the reasons stated in paragraph 1 above but, since 1 September 2002, they have been occupied by the "Lahore" restaurant and take-away who are the current ratepayers, and prior to that, from 1 December 2001, were occupied by a restaurant trading as Barbeque Tonight..

The 2000 Rating List

The entries in the compiled 2000 Rating List were shown as:

Shop and Premises, 148 Brent Street, NW4 2DR £14,000 RV

Shop and Premises, 150 Brent Street, NW4 2DR £7,200 RV

On 18 April 2000 the appellant made proposals, with an accompanying letter and copy correspondence, against each of the compiled lists seeking reductions in the rateable values on the grounds that they were inaccurate. The detailed reasons were given as "The condition and construction of the building being such, causing the rent and rateable value to be reduced by 25%. We also refer you to our attached letter…" Following receipt of those proposals, the VO discovered that the entry for 148 Brent Street was inaccurate due to an error in the recorded survey data, and on 31 October 2000 the rating list was altered to RV £11,250 for that hereditament (effective date 1 April 2000). Also, following concerns that the VO had about the contents of the correspondence accompanying the appellant's proposals, in that it appeared Mr Moses was seeking to have the hereditaments deleted from the rating list, rather than reduced as stated in the proposal, he was invited to submit further proposals seeking deletion as a specific ground.

On 17 November 2000, the appellant duly served two further proposals, seeking deletion of the entries on the grounds of "Risk to lives and health of the six families on the three floors above and our take-away and kitchen on the ground floor as determined by experts and heard at the valuation and Lands Tribunals as confirmed by the adjudicator – Dame Barbara Mills QC". The proposals were heard as appeals by the VT on 5 September 2001 at which the appellant complained of two main problems. Firstly, due to the fact that there were no proper external facilities for the storage of domestic waste from the upper floors, refuse sacks frequently accumulated on the pavement outside the building. A reduction of 25% was sought as this was considered to be unneighbourly conduct and a health hazard. Secondly, Mr Moses considered there to be a fire risk due to the aforementioned refuse accumulation and risk to life due to the limited means of escape. For this latter reason, he said he could not operate his restaurant business, and sought deletion from the list.

The VT issued its decision on 19 September 2001 and in dismissing the appeals said:

"Turning to the specific disabilities, the tribunal is greatly assisted by the previous decisions on the appeal property [VT and Lands Tribunal decisions in connection with the 1995 Rating List, to which I shall turn]. In terms of the refuse accumulation, little seems to have changed since the previous decisions and the tribunal is mindful of the basic premise that unneighbourly conduct in any of its many guises is seldom if ever grounds to reduce an assessment. The tribunal is not convinced to make any change in this regard.

In terms of Mr Moses' inability to use the premises for the purpose he wishes, the previous decisions pointed out that the premises vacant and let must be considered to be a shop unit and not necessarily a restaurant business with a higher than average risk of fire. Following the Court of Appeal in their recent decisions on public houses at Milton Keynes [c/f Williams (VO) v Scottish and Newcastle Retail Ltd [2001] EWCA Civ 185], the Valuation Tribunal is not convinced that this argument can still apply as the mode or category of occupation should more properly be considered as a restaurant rather than a generic shop. It may have been possible to construct an argument on this basis, but Mr Moses has not done so and in considering this issue the tribunal is satisfied that a hypothetical tenant for the ground floor property would not suspend his business operations in the way that Mr Moses had."

No appeal was made to the Lands Tribunal in respect of that decision.

Following extensive correspondence and communications with the VO and other statutory and judicial bodies over the ensuing two years, in which Mr Moses alleged that the VT had been misled, on 22 October 2003 he submitted a further proposal and accompanying letter seeking deletion of the hereditaments from the rating list with effect from 12 May 1996. On being advised that the proposals were invalid, further proposals were submitted on 12 November 2003 with an effective date of 1 April 2000 on the grounds that "Property made unfit for use and occupation". The proposals were subsequently heard as appeals by the VT and in its decision of 12 September 2004, it said:

"There is a long history associated with the appeal hereditaments. Mr Moses made proposals against the 1995 local rating list, which culminated in appeals to the Lands Tribunal. He has also made previous proposals against the 2000 rating list, and the ensuing appeals were determined by the Valuation Tribunal in September 2001.

….In essence Mr Moses contends that he has been forced to close his business on the ground floor of the building (a restaurant) due to the occupation of the upper residential parts of the building.

Mr Moses contends that the property is unfit for occupation on the grounds that there is no provision for refuse collection from the residential parts and that the property is unsafe due to inadequate fire precautions and means of escape….[and] maintained that the property was incapable of finding a tenant ie someone prepared to take a lease of the appeal hereditament. He admitted that a restaurant business had agreed to occupy the premises since 2001 on the basis of meeting the rent and rates, but there had been subsequent issues with such payments and the legal standing of these occupiers.

Under cross-examination Mr Moses accepted that the fire authority was content that the building met or exceeded the necessary requirements; that no physical changes to the hereditament occurred before occupation in 2001 and that there is no legal bar to occupation of the property".

Noting then that the appellant indicated his desire to leave the proceedings, which he did, the VT went on to say, after hearing submissions from the VO to the effect that Mr Moses' decision to close his business was a personal one:

"The tribunal begins by questioning whether they even have jurisdiction to entertain this appeal. The proposal has been made on what would appear to them to be very similar grounds to those made in April and November 2000 and determined by the tribunal in September 2001. It might be the case that the proposal could not have been properly made as a result of this and therefore the tribunal would be acting ultra vires in hearing this appeal".

However, having not heard argument or submissions on that aspect, the VT decided to proceed to the substantive issue and concluded:

"On the submissions made today, the tribunal finds no relevant change in circumstances that could assist the ratepayer from those found in any of the previous appeals. Mr Moses chooses not to run a business from the appeal hereditaments for reasons that may be important to him, but would not preclude another occupier from doing so.

In those circumstance (sic) the appeals must be dismissed".

The 1995 Rating List

On 12 September 1997 the appellant served proposals against the entries in the 1995 rating list, seeking deletion of them on the grounds that the property was unfit for occupation. As the VO did not consider them to be well founded the matter was referred to the VT, and at the hearing Mr Moses cited the reasons as fire and health hazards caused by the accumulation of rubbish from the occupiers of the upper floors. In its decision of 14 May 1998, the VT dismissed the appeals saying, after reference to case law relating to the rules of Rebus sic stantibus, that the tribunal could see no reason why the premises could not be occupied as a shop and therefore fall to be valued as such.

Mr Moses appealed to the Lands Tribunal in respect of 150 Brent Street alone (because the section the restaurant occupying 148 had a marble floor and did not contain equipment likely to cause a fire) on 19 June 1998. In his decision of 18 January 1999 (RA/78/1998 Unreported) the Member, NJ Rose FRICS said, at p7, (after hearing the evidence of Mr Nissim Moses for the appellant, and Mr Stephen Smith (VO):

"In my judgment the legal position is clear and Mr Smith is right to value the appeal hereditament as available to let for a variety of retail uses, most of which would not attract the particular fire and health hazards which are inherent in a restaurant use. There is no justification for removing the property from the rating list…."

Mr Rose also considered whether a hypothetical tenant would reduce his bid for the premises due to the existence of bags of rubbish in the vicinity, and accepting Mr Smith's evidence that it was not an uncommon practice in North London for residents to leave their domestic rubbish in plastic bags on the pavement, concluded that he would not.

The appeal was therefore dismissed.

The issues

The issues for my determination in this appeal are firstly whether the appellant's proposals were invalid by reason of reg 4A(6) of the Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993 and secondly, if they are valid, whether or not the hereditaments should be deleted from the rating list.

Appellant's case

The appellant's statement of case confirmed that he had not occupied the premises since 12 May 1996, pleaded that the current occupiers were not tenants, alleged that both the VT and the Lands Tribunal had been misled in the previous appeals, and included some documentation in connection with them together with a number of newspaper cuttings relating to fires at restaurant premises. No further evidence was presented to the Tribunal, and, as I have said, Mr Moses left the proceedings without hearing the Valuation Officer.

Valuation Officer's case

Mr Leahy swore his expert witness report and presented additional documents including photographs of the appeal hereditaments and location plans, copies of which had been given to the appellant immediately prior to the hearing.

It was the VO's principal case that the appeals dated 12 November 2003 had been made on precisely the same grounds and facts as the earlier appeals dated 17 November 2000. By virtue of para 6 of Regulation 4A of the Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993 (SI 1993 No291) the subsequent appeals must be invalid as they show no legal basis on which to make a proposal to alter the valuation list, or make a deletion from it. Whilst accepting that the matter of validity is confined to the 2000 rating list, Mr Leahy considered it was relevant to the case to note that the same issues have previously been the subject of appeals to the VT and the Lands Tribunal in respect of the 1995 rating list.

In the event that this Tribunal was not minded to accept the invalidity argument, Mr Leahy said that the hereditaments fell to be valued in accordance with the Local Government and Finance Act 1988, and in particular having regard to the valuation assumptions contained within Schedule 6(2) which provides:

The rateable value of a non-domestic hereditament [none of which consists of domestic property and none of which is exempt from local non-domestic rating] shall be taken to be the amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year [on these three assumptions-

(a) the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;

(b) the second assumption is that immediately before the tenancy begins the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic;

(c) the third assumption is that the tenant undertakes to pay all usual tenants 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 the rent mentioned above.]

It was contended that the use of the upper floors of the building for residential purposes, and the arrangements for refuse storage and collection are not unusual; the alleged risk of fire and associated danger to life to occupiers of the upper floors was not unusual and would not be a factor which would prevent a hypothetical tenant from occupying the ground floor shops. There are no statutory or legal reasons why the upper floors cannot be occupied for their current purposes – as particularly confirmed by the Fire Officer in relation to an earlier appeal, and the appeal hereditaments are capable of actual and beneficial occupation.

It was important to note that an unoccupied property is not in actual use, and the hypothetical tenant within the rating hypothesis can be considered for all potential uses that do not offend the rule of Rebus sic stantibus. Nevertheless, the appeal hereditaments are, in fact, occupied and have been so since Centa Management Ltd, trading as Barbeque Tonight took occupation on 1 December 2001. They vacated on 31 August 2002, and the current ratepayers, Lahore Ltd took occupation on the same date and remain there to this day.

There had been no new evidence produced in this appeal, Mr Leahy said, that could possibly bring in to question the fact that the decision of the VT was fair, reasonable and correct in law. It was also important to note that there was no appeal on the grounds that the entries in the rating list were inaccurate. The amounts at which the rateable values were set were not, therefore, in question. Whether or not the proposals were invalid, this appeal should be dismissed.

Conclusions

Regulation 4A of Schedule 6 to the Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993 (SI 1993 No291) states (where relevant):

[4A Circumstances in which proposals may be made

(1) The grounds for making a proposal to alter a list are as follows-

(g) a hereditament shown in the list ought not to be shown in the list;

(6) No proposal may be made, other than on the grounds set out in sub-paragraph (d) of paragraph (1), where a proposal to alter the same list in relation to the same hereditament and arising from the same facts has been considered and determined by a valuation tribunal (otherwise than as mentioned in regulation 40(4)) or, on appeal under regulation 47, by the Lands Tribunal.

In my judgment, the VO's submission as to the validity of the proposals is correct. The proposals are to alter the same (2000) list in relation to the same hereditaments as considered in the appeals that were determined by the VT on 19 September 2001, and they are based on the same facts as those that gave rise to the earlier proposals. The appeals must therefore be dismissed on this ground.

Even if the proposals had been valid, the fact remains that I have neither heard nor received any evidence to persuade me that the VT was wrong in determining, as the substantive issue, that there was nothing to preclude another occupier from occupying the appeal hereditaments. Indeed, the premises have been occupied for restaurant/takeaway purposes since December 2001 (although not by the appellant) and any dispute that there may have been over whether or not the current ratepayers occupy under a formal tenancy, is not, in my view relevant to the issues before me. There is no justification for deleting the entries from the rating list.

I therefore dismiss the appeals. The VO said that he was not making an application for costs, and thus I make no order.

Dated 6 October 2005

(Signed) P R Francis FRICS