UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2010] UKUT 31 (LC)

LT Case Number: RA/13/2009

                                                                                                                                                     

                            TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

                                                                             

RATING – valuation – 2005 list – shop – disturbance caused by roadworks agreed to have affected value – extent of reduction to reflect such disturbance – allowance increased from 15% to 25%

                                                                             

                  IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE

                                              SUFFOLK VALUATION TRIBUNAL

BETWEEN                                    DENNY BROS SUPPLIES                                 Appellant                                                                      LIMITED

                                                                           and

                                                            MANDY FRANKLIN                                  Respondent

                                                              (Valuation Officer)

                                                Re: 48-50 St Andrews Street South

                                                         Bury St Edmunds

                                                         IP33 3PH

                                                         Before: N J Rose FRICS

                                  Sitting at 43-45 Bedford Square, London, WC1B 3AS

                                                              on 2 February 2010

Mr Barry Denny, with permission of the Tribunal, for Appellant

Respondent in person

The following cases were cited:

Re Sheppard (VO)’s Appeal [1978] 1 EGLR 180

Berrill v Hill (VO) [2000] RA 194

Confino v Aluwihare (VO) [1986] RA 178

Morton (VO) v Jones [1986] 2 EGLR 231

Fielder v Baker (VO) (1970) 16 RRC 269

                                                                    DECISION

Introduction

1. This is an appeal by the ratepayer, Denny Bros Supplies Limited, against the decision of the Suffolk Valuation Tribunal (the VT), confirming the assessment in the 2005 rating list of a shop and premises known as 48-50 St Andrews Street South, Bury St Edmunds, IP33 3PH (the appeal property), with effect from 1 June 2007, at £49,500.  The appeal was conducted in accordance with the Tribunal’s simplified procedure.  It concerns the size of the allowance which should be made to reflect disruption due to roadworks in the vicinity of the appeal property.  The appellant was represented, with permission of the Tribunal, by one of its directors, Mr Barry Denny.  The respondent, Mrs Mandy Franklin MRICS of the Ipswich Valuation Office, appeared in person. 

2. The material day is 22 May 2008.  The antecedent valuation date is 1 April 2003.

3. Following a re-survey of the appeal property after the VT had issued its decision, Mrs Franklin reduced her pre-works valuation from £58,000 to £57,000, which is agreed by the appellant.  She maintained her end allowance for roadworks of 15 per cent.  This produced a revised valuation of £48,500, which she supported before me.  Mr Denny contended for an allowance of 25 per cent, producing an RV of £42,750. 

4. I inspected the appeal property and the surrounding area on 3 February 2010, accompanied by Mr Denny, Mrs Franklin and Mr Howard Wright, technical adviser to the Valuation Office, who had accompanied Mrs Franklin at the hearing and gave evidence on regulations relating to the material day and material changes of circumstances.

Facts

5. From the statement of agreed facts and the evidence I find the following facts. 

The appeal property

6. The appeal property is situated at the junction of Kings Road and St Andrews Street South, to which it has extensive frontages on the south side and west side respectively, with a curved frontage at the junction itself.  It comprises part of a two-storey property, formed by amalgamating previously separate terraced buildings and subsequently extended in 2006 when an additional retail area fronting onto Kings Road was built.  Access to the premises is gained via two doorways on the Kings Road frontage and three doorways on to St Andrews Street South.  The first floor areas over 48/49 St Andrews Street South and the 2006 addition fronting Kings Road are separately occupied as residential accommodation and are subject to council tax banding. 

7. The appeal property comprises sales areas, ancillary storage areas, staff kitchen and staff wcs on the ground floor.  A staircase leads from the front of the sales area within 50 St Andrews Street to the sales area on the first floor.  Two further staircases at the rear of the ground floor sales area also lead to the first floor sales area.  The first floor also contains office accommodation, a store and staff wcs.  The total net internal area is approximately 703m², of which some 500m² are on the ground floor.

8. The appellant’s business originally consisted of the supply of stationery.  It now serves three distinct markets.  The two ground floor retail units fronting Kings Road, together with the first floor sales area, sell art and craft goods (trading as Ottewill Art).  The ground floor unit fronting St Andrews Street South closest to the road junction is a stationers (Denny Bros Stationery).  The remaining frontage to St Andrews Street South (approximately half of the total), is occupied by an instant print shop (Sprint Print). 

9. The property enjoys good visibility from both road frontages, and also from Woolhall Street, which effectively forms the fourth limb of a crossroads, and leads east from St Andrews Street South.

Rating list history

10. The appeal property was not originally entered in the compiled 2005 rating list.  Instead the list included three separate hereditaments, described respectively as 48, 49 and 50 St Andrews Street South.  The property as it now stands was entered in the list on 19 December 2006 as Shop and Premises with a rateable value of £58,000 with effect from 11 July 2006.  On 22 May 2008 the VO received a proposal to alter the 2005 rating list in respect of the appeal property, made by Mr Barry Denny.  The proposal was made on the following grounds:

“Circumstances affecting the rateable value of the property changed on 1 June 2007.”

The detailed reasons given  for believing this to be the case were:

“Significantly affected by alterations to Kings Road, commenced June 2007 and currently continuing, as per detailed letters sent April 10 2008.”

11. The proposal sought a reduction in the RV to £26,000 with effect from 1 June 2007.  On 7 August 2008 the proposal was transmitted to the VT as an appeal.  On 18 August 2008 the VO altered the rating list by notice to reflect the effect of the disturbance caused by the development of the Arc Shopping Centre site and resulting street works, which are described below.  The revised entry was £49,500 with effect from 1 June 2007.  The appeal resulting from the material change of circumstances proposal received by the VO on 22 May 2008 was heard by the VT on 8 April 2009 and its decision to dismiss the appeal was given on 24 April 2009.

12. Following a detailed re-survey of the appeal property on 14 September 2009, the VO made the following amendments to the rating list in early October:

RV reduced from £58,000 to £57,000 with effect from 11 July 2006.

RV reduced from £49,500 to £48,500 with effect from 1 June 2007.

RV reduced from £58,000 to £57,000 with effect from 1 April 2009.

The Arc Shopping Centre Development and resulting street works

13. The recently completed Arc shopping centre development (the Arc) is located a short distance north of the appeal property.  It covers around 5.4 hectares and has been built on a site which formerly included a livestock market (closed in 1998), sorting office, public house, public lavatories and car park.  The completed development includes a Debenhams department store, 35 smaller shops, 62 residential apartments above the shops, a multi-purpose public venue, public square, 650 space surface car park and an underground car park with more than 200 spaces.  Part of the redevelopment process included improvements to the streets surrounding the site, including alterations to Kings Road and St Andrew Street South.  Some of the key dates of the development were as follows:

October 2006       -   Part of the Cattle Market car park was closed with a loss of 570 spaces.  Hoarding was put up around the site and pedestrians leaving the remaining Prospect Road car park were re-directed towards Kings Road, or Risbygate Street (to the north of the development site).  The public lavatories fronting St Andrews Street South were closed and temporary accommodation provided in the Risbygate Street car park.  Kings Road became one-way, with traffic being directed up the road in a westerly direction and temporary barriers were erected on the north side of the street to protect pedestrians.

December 2006        -   Construction work commenced.

February/                  -   The sorting office was demolished and preparation work commenced

March 2007                   on the multi-purpose venue and Debenhams, including lowering the ground level and sheet piling.  Basement excavation started, using diggers to dig out chalk.

April 2007               -   St Andrews Street South was closed from the junction with Risbygate Street to the junction with Woolhall Street to allow water, main drainage and electricity connections to be laid.

August/                     -   Kings Road was closed for four weeks between the junctions with St

September 2007            Andrews South and Prospect Row (to the east and west of the appeal property respectively) to allow water main and sewerage works to be carried out.  St Andrews Street South between Risbygate Street and Woolhall Street re-opened.

31 March 2008         -   Kings Road was closed between its junctions with St Andrews Street South and Prospect Row to carry out work for the widening of pavements, re-surfacing of the carriageway and provision of a contra-flow cycle lane in preparation for making the one-way traffic order permanent.  The scheduled duration was twelve weeks.  Work included the use of full height Heras barriers for public protection.

July 2008                  -   Kings Road officially re-opened on 8 July but some work continued until 4 August.  On 21 July St Andrews Street South was closed to motor vehicles, but remained open to pedestrians, cyclists and deliveries to businesses.  This closure allowed works to be carried out to resurface the pavements and highway and new street furniture was installed. 

25 September 2008  -   The footpath from the Cattle Market surface car park to Kings Road via Prospect Row was closed to allow works to be carried out on a retaining wall.  This footpath re-opened on 27 November 2008.

August/                     -   Re-paving works were carried out in St Andrews Street South close to

September 2008            the junction with Kings Road.  These works necessitated the use of half height plastic barriers to keep the public away from the works.

October 2008           -   Works were carried out by EDF to lay a new cable across the junction of Kings Road with St Andrews Street South.  In addition the mini roundabout was removed and replaced with a paved pathway across the junction.

October/                   -   Paving works to Woolhall Street took place from 21 October to 3

November 2008            November.  St Andrews Street South was re-opened to motor vehicles towards the end of November.

December 2008        -   Road resurfacing took place in St Andrews Street South and Woolhall Street between 1 and 3 December.  This work was completed at night.

February 2009          -   A reduced number of car parking spaces was available in the Cattle Market/Arc car park due to resurfacing works.

5 March 2009           -   The Arc shopping centre opened for business.

The appellant’s case

14. Mr Denny said that, following the enlargement of the appeal premises in 2006, trade increased significantly until May 2007, when it was disrupted by work connected with the proposed street alterations.  The disruption suffered as a result of the roadworks adversely affected trade in Kings Road, St Andrews Street South, and the junction between the two, over an extended period of time.  The VT had concluded that the VO’s proposed reduction of 15 per cent was fair and reasonable

“in the absence of any evidence showing that greater allowances had been made for other shops in the locality.” 

However, none of the other premises which had been referred to at the VT hearing had suffered the same level of disruption.  None of them faced the roadworks on three frontages (that is Kings Road, St Andrews Street South and the curved junction).  In fact, they did not suffer from work directly outside their premises at all.  Mr Denny felt that the VO had not appreciated the very substantial effect of this work on the appellant’s business.  She had not visited the property at all during the entire period of the work, or indeed until the appeal had been lodged with the Lands Tribunal.

15. Mr Denny referred to two neighbouring properties which he said had remained empty as a result of the works.  The lease of Unit 4, Kings Road Mews, which fronts Kings Road a short distance to the west of the appeal property, was surrendered in August 2008.  It was re-let in December 2008 with no rent payable until March 2009, after the disruptive work was complete.  The second property was 1 Central Walk, on the corner of St Andrews Street some distance to the north of the appeal property, which remained closed throughout the entire redevelopment period.  It was not re-occupied until early 2009, after the disruption had ended.

16. Mr Denny also referred to two neighbouring properties, which he said had been granted more generous reductions in RV than that awarded by the VT for the appeal property, and more generous than had been agreed or determined for the various properties upon which the VO relied.  The first, Devonshire House, was situated on the opposite side of Kings Road to the appeal property, also at the junction with St Andrews Street South.  It was used as a nightclub.  Its rateable value, based on turnover, was reduced by 20.45% with effect from 13 December 2007.  Following a further decline in turnover, the assessment was reduced again with effect from 31 July 2008, making a total reduction of 43%.

17. The second assessment on which Mr Denny relied was that of a 1980s office block on the north side of Kings Road, immediately to the west of Devonshire House, occupied by the Bury Free Press.  As newspaper offices, these premises were less reliant on passing trade than a shop.  Moreover, they were affected to a lesser extent than the appeal property by the works in Kings Road.  During the period from October 2006, when Kings Road was made a temporary one-way street, all pedestrians were directed to use the north side of the road and prevented from crossing to the south side by means of pedestrian barriers.  Despite the low level of disruption suffered by the Bury Free Press, its RV was reduced by 10% with effect from 27 November 2006 and by a further 2½% from 9 April 2007.

18. Mr Denny said that the severity of the disruption suffered by the appeal property had varied significantly throughout the relevant period.  There had been reduced footfall between June 2007 and April 2008 because of the barrier erected in Kings Road when it was made one-way.  This had made it difficult or impossible for pedestrians to cross from the north side (where they had been channelled) to the south side.  Most disruption occurred between April and August 2008.  The Heras fencing erected in Kings Road had prevented access to the appeal property from the Kings Road doorways. 

19. St Andrews Street South was repaved in August and September 2008.  This work proved to be very disruptive to the three entrances in St Andrews Street, because of the works themselves and because the presence of lorries, diggers and other equipment parked outside the appeal property completely obscured it from view.  In September 2008 EDF Energy dug trenches across Kings Road at its junction with St Andrews Street, immediately outside the main, corner-facing windows of the appeal property.  This work severely discouraged use of the entrances to the craft and stationery shops and again obliterated pedestrian views of the premises.  Between 25 September and 27 October 2008 the pedestrian access into Kings Road from the Cattle Market car park was completely blocked.  This had a devastating effect on foot traffic in Kings Road, as all pedestrians were directed from and to the car park via Risbygate Street.  In October 2008 work recommenced on the Kings Road/St Andrews Street South junction, and consisted of the removal of the mini roundabout and its replacement with a paved pathway across.  Further paving work in St Andrews Street South was carried out in January 2009 and the final works in Kings Road were undertaken in January and February 2009.

20. Mr Denny said that the freehold interest in the appeal property was owned by a sister company of the appellant, with common shareholders.  There was therefore no point in the appellant seeking a rent reduction to reflect the disruption.  At the time of the works the business was expecting increased sales as a result of investments made in 2005 and the enlargement of the premises.  Sales did increase prior to the commencement of the disruption at the rate of 5% in the second half of 2006 and 9% in the first half of 2007, but they did not grow in the second half of 2007 and they dropped by 1.5% in early 2008 and 5% in late 2008.  When the disruption ended sales began to climb again, recording growth of 6.4% in 2009 despite the recession. 

21. Mr Denny estimated that the business had suffered a shortfall in expected sales of approximately £122,000 between June 2007 and December 2008.  He realised that trading figures were not directly relevant to rateable value.  He also accepted that his estimate of loss depended on the accuracy of the sales projections in the business plan for the appellant’s investment programme.  Nevertheless, the depressed sales turnover during the disruption, coupled with the sales growth before and since, provided clear evidence that the rental value had been significantly reduced during the period in question.  In order to reflect the different degrees of disruption suffered during the relevant period, he considered that the RV should be adjusted in one of two ways.  Either it should be reduced by 25% throughout the entire period of disruption, or it should be reduced by 15% between 1 June 2007 and 31 March 2008 and between 1 November 2008 and 31 March 2009, and by 50% during the period of maximum disruption, namely 1 April 2008 to 31 October 2008.

The valuation officer’s case

22. In Mrs Franklin’s opinion, the effect of a temporary material change of circumstances had to be seen in the context of the yearly tenancy and the effect on the annual rent, given the reasonable prospect of continuance.  She contended that rental values had a degree of robustness.  An incoming tenant would note the temporary nature of the nuisance and would be looking to the long run, not just the short term, when making his rental bid.  If the nuisance was sufficiently severe and/or likely to continue long enough to affect the rental bid for a year to year tenancy, an allowance would be appropriate.  The degree of importance attached to transience would vary with the circumstances of a particular case.   

23. Mrs Franklin considered that, whilst the principle of rebus sic stantibus applied to the hereditament and changes to the hereditament (other than minor ones) could not be envisaged, the principle did not apply to the locality.  Consequently, the valuation should take into account any prospect that the external material change of circumstances would end.  Rateable value was an expression of an annual rent.  Consequently, if the temporary nuisance was only expected to last for six months the effect on the annual rent would be less than if the same nuisance lasted the whole year.  Moreover, a temporary disability might have a positive outcome for the occupier of a hereditament.  Whilst street works such as re-paving could cause disruption to a shopkeeper, the end result of a more attractive street scene might well be to boost trade and be welcomed by the shopkeeper.  If so, this was likely to offset in whole or part any tendency by the hypothetical tenant to reduce his rental bid.

24. There were two factors to be considered in deciding whether an external temporary disability had had an effect on the annual value of the hereditament: the severity of the disability and its duration.  There was no evidence of rent reductions having been agreed to reflect the disruption and disturbance caused by the development of the new shopping centre.  The best evidence, therefore, must be that provided by the assessments of comparable hereditaments situated in and around St Andrews Street South and Kings Road and which would have been subject to a similar impact.  A total of 23 proposals had been received in respect of retail properties in Bury St Edmunds citing the Arc development and associated street works.  These comprised 7 proposals in respect of hereditaments in Buttermarket, 4 in St Andrews Street South, 3 in Central Walk, 5 in Cornhill, 1 in Brentgovel Street, 1 in Abbeygate Street, 1 in Kings Road and 1 in Cornhill Walk.  Three appeals had been the subject of a decision of the VT awarding a reduction in assessment (two appeals on 2 Central Walk and one relating to the appeal property).  Five appeals were settled by agreement and 15 were withdrawn.  In addition, the VO issued notices to amend the rating list entries for 4 other properties where no appeal had been received. 

25. As far as the duration of the works was concerned, at the material day there were less than 11 months left until completion of the works, on or about 31 March 2009.  Mrs Franklin accepted that an allowance of 15% should be given from 1 June 2007 until 31 March 2009 or thereabouts.  This conclusion was based on what she described as the best evidence of the VT decisions, agreed allowances and withdrawn appeals.  It was also based on the lack of any direct rental evidence demonstrating that rents had been reduced to reflect the disruption and disturbance caused by the shopping centre development and associated street works.

26. Mrs Franklin added that, in her experience, where there was a scheme of works giving rise to a material change of circumstances, there could be a series of material changes in circumstances within that scheme.  In central area redevelopments it was likely that there would be a series of events, for example the closure of a car park, the demolition of buildings and street closures, each of which was likely to have its own material day.  Proposals could be made at the time of each of these material changes.  Where these changes were value significant, the intensity of the works was likely to ebb and flow as the works progressed.  In these circumstances, rather than making a series of alterations for each material date of the material change of circumstances, a robust judgment was made at the start of scheme as to the overall value effect for the duration of the works.  There had been such an ebb and flow in the intensity of disruption and disturbance experienced by the appeal property, and by comparable properties to which she had referred, as the shopping centre development and associated works progressed. 

27. Mrs Franklin considered that the evidence which must carry the greatest weight in this case was that provided by the assessments of comparable hereditaments in the locality, particularly those in and around Kings Road and St Andrews Street South.  She concluded that, considered at the material day, the severity of the disruption and disturbance caused by the work involved in the development of the new shopping centre and resulting street works, together with the duration of those works, was sufficient to affect the rent which would have been agreed between the hypothetical landlord and hypothetical tenant.  The hypothetical tenant would have made reasonable enquiries about the nature and likely duration of the works and would also have been aware of the future benefits arising from the enhancement schemes in Kings Road and St Andrews Street South and would have had regard to all these factors when making his rental bid.  Mrs Franklin considered that the 15% allowance adopted in her valuation sufficiently and fairly quantified the effect of the disruption and disturbance upon the rental value of the property at the material day.  She was therefore of the view that the correct RV at the material day was £48,500 with effect from 1 June 2007.

Conclusions

28. It is agreed that, at the material day, significant disturbance was suffered by the appeal property as a result of the roadworks.  A hypothetical tenant would have known that such disturbance would continue, to a greater or lesser extent, for nearly a year.  It is therefore not surprising that the parties agree that the property’s rental value on the statutory basis would have been reduced.  The issue is the quantum of that reduction.  Mrs Franklin thinks it should be 15% effective from 1 June 2007, when the roadworks associated with the Arc redevelopment first had a noticeable impact upon the use of the appeal property, until 31 March 2009, at or about when the redevelopment works came to an end.  Mr Denny agrees that any reduction should apply during this period, but he contends that it should be higher than 15% throughout the entire period, or alternatively it should be even higher during the period of maximum disruption, which he says was between 1 April and 31 October 2008.

29. In her written report Mrs Franklin placed some emphasis on the absence of any evidence of rent reductions having been agreed to reflect the disruption.  I do not attribute any significance to this factor because, as Mrs Franklin accepted in answer to a question from me, there was nothing to suggest that any of the leases of the affected properties allowed the tenants to seek such a reduction. 

30. Nor do I consider that any weight should be attached to the agreed RVs of the two properties upon which Mr Denny relied.  The assessment of The Avenue and Whatever nightclub in Devonshire House was reduced from the figure of RV £44,000, which appeared in the 2005 compiled list, to £35,000 with effect from 13 December 2007, when the property started trading under new ownership as “Déjà Vu”.  The original owners failed to provide full details of the rent they were paying, despite repeated requests from the VO.  On 7 July 2008 the VO received a proposal to reduce the assessment from the new owners, citing disruption caused by the roadworks and the development of the adjacent Cattle Market site.  This proposal was settled by agreement with the ratepayer effective from 17 March 2008, subsequently amended to 13 December 2007.  Mrs Franklin said that, following receipt of this proposal, the ratepayer provided receipts information which indicated that the original RV was excessive.  She said that the agreed RV of £35,000 reflected a number of factors including, but not limited to, the disruption caused by street works and the redevelopment.  The Licensing Act 2003 came into effect on 24 November 2005.  It enabled operators of public houses and bars to apply for licences permitting them to extend their opening hours.  During the course of discussions relating to this proposal it was noted that there were competing licensed properties within Bury St Edmunds with opening hours that were later than those at the Déjà Vu.  Moreover, there was a planning condition which prevented the Déjà Vu from operating after 2 am.  This had the effect of shifting the emphasis of the trade at Déjà Vu away from the club towards the bar.  Mrs Franklin said that all these factors would have been reflected in the receipts information provided and were taken into account when settling the first proposal at RV £35,000.

31. The ratepayers submitted a second proposal.  This related to the opening of a nightclub named “Ruin” on the opposite side of St Andrews Street South.  The RV of Déjà Vu was further reduced from £35,000 to £25,000 effective from 31 July 2008, being the date that Ruin opened.  Mrs Franklin said that this further reduction was solely attributable to the opening of the competing nightclub. 

32. Mr Denny’s second comparable was the offices of Bury Free Press, immediately to the west of Déjà Vu.  This is a 1980s office block, immediately adjoining the Arc development site which wraps round the northern and western aspects of the building.  It was originally entered in the rating list at RV £83,500 from 1 April 2005.  Part of the property, comprising prefabricated offices and car parking area, was sold and the single assessment was split into two separate assessments.  The Bury Free Press premises had an RV of £52,500 effective from 24 November 2006.  The assessment of the temporary offices was £31,000 effective from the same date.

33. The VO received two proposals on behalf of Bury Free Press on 6 July 2007.  The first cited disturbance caused by the development of the Arc.  The second cited disturbance caused by building works to the premises, in particular works to a party wall which had arisen as a result of the Arc development.  Mrs Franklin said that, following discussions between the VO and the ratepayer’s surveyor, it was agreed that the first proposal would be withdrawn and the rating list would be amended by notice to show an agreed RV of £47,250, which incorporated a 10% allowance effective from 27 November 2006.  This alteration was not a consequence of the street works in Kings Road.  It was made to reflect the considerable disturbance that arose from the Arc development itself, which was taking place immediately to the rear and side of the office building. 

34. The second proposal, citing disturbance caused by building works to the premises, was settled by agreement at RV £45,750, which incorporated a 12.5% allowance effective from 9 April 2007.  This increased allowance was agreed to reflect additional disturbance caused by building works to the Bury Free Press premises which commenced on 9 April 2007.  The need for these works arose from the demolition in February 2007 of the abutting prefabricated office buildings which had been owned and occupied by the Bury Free Press until 24 November 2006.  By the time the works had been completed, street works in Kings Road were in progress and the 12.5% allowance was left in place until those works were substantially complete in June 2008.  Disruption and disturbance from the development of the Arc site to the immediate side and rear of the Bury Free Press building continued during this period.

35. A further VO alteration was made to increase the RV to £47,250, incorporating a 10% allowance, with effect from 30 June 2008.  A final VO alteration was made to increase the RV to £53,000 with effect from 5 March 2009.  This reflected the completion of the Arc development, by removing the temporary allowance, and also the presence of three car parking spaces at the property.

36. I agree with Mrs Franklin that the agreed reductions in the assessments of these two comparables do not assist in the valuation of the appeal property, for these reasons.  Firstly, the rental values of office and nightclub premises are not affected by street works in the same way as retail properties.  Secondly, the agreed reductions either reflected other factors in addition to the effect of street works, or they did not reflect those works at all. 

37. Mr Denny also referred to the marketing history of two properties.  I do not obtain assistance from either of them.  There was no evidence to suggest that 1 Central Walk remained vacant as a consequence of the road works.  Moreover, since leases of retail premises frequently include a rent-free period, no reliable conclusion can be drawn as to the reason for such an allowance being included in the lease of Unit 4, Kings Road Mews.

38. Mrs Franklin based her valuation on VT decisions, agreed reductions in RV and withdrawn appeals.  She described them compendiously as “the best evidence”.  In my judgment VT decisions can certainly be of assistance in rating appeals if they have contributed to the establishment of an agreed tone of value.  It was not suggested that any such tone existed in relation to the effect of the road works associated with the development of the Arc.  Accordingly, I do not consider that the VT decisions on 2 Central Walk, dated 28 April 2008, which determined reductions at different dates of 10% and 15%, or the VT decision which forms the subject of this appeal, provide reliable evidence of value.

39. Mrs Franklin also relied on 15 withdrawn appeals.  However, none of these appeals related to retail premises fronting St Andrews Road South or King Street.  In any event, by agreeing that a reduction is appropriate in this case, Mrs Franklin has accepted that the circumstances are different from those of the withdrawn appeals, where it was agreed that no reduction was warranted.

40. The remaining evidence relied upon by Mrs Franklin consisted of five shops, in respect of which the following reductions were agreed:

Unit 5, Kings Road Mews, Kings Road	- 15% from 1 June 2007
51 St Andrews Street South	- 15% from 1 October 2006
Unit 1, 1A St Andrews Street South	- 10% from 27 November 2006
61-63 St Andrews Street South	- 15% from 27 November 2006
2 Central Walk	- 15% from 21 July 2008

41. Members of the Lands Tribunal have repeatedly stated that settlement evidence should be approach with caution.  This warning has particular relevance in the case of 51 St Andrews Street South and 2 Central Walk, where the ratepayers were not professionally represented.  Of the three remaining settlements, I consider that Unit 5, King Road Mews is the most helpful, because it is very much closer to the appeal property than Unit 1,1A or 61-63 St Andrews Street South.  Unit 5 is situated a short distance to the west of the appeal property, separated from it only by an access way to a rear car park and one other shop unit.  It was occupied as an estate agent’s office by Messrs Savills, who are also rating surveyors.  It was valued for rating purposes on the basis of retail values, with no addition for the A2 office use.  A reduction of 15% was agreed to reflect the roadworks.  I have no doubt that the appeal property was more badly affected by those works than Unit 5.  Both properties suffered disturbance whilst road works were being undertaken in Kings Road.  Unlike Unit 5, however, the appeal property continued to suffer when the works moved to St Andrews Street South, and again when the junction of the two roads was being dug up.  Moreover, there were occasions when the two doorways to the appeal property from Kings Road were out of use, in contrast to Unit 5, which was accessible from Kings Road at all times.

42. Mr Denny has no professional valuation experience and I have rejected most of the comparables upon which he relied.  Nevertheless, he was an impressive witness.  It is clear that his motive in pursuing this appeal was to secure what he considered to be an accurate assessment of the appellant’s premises, not simply to minimise his company’s rates liability.  In a letter to Mr Denny dated 10 July 2008, Mrs Franklin offered to reduce the assessment of the appeal property with effect from 27 November 2006.  Mr Denny replied in writing on 29 July 2008 and spoke to Mrs Franklin three days later.  On both occasions he pointed out that the value of his company’s property had not been affected by street works until 1 June 2007.  That information was manifestly truthful, as well as being contrary to the financial interest of Mr Denny’s company.

43. Mr Denny considered that the value of the appeal property had been affected very significantly throughout the period in question.  On the basis that the reduction in RV would take effect at a uniform level from 1 June 2007 until 31 March 2009, he quantified that reduction at 25%.  Having particular regard to the agreed assessment of Unit 5, Kings Road Mews, I am satisfied that such a reduction is not excessive.  The appeal is allowed.  I direct that the RV of the appeal property in the St Edmundsbury 2005 rating list be reduced to £42,750 with effect from 1 June 2007.  In the light of the wording of the appellant’s proposal in May 2008, I do not consider it appropriate to determine a later effective date.

44. In appeals conducted in accordance with the Tribunal’s simplified procedure, costs are only awarded in exceptional circumstances.  I am not aware of any such circumstances in the present appeal.  I therefore make no order as to costs.

Dated: 9 February 2010

N J Rose FRICS