United Kingdom Upper Tribunal (Lands Chamber)
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Cite as: [2015] UKUT 475 (LC)
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UPPER TRIBUNAL (LANDS CHAMBER)
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UT Neutral citation number: [2015] UKUT 0475 (LC)
UTLC Case Number: RA/81/2014
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
RATING - Procedure - 2005 rating list - transitional certificate as at 31 March 2010 - whether the Tribunal has jurisdiction to alter a certificate other than on the grounds of value- held that it does not - whether the valuation officer impugned the rating list - held that he did not - rateable value assessed at RV £41,000 - Non-Domestic Rating (Chargeable Amounts)(England) Regulations 2009
IN THE MATTER OF AN APPEAL FROM A DECISION OF
THE VALUATION TRIBUNAL FOR ENGLAND
BETWEEN:
THE DOG & GUN (OXENHOPE) LTD Appellant
AND
CATHERINE HOWARTH
(Valuation Officer) Respondent
Re: The Dog & Gun Inn,
Denholme Road,
Oxenhope,
Keighley,
West Yorkshire
BD22 9SN
Before: P D McCrea FRICS
Sitting at: Leeds Employment Tribunal
on
14 July 2015
Mr James Yarwood MRICS for the appellant
Mr Martin Spencer for the respondent
The following cases are referred to in this decision:
Shrewsbury Schools Governors v Shrewsbury Borough Council & Plumpton (VO) [1960] 7 RRC 313
Shearson Lehman Brothers Ltd v Humphrys (VO) and Hackney London Borough Council [1991] RA 125
DECISION
Introduction
1. This appeal has two elements. First, the circumstances in which a valuation officer can issue a certificate under regulation 15 (a “regulation 15 certificate”) of the Non-Domestic Rating (Chargeable Amounts)(England) Regulations 2009 (“the 2009 regulations”). Secondly, if the regulation 15 certificate in this case was appropriately issued, whether the rateable value certified by that certificate was correct.
2. The purpose of a regulation 15 certificate is to enable a valuation officer to correct the rateable value shown in a rating list on the ground that it is inaccurate. Such a certificate is required to be issued as soon as practicable after the circumstances calling for the certificate come to the valuation officer’s attention.
3. The appeal is by the ratepayer, The Dog and Gun (Oxenhope) Limited (“the appellant”), against a decision of the Valuation Tribunal for England (“the VTE”) dated 29 September 2014, in which the VTE upheld the contention of the valuation officer (“VO”) that the service of a regulation 15 certificate was appropriate, and that the VO had correctly certified a rateable value of £68,000 with effect from 31 March 2010 in respect of the Dog and Gun public house, Denholme Road, Oxenhope, Keighley, West Yorkshire, BD22 9SN (“the appeal property”).
4. The appeal was heard under the Tribunal’s simplified procedure. The appellant was represented by Mr Jim Yarwood MRICS of Fleurets, who gave expert valuation evidence. The valuation officer, Miss Catherine Howarth MRICS, also gave expert valuation evidence, and was represented by Mr Martin Spencer of the Valuation Office Agency (“VOA”).
5. On 15 July 2015 I inspected the appeal property accompanied by the parties. On 14 and 15 July 2015 I made unaccompanied external inspections of the comparable evidence.
6. On 5 October 2015 I received further written submissions from the parties as to the Tribunal’s jurisdiction to consider whether the regulation 15 certificate as required by the 2009 regulations was issued as soon as practicable after the circumstances calling for the certification came to the VO’s attention.
Facts
7. From the statement of agreed facts, the evidence, and my inspections I find the following facts.
8. The appeal property is situated in an elevated position in rural “Bronte country” with extensive views across the countryside. It is located on the junction of Trough Lane and Long Causeway, between the villages of Oxenhope and Denholme, West Yorkshire. It is located approximately 1.5 miles from the A629 which links Halifax with Keighley. Several tourist attractions are in the vicinity, including Howarth village and the Keighley and Worth Valley steam railway.
9. The property comprises a two-storey public house, originally built some 300 years ago as a coaching inn. It is detached and built in stone under a stone roof. There are two customer car parks, one directly opposite the building with 22 car parking spaces and an additional car park located on Trough Lane with a further 17 marked spaces. A small hotel/timeshare facility in separate ownership adjoins the appeal property to the east.
10. The appeal property operates as a country inn/restaurant offering an a la carte menu together with daily “specials” and bar snacks. In 2007 the building was extended on ground and first floors, to include an additional ground floor restaurant area and an extended and re-fitted catering kitchen. The customer toilets were moved to the first floor, leaving a disabled wc on the ground floor. After this work was completed, there were dining areas to the left and right of the main entrance lobby/porch and a centrally located lounge bar with bar servery. Prior to the extension, the restaurant area had 34 covers plus a further 18 covers in the lounge/bar area. Following the extension, the total covers increased to approximately 78. The work was completed on 1 August 2007, which is both the material day and the effective date for the purposes of this appeal. The antecedent valuation date is 1 April 2003.
11. The compiled 2005 rating list entry with effect from 1 April 2005 was £9,650 RV. Following the extension and alterations, the assessment was increased to £10,750 RV with effect from 1 August 2007 by a valuation officer’s notice dated 17 January 2008.
12. One of the directors of the appellant company, Mrs Roper, has traded from the appeal property for over 20 years either with her husband, or since October 2008 as a director of the company.
13. The VOA sent Forms of Return, requesting trading information, to Mr and Mrs Roper, in August 1995, September 1998, May 2002, July 2003 and May 2008, none of which was returned. Eventually, a Form of Return issued in December 2010 was completed and returned to the VOA in January 2011.
14. Having received trading information after a wait of over 15 years the VOA did not act with notable speed but in April 2013, two years and three months after receiving the Form of Return, increased the 2010 rateable value to £77,000 with an effective date of 9 April 2013. At the same time a certificate under regulation 14 of the 2009 regulations (a “regulation 14 certificate”) was issued at £77,000 with effect from 1 April 2010. The valuation officer, being of the opinion that the local rating list was incorrect at 31 March 2010 and that the 2005 list entry was incapable of being altered, also issued a regulation 15 certificate at £77,000 with effect from 31 March 2010. The effect of these three actions, as far as the ratepayer was concerned, was to cause a significant increase in rate liability, backdated for three years, and crucially any protection that transitional phasing would ordinarily have conferred on the ratepayer was considerably reduced as the regulation 15 certificate had the effect of increasing the rating assessment in the 2005 list.
15. Following a proposal to alter the 2010 rating list submitted by Westlake & Company, the appellant’s representative at the time, the rateable value was reduced by agreement to £68,000 with effect from 9 April 2013. Following this agreement revised certificates under regulation 14 and regulation 15, both at £68,000 RV with effect from 1 April 2010 and 31 March 2010 respectively were issued. On 1 May 2014 an appeal against the regulation 15 certificate was submitted by Fleurets Ltd which by then was acting for the ratepayer.
The VTE’s Decision
16. In its decision dated 29 September 2014, the VTE dismissed the ratepayer’s appeal. The panel made a finding of fact that the property’s rating list entry, as it had appeared in the rating list on 31 March 2010, was artificially low. The entry was clearly incorrect, having regard to the entry that was agreed with the ratepayer’s representative for the purposes of the 2010 rating list.
17. The panel found that whilst the VO cannot normally impugn assessments in his own area, whether made by himself or a predecessor, this was not an absolute rule. In this case the VO had not had reason to believe that the 2005 rating list entry was wrong, until investigations were made into the accuracy of the 2010 rating list entry. Warming to its theme, the panel went on to say, “it would be a ridiculous state of affairs, if evidence of a substantial nature came to light at a later date, which clearly proved that an entry appearing in the list was wrong and the Valuation Officer was not able to state the obvious. Whilst a Rating List was in force, the tribunal agreed that it would be erroneous for the Valuation Officer to impugn an entry, if he had the power to do something about it. In the present case, the list was closed, so the Valuation Officer was unable to alter the list entry.”
18. The panel found that the requirement in regulation 17(1) that a regulation 15 certificate should be issued “as soon as practicable after the circumstances calling for the certification come to the AVO’s attention (whether by virtue of an application by the billing authority, the Secretary of State, the ratepayer concerned, or otherwise)” permitted the issue of a certificate in this case. The tribunal determined that it was the ratepayer’s failure to supply the Valuation Officer with the relevant accounts, which had prevented the latter from determining an accurate rateable value assessment at an earlier stage, having regard to the appeal property’s fair maintainable trade which was the root cause for the delay in issuing the certificate under appeal.
The issues
19. There are two issues in this appeal. The first is whether the regulation 15 certificate was required and whether the valuation officer has a legal duty to issue one, as Miss Howarth maintains, or whether the valuation officer has misdirected himself in serving the certificate, as Mr Yarwood submits. Secondly, if the service of the certificate was appropriate, the rateable value that ought to have been certified. Both parties agree that the rateable value of £68,000 was excessive. Miss Howarth says that the correct assessment should be £41,000 RV. Mr Yarwood says that the correct figure should be £10,750 RV.
Statutory Framework
20. In respect of the issuing of a regulation 15 certificate, the Non-domestic Rating (Chargeable Amounts) (England) Regulations 2009 (“the 2009 Regulations”) provide as follows:
Certificates for change in rateable value: 31 March 2010
15.-(1) This regulation applies where the appropriate valuation officer is of the view (whether following a request from the ratepayer in relation to the hereditament in question or not) that the rateable value shown in a local or the central list in relation to a hereditament for 31st March 2010 is inaccurate.
(2) Where this regulation applies, the appropriate valuation officer shall certify-
(a) that this regulation applies; and
(b) the rateable value that should have been shown in a local or the central list for the hereditament for 31st March 2010.
(3) Where the appropriate valuation officer has certified a rateable value in accordance with paragraph (2), the provisions of these Regulations shall have effect, as regards the days referred to in paragraph (4), (5)(a) or (5)(b), as the case may be, as if that rateable value had been the value shown in a local or the central list for 31st March 2010.
(4) Where the rateable value certified in accordance with paragraph (2) is lower that that shown in a local or the central list for 31st March 2010, the days are 1st April 2010 and any subsequent relevant day.
(5) Where the rateable value certified in accordance with paragraph (2) is greater than that shown in a local or the central list for 31st March 2010 and-
(a) a certificate under regulation 14 has been issued, the days are those referred to in paragraph (4), (5)(a) or (5)(b) of that regulation, as the case may be;
(b) no certificate under regulation 14 has been issued, the days are that on which the certificate under paragraph (2) of this regulation is issued and any subsequent day.
…..
Certificates: general
17.-(1) The appropriate valuation officer (“the AVO”) shall certify the values which fall to be certified by the AVO under these Regulations as soon as practicable after the circumstances calling for the certification come to the AVO’s attention (whether by virtue of an application by the billing authority, the Secretary of State, the ratepayer concerned, or otherwise).
(2) Where, whether by reason of a decision of the Valuation Tribunal for England or otherwise, the AVO forms the opinion that a certificate under these Regulations (other than such a certificate which has been confirmed on appeal) is inaccurate, the AVO shall certify the value which in the AVO’s opinion should be substituted for that originally certified.
…..
Appeals against certificates
18.-(1) Where an interested person in relation to a hereditament in respect of which a value is certified by an appropriate valuation officer under these Regulations is dissatisfied with the value so certified, the interested person may appeal against the certificate in accordance with this regulation.
(2) An appeal under paragraph (1) shall be initiated by serving a notice on the valuation officer stating the appellant’s reasons for being dissatisfied.
(3) Unless-
(a) the notice is withdrawn, or
(b) the appropriate valuation officer and the appellant agree in writing as to the value which should be certified, the disagreement shall be referred by that officer to the Valuation Tribunal for England as an appeal against that certification.
…..
21. In respect of the rateable value to be certified, section 56 of the Local Government Finance Act 1988 gives effect to Schedule 6 to that Act, which sets out the statutory basis on which the rateable value of a non-domestic hereditament is determined. The statutory valuation assumptions are set out in Schedule 6, as follows:
“2(1) 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 an 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 the assumption any repairs which a reasonable landlord would consider uneconomic;
(c) the third assumption is that the tenant undertakes to pay all usual tenant’s 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.
….
(6) Where the rateable value is determined with a view to making an alteration to a list which has been compiled (whether or not it is still in force) the matters mentioned in sub-paragraph (7) below shall be taken to be as they are assumed to be on the material day.
….
(7) The matters are-
(a) matters affecting the physical state or physical enjoyment of the hereditament,
(b) the mode or category of occupation of the hereditament,
….
(d) matters affecting the physical state of the locality in which the hereditament is situated or which, though not affecting the physical state of the locality, are nonetheless physically manifest there, and
(e) the use or occupation of other premises situated in the locality of the hereditament.”
The Regulation 15 Certificate
Case for the appellant
22. Mr Yarwood submitted that any action taken by the VO in serving the regulation 15 certificate must be informed by regulation 17 of the 2009 regulations. Certification was only required in those instances where the VO was unable to alter the relevant valuation list and in those cases the VO was obliged to certify the rateable value as soon as practicable after the circumstances calling for the certification came to his attention.
23. A material change of circumstances (“MCC”) occurred at the appeal property on 1 August 2007 when the extension was completed. The VO was aware of the MCC and by way of a notice dated 17 January 2008 altered the rateable value of the appeal property from £9,650 to £10,750 with effect from 1 August 2007.
24. Mr Yarwood said that no subsequent circumstances at the appeal property had been identified under regulation 17 that would trigger action under regulation 15 and as a consequence no certificate under regulation 15 was required or permitted.
25. It was implicit, he said, that the circumstances calling for the certification referred to in regulation 17 were physical, attaching to the hereditament, and previously unknown to the VO. Mr Yarwood contended that the VO had not distinguished between the physical circumstances and the evidence available as to the effect on value of these circumstances in making a decision to certify. His view was that the VO had in effect employed regulation 15 as a means to express a second opinion as to the rateable value of the appeal property. Accordingly, the VO had impugned the assessment in the 2005 rating list contrary to the principle laid down in Shrewsbury Schools Governors v Shrewsbury Borough Council & Plumpton (VO) [1960] 7 RRC 313 and Shearson Lehman Bros Ltd v Humphrys (VO) and Hackney London Borough Council [1991] RA 125.
26. Mr Yarwood said that the ratepayer should expect certainty from the valuation office agency. The VO had, in making the alteration to the rating list in January 2008, presumably been acting as a competent valuer having regard to the nature of the property and valued in accordance with the 2005 approved guide issued by the VOA.
27. He did not consider that the information provided in the January 2011 Form of Return was relevant. It contained trading information for the year ending 2010 which significantly post-dated both the material day and the antecedent valuation date. In addition, the period of time during which the appellant and previously Mr and Mrs Roper had failed to return previous Forms of Return covered the 1995 and 2000 rating lists yet this had not prevented the VO from assessing rateable values in those lists. This was at odds, he said, with the VO’s current view that it had been unable to accurately assess the rateable value of the appeal hereditament until a Form of Return had been submitted to it.
28. In any event, even if the information contained within the Form of Return had been relevant, the VO was under an obligation under regulation 17 to issue a certificate “as soon as practicable”. On any reasonable view, he said, a period of two years and four months to issue the certificate was not as soon as practicable.
29. Mr Yarwood said that one of the comparable properties, the “Ring of Bells” at Thornton, had been the subject of a material change of circumstances alteration in the list in 2009, specifically as a result of the extension to the appeal property. The rateable value of the “Ring of Bells” had been reduced from £53,500 to £47,200 with effect from 1 August 2008 - the material day in this appeal. Accordingly the VO’s assertion that investigations into the correct assessment of the appeal property were not possible until the Form of Return had been provided was wrong.
30. In his subsequent written submissions, Mr Yarwood submitted that the regulations were framed sufficiently widely to permit any errors to be corrected. He said that the first part of regulation 17(2) referred to the certificate itself and whether or not it was inaccurate. Inaccurate, he said, meant mistaken, faulty, defective or unsound. He believed those definitions would cover the situation of whether the certificate has been issued “as soon as practicable”. The second part of regulation 17(2) then dealt with the valuation officer certifying a value which should be substituted for that in an inaccurate certificate. The second part therefore related to value. “Substituted for” meant “to take the place of” or “be in place of”.
31. In his opinion, where the certificate has not been issued “as soon as practicable” then the relevant value would be the value that existed before the original certificate was issued. That would be the rateable value that appeared in the 2005 rating list on 31 March 2010. The relevant certificate would then be issued under regulation 15, or by an order of the Tribunal to that effect. In that way the ratepayer was treated in an equitable manner and any actions or decisions of the valuation officer that were unreasonable or unjust and that prejudiced the ratepayer could be reversed.
Case for the respondent
32. For the VO, Miss Howarth emphasised that regulation 17 required that the appropriate valuation officer “shall certify the values which fall to be certified by the AVO under these Regulations as soon as practicable after the circumstances calling for the certification come to the AVO’s attention.” The regulation does not say that the VO may serve a certificate - if the VO comes to the conclusion that the assessment is inaccurate, he or she is obliged to serve a certificate.
33. At the time that the assessment of the appeal property was increased with effect from 1 August 2007, to reflect the alterations, no inspection had been carried out and no trade information was available. In Miss Howarth’s view, the VO did not have reason to believe that that 2005 rating list entry was wrong until investigations were made into the accuracy of the 2010 list entry. It was only following the receipt of a completed Form of Return that the impact of the alterations came to light. Discussions with Westlake and Company in respect of the 2010 list confirmed that the trade had increased significantly.
34. She contended that the “circumstances” envisaged by regulation 17 were the failure of the appellant to supply the previously requested trade details, preventing the 2005 list entry to accurately be determined. The circumstances envisaged by the regulation (“whether by virtue of an application by the billing authority, the Secretary of State, the ratepayer concerned, or otherwise”) were wide enough to encompass the facts in this case.
35. Miss Howarth accepted that in an ideal world, the reassessment of the Ring of Bells under the MCC appeal owing to the extension to the appeal property would have encompassed a review of whether the assessment of the appeal property was correct. She admitted that this did not happen, which was an oversight on the part of the VO. She did not go so far as to agree with Mr Yarwood’s proposal that the VO had looked at the assessment of the appeal property and considered it to be correct, as there were no file notes to indicate what was in the mind of the particular VO at that time.
36. Miss Howarth said that whilst issuing a certificate did not sit comfortably with her owing to the effect it would have on the ratepayer’s rate liability, had the ratepayer returned the Form of Returns at an earlier date, the VO could have accurately assessed the rateable value of appeal property.
37. In answer to a question from me, Miss Howarth could not state categorically why it took the VOA over two years to issue the certificate. She thought it might be as a result of other appeals being made. She said that Forms of Return are sometimes entered into the VOA system, and were then “buried and not seen again until perhaps an appeal is made on the specific property or comparable properties”. She accepted that the effect on the ratepayer of the delay had been significant.
38. For the VO, Mr Spencer made written submissions as regards the Tribunal’s jurisdiction. He stressed that regulation 18 provided that the appeal of an interested person was in respect of “the value so certified”. He said that no appeal could arise in terms other than those relating to value, and no appeal could be made in respect of the mere fact of certification. Further, in an appeal from a decision of the VTE, the Upper Tribunal could “confirm, vary, set aside, revoke or remit” a decision or order of the VTE. Since the jurisdiction of the VTE was confined to that of the “value so certified”, rather than the circumstances or timing of the certification, this Tribunal was equally restricted.
39. Mr Spencer said that the requirement to certify as soon as practicable under regulation 17(1) of the regulations was aimed at reducing the administrative burden on billing authorities of calculating and re-calculating bills, and avoiding retrospective liability charges (which could be increases or reductions) but by definition this was not a strict time limit. It seemed to him that it would be unlikely that the ratepayer would be advancing the argument that the certificate should be quashed on the basis he believed the valuation officer was late in issuing the certificate in the circumstances where the transitional certificate had reduced the ratepayer’s liability.
40. Mr Spencer said that it was unfortunate that there was a delay in issuing the certificate but asserted that this did not affect the strict requirement for the VO to comply with regulation 17(1).
Conclusions
41. First, I consider whether the VO has, in issuing the regulation 15 certificate, impermissibly impugned the rating list, as Mr Yarwood suggested.
42. In Shrewsbury School Governors, the allegation of impugning the list resulted from the appellant governors calling as a witness two chartered surveyors who previously had acted as contract valuers for the Inland Revenue for rating purposes, prior to the valuation officer assuming the role under the Local Government Act 1948. The surveyors were called to give evidence in respect of the methodology they had adopted in valuing comparable schools, and which differed from that which the respondent valuation officer was then advancing. The Lands Tribunal (Erskine Simes QC and H P Hobbs) held that since the contract valuers were, when in that role, acting as agents for the Revenue, the decisions arrived at by them could not be challenged by the valuation officer since to do so would be to impugn assessments in his own valuation list - which he was not at liberty to do. The thrust of that part of the decision was that, in effect, contract valuers and the valuation officer should be seen as one and the same, both acting as agents for the Revenue but during different periods.
43. In Shearson Lehman Bros Ltd, the Lands Tribunal (HHJ Marder QC and C R Mallett FRICS) held that:
“We do not think there is an absolute rule which is to be expressed in the form that “a valuation officer may not impugn an entry in his own list”. In our view the rule amounts to no more than this, that where a value appears in the list, either as a result of an unchallenged proposal by the valuation officer, or in consequence of an agreement between a valuation officer and ratepayer, then the valuation officer should not normally be heard to say that the assessment was incorrect at the time it was made. The proposal or agreement will be evidence against the valuation officer as to the correctness of the assessment.”
44. In fact, in that case, the Tribunal held that the valuation officer was not caught by the principle since he had made it clear that he intended to revisit the assessment at a later date.
45. In my judgement, Mr Yarwood was wrong to contend that the valuation officer is impugning the list. The valuation officer was simply invoking a regulation under a statutory instrument. The purpose of the 2009 regulations revolves around ratepayers’ liability, and transitional phasing certificates. Whilst regulation 15 does not provide for an assessment in a previous rating list to be altered, it does provide for the valuation officer to serve a certificate indicating what that assessment would have been had he been able to alter it, in order that the ratepayer’s base liability going into the new list is correct. The effect of this is that a ratepayer’s liability in the new list should be no different than if the valuation officer altered the assessment in the old list by notice during the lifetime of that list.
46. That is quite different, in my view, to a valuation officer simply saying that an assessment in the list is incorrect since he no longer agrees with it - which would be impugning the list in the way that the Lands Tribunal envisaged.
47. Secondly, whilst I accept that whilst the ratepayer is entitled to expect the valuation officer to place accurate valuations on hereditaments, I do find some similarity between the subject case and that in Shearson Lehman Bros Ltd in that the valuation officer had consistently been asking for trading information from the ratepayer, and by implication if not stated, was going to have another look at the assessment when trading information was forthcoming.
48. I am therefore satisfied that the valuation officer did not impermissibly impugn the list by issuing the regulation 15 certificate. I now turn to whether I have jurisdiction to order that the certificate should be withdrawn or replaced if it was not issued “as soon as practicable” as directed by regulation 17.
49. It is worth at this point revisiting the regulations. Regulation 15 applies “where the appropriate valuation officer is of the view….that the rateable value shown….in relation to a hereditament for 31st March 2010 is inaccurate”. In this case the valuation officer was of such a view, and so regulation 15(2) bites. This requires that “the appropriate valuation officer shall certify- (a) that this regulation applies; and (b) the rateable value that should have been shown….for 31st March 2010”. The valuation officer duly did this. There is no doubt in my mind that the valuation officer was obliged (“shall”) to certify in such circumstances.
50. Miss Howard did not take issue with Mr Yarwood’s contention that any action taken under regulation 15 must comply with regulation 17. This must be right, as the regulation is in respect of “Certificates: general”.
51. The key to this aspect of the appeal is regulation 17(1):
“The appropriate valuation officer (“the AVO”) shall certify the values which fall to be certified by the AVO under these Regulations as soon as practicable after the circumstances calling for the certification come to the AVO’s attention (whether by virtue of an application by the billing authority, the Secretary of State, the ratepayer concerned, or otherwise).”
(my emphasis)
52. Did the VO issue the certificate “as soon as practicable” as directed by the 2009 regulations? Miss Howarth said that the “circumstances” giving rise to VO’s view that the rateable value was incorrect and consequent obligation to issue a regulation 15 certificate was the Form of Return arriving at the VOA on 17 January 2011. She did not have a satisfactory answer as to why it took the VO until 9 April 2013 to issue the regulation 15 certificate. I make no personal criticism of her for that - she was hampered by a lack of record keeping at the VOA and being relatively fresh to the scene. I am satisfied that the ratepayer can assume that the Form of Return came to the VO’s attention when Mrs Roper submitted it to the VOA.
53. The VOA rating manual says that (albeit in circumstances when the VOA has received a request for a certificate as opposed to issuing one of its own volition) [1]
“No time limit is prescribed for issuing certificates but the Regulations state that VOs "shall certify the values ...... as soon as practicable after the circumstances calling for the certification come to his attention". VOs should, therefore, give priority to this type of work and, wherever possible, issue a certificate within six weeks of receiving an application.”
54. It may be that the timescale within which the VO should issue a certificate, if doing so of his or her own volition rather than in responding to a request for a certificate, could be more than six weeks. However that cannot, on any reasonable view, extend to a period of over two years after the VO became aware of the circumstances giving rise to the view that the assessment was incorrect.
55. In my view the VO did not issue the certificate as soon as practicable after the circumstances calling for the certification came to his attention. This caused undue hardship on the ratepayer, which backdated a significant rate liability.
56. However, having considered the parties’ further submissions I find that I do not have jurisdiction to alter or order the withdrawal of the certificate on the grounds that it was not issued as soon as practicable after the circumstances calling for the certification came to the VO’s attention. The Regulations are clear that the appeal is against the “value so certified”, and I find that it is only against the value itself that an appeal can be successful. I therefore now turn to the valuation issue.
The Rateable Value
57. Both parties considered that the rateable value of £68,000 upheld by the VTE was wrong. For the appellant, Mr Yarwood said that the originally certified rateable value of £10,750 remained correct. Miss Howarth, following the receipt of further and better particulars, contended that the rateable value should be £41,000.
58. Helpfully, there was a degree of common ground. Both valuers adopted the VOA’s “Valuation of Public Houses: Approved Guide” (“the approved guide”) in respect of the 2005 rating list, and both applied percentages to the notional fair maintainable trade/receipts on a “wet” and “dry” basis in accordance with the approved guide.
Case for the appellant
59. Mr Yarwood’s valuation and written evidence was relatively brief. His valuation was:
Fair maintainable trade (wet): £120,000 @ 6.75%: £8,100
Fair maintainable trade (dry): £55,000 @ 5.13%: £2,822
£10,922
(say) £10,750 RV
60. Mr Yarwood said that at the material day the hypothetical tenant would have no historic trading information, and in making his rental bid would have regard to the assessment of comparable properties in the area. He relied upon the following comparable assessments of public houses in the locality of the appeal property:
|
Public House |
Address |
Initial RV |
Final RV |
Effective Date |
Agreed or withdrawn |
|
Lamb Inn |
Oxenhope BD22 9NU |
£6,150 |
|
1/4/05 |
Withdrawn |
|
Waggon & Horses |
Oxenhope BD22 9QE |
£8,600 |
|
1/4/05 |
Withdrawn |
|
Bay Horse Inn |
Oxenhope BD22 9LN |
£12,525 |
|
1/4/05 |
Not appealed |
|
George Hotel |
Cullingworth BD13 5HN |
£11,250 |
£8,600 |
1/7/07 |
Agreed |
Case for the respondent
61. In her expert report, Miss Howarth went into rather more detail than Mr Yarwood. She noted that the following trade information had been provided by the appellant:
|
Year End |
Liquor |
Food |
Total |
|
5 April 2005 |
£187,576 |
£84,528 |
£272,104 |
|
5 April 2006 |
|
|
£300,450 (no split provided) |
62. She accepted that this trade information was post AVD but prior to the date of alteration of the appeal property. The following trade data had been provided for the years following the alteration:
|
Year End |
Liquor |
Food |
Total |
|
5 July 2008 (annualised from 13 weeks) |
£323,440 |
£379,644 |
£703,084 |
|
31 Jan 2009 (annualised from 15 weeks) |
£304,086 |
£427,169 |
£731,255
|
|
17 October 2009 |
287,784 |
£402,202 |
£689,986 |
63. Miss Howarth said that the trade figures provided guidance as to the possible level of turnover but that they couldn’t be relied upon in isolation as the years of trade were between two and six years after the AVD.
64. Accordingly, to estimate fair maintainable trade Miss Howarth also had regard to comparable evidence. She rejected the comparables put forward by Mr Yarwood, as she considered that they were more in the nature of traditional wet-trade led drinking establishments with a limited range of food, as demonstrated by the adopted fair maintainable receipts in each case - determined following the disclosure of trade or accepted in those instances where rateable values had been discussed during the appeal process.
65. Miss Howarth said that the appeal property was a country pub in rural surroundings, close to popular tourist destinations and offering good food. She considered the following properties to be broadly comparable, with similar physical features, characteristics, and which operated in a similar manner to the appeal property following alterations:
|
Public House |
Address |
RV |
Comments |
|
Beehive |
Hob Lane Ripponden HX6 4LU |
£34,000 |
In a semi-elevated position with views over adjoining countryside. Open plan layout. Can cater for 48 diners. Car Park. Appeal against RV withdrawn following full trade disclosure. RV based upon liquor FMT £220,000 and dry £190,000
|
|
White Horse Inn |
Wells Heads Thornton BD13 3QL |
£36,500 |
3 miles from appeal property in semi-rural setting close to village. Opened up internally to cater for 60 diners. Large car park. Appeal against RV withdrawn. RV based upon liquor FMT of £150,000 and dry £280,000
|
|
Grouse Inn |
Harehills Lane Oldfield BD22 0RX
|
£41,000 |
Similarly remote setting to appeal property and close to it. Internally opened up to cater for 40 diners plus 80 in restaurant. Similar “offer” to appeal property. Car park. Appeal against RV withdrawn. RV based upon liquor FMR of £208,000 and dry £272,000
|
|
Ring of Bells |
Hill Top Road Thornton BD13 3QL |
£47,200 |
3.5 miles from appeal property, in elevated position overlooking countryside. Similar “offer” to the appeal property. Can cater for up to 80 diners. Car park. RV agreed as MCC reduction following extension to the appeal property. RV based upon liquor FMR of £142,800 and dry £367,200
|
|
Top Brink |
Lumbrutts Todmorden OL14 6JB |
£67,500 |
Rural setting close to local tourist destinations and footpaths. Can cater for up to 200 diners in various rooms. Large car park. Appeal against RV withdrawn. RV based upon liquor FMR £266,000 and dry £440,000
|
|
Dick Hudsons |
Otley Road Bingley BD16 3BH |
£87,500 |
Remote setting on edge of moor. Extended in 2002. Open plan space can accommodate 100 diners. Large car park. Appeal agreed by negotiation, based upon liquor FMR of £287,500 and dry £575,500
|
66. In the main, Miss Howarth considered her comparables to be “destination venues”, where there would be little custom from the immediate locality. With the exception of the Beehive Inn, the main trade was in food. The “offer” at each comparable was similar to that at the appeal property, in terms of locally sourced food and an a la carte menu.
67. Of the comparables, Miss Howarth considered that the appeal property would trade broadly in line with the Grouse Inn - whose larger restaurant was seldom used. She thought that it would trade at a lower level than the Ring of Bells (where there was a greater emphasis on food), Top Brink (which could trade on a larger scale at one sitting) and Dick Hudsons (again significantly larger and more attractive), but that it was superior to the White Horse (in a slightly inferior setting) and the Beehive Inn (where there was more competition from nearby Ripponden).
68. Having reviewed the level of trade achieved on the comparable properties, and the level of fair maintainable receipts where trade had not been provided on public houses which operate in a similar manner to the appeal property, Miss Howard’s estimate of fair maintainable receipts for the appeal property at the AVD, but reflecting the physical state of the appeal property and the locality at the material day, was liquor sales of £180,000 and food sales of £300,000.
69. With reference to the approved guide, Miss Howarth applied percentages from the the mid-point of band 2 for wet trade, and the mid-point of band B for food (neither of which Mr Yarwood disputed). On this basis her valuation was:
Fair maintainable trade (wet): £180,000 @ 8.25%: £14,850
Fair maintainable trade (dry): £300,000 @ 8.63%: £25,890
£40,740
(say) £41,000 RV
70. Since the improvements to the appeal property were not completed until August 2007, trade receipts at the AVD of the property in this improved state were not available. However Miss Howarth considered that the effect on the actual trade of the improvements showed that it was right to make an adjustment to the fair maintainable receipts at AVD.
71. Miss Howarth considered that her assessment of rateable value sat appropriately in the hierarchy of rateable values of her comparable properties:
|
Address |
Rateable Value |
|
Dick Hudsons |
£87,500 |
|
Top Brink |
£67,500 |
|
Ring of Bells |
£47,200 |
|
Grouse Inn |
£41,000 |
|
Dog and Gun |
£41,000 |
|
White Horse Inn |
£36,500 |
|
Beehive |
£34,000 |
Conclusions
72. Having inspected the appeal property internally and externally, and the comparable evidence externally, I prefer Miss Howarth’s valuation to Mr Yarwood’s. With the exception of “Top Brink” and “The Beehive”, which in my judgement were too far away from the appeal property to properly be comparable, I found Miss Howarth’s comparables to be appropriate. Mr Yarwood’s properties were not, in my view, truly comparable. I accept Miss Howarth’s criticism of them as being, in effect, drinking establishments rather than destination food pubs. There was also little analysis of them, more of a broad brush comparison of the rateable values.
73. I consider Miss Howarth’s estimated wet and dry trade to be credible, and find that her valuation in line with the approved guide to be correct.
Disposal
74. The Valuation Officer is directed to substitute the regulation 15 certificate which certified a value of £77,000 RV, subsequently revised to £68,000 RV, with a certificate certifying a value of £41,000 RV with effect from 31 March 2010, under regulation 17(2) of the 2009 regulations.
75. I cannot conclude this decision without expressing unease as to the inequitable consequences for the ratepayer of the Tribunal’s lack of jurisdiction to order the withdrawal of the certificate on the ground that it was patently not issued as soon as practicable after the VO became aware of the circumstances calling for the certification. Had I had the power to do so, I would have had little hesitation in ordering the certificate’s withdrawal, served as it was over two years after the Form of Return, albeit finally, was submitted. The effect on the ratepayer’s rate liability will be considerable, and in my view unjust.
76. The appeal was heard under the Lands Chamber’s simplified procedure, under which costs are only awarded in exceptional circumstances. Neither party indicated there were any such circumstances, and I therefore make no order for costs.
19 October 2015
 |
P D McCrea FRICS
[1] http://manuals.voa.gov.uk/corporate/Publications/Manuals/RatingManual/RatingManualVolume3/sect18/b-rat-man-vol3-s18.html#P132_4778