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Southlong East Midlands LTD v Customs And Excise [2005] UKVAT V18943 (18 February 2005)

18943

ZERO RATING - First grant of major interest of building - Listed building - Substantial reconstruction - Building in poor state, long unoccupied Works carried out - Demolition of one part; small extension; internal reorganisation of rooms - Whether "substantial reconstruction" - No VATA 1994, Sch 8, Group 6, Item 1, Note (4)

LONDON TRIBUNAL CENTRE

SOUTHLONG EAST MIDLANDS LTD

Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE

Respondents

Tribunal: ANGUS NICOL (Chairman)

SHEILA WONG CHONG, FRICS

Sittng in public in London on 15 September 2004

Richard Barlow, counsel, instructed by Bishop Fleming, chartered accountants, for the Appellant

Caroline Neenan, counsel, instructed by the Solicitor for the Customs and Excise, for ~espondents

© CROWN COPYRIGHT 2004

DECISION

The Appellant is a building contractor. In 1999 it purchased Abbotsbury Court, in Seagrave, Leicestershire, which is a listed building, and obtained planning and listed building consent for the carrying out of certain works. On completion of the works, the Appellant sold Abbotsbury Court, in May 2002, and contended that the sale was a zero-rated supply. The Commissioners decided that the supply was exempt. The issue in the appeal was whether the works carried out were a "substantial reconstruction" of Abbotsbury Court, within Item 1 of Group 6 of Schedule 8 to the Value Added Tax Act 1994, as the Appellant contended, or whether they amounted to alteration and refurbishment for the purpose of modernisation of the building, as the Commissioners argued.

The legislation

The legislative provisions relating to zero rating are all contained in Group 6 of Schedule 8 to the 1994 Act, and, so far as are relevant to this appeal, are as follows:

"Item No

1. The first grant made by a person substantially reconstructing a protected building, of a major interest in, or in any part of, the building or its site.

...

NOTES

...

(4) For the purposes of Item 1, a protected building shall not be regarded as substantially reconstructed unless the reconstruction is such that at least one of the following conditions is fulfilled when the reconstruction is completed-

(a) that, of the works carried out to effect the reconstruction, at least three fifths, measured by reference to cost, are of such a nature that the supply of services (other than excluded services), materials and other items to carry out the works, would, if supplied by a taxable person, be within either Item 2 or Item 3 of this Group; and

(b) that the reconstructed building incorporates no more of the original building (that is to say, the building as it was before the reconstruction began) than the external walls, together with other external features of architectural or historic interest;

and in paragraph (a) above 'excluded services' means the services of an architect, surveyor or other person acting as consultant or in a supervisory capacity."

It was not in dispute that Abbotsbury Court was a "protected building" for the purposes of Group 6, as defined in Note (1), nor that a major interest in the building had been granted by the person who had carried out the works to the building. It was not accepted by the Commissioners that there had been any reconstruction of the building.

The facts

Most of the facts were not in dispute, but there was a difference of view as to precisely what works had been carried out at Abbotsbury Court. We heard evidence from Mrs Carol Hardy, a director of the Appellant, who also produced plans of the building and of the proposed (as they were then) works.

Abbotsbury Court consisted of an original house, built apparently in 1607, on to which further buildings had been added; it appeared possible that at some time outbuildings had been roughly converted and taken into later extensions which were added. For ease of reference, we attach copies of parts of the plans as an appendix to this decision. These are the drawings numbered 99.1221.02, 99.1221.03, and 99.1221.07 A, to which we will refer for brevity as drawings 02, 03 and 07 A.

Mrs Hardy said that the house, as it was when the Appellant purchased it, consisted of parts built at various different times. At the date of purchase, the house had been unoccupied for a considerable time; the exact amount of time was not certain, but the evidence suggested that it was between 18 months and five years. The owner had been aged and infirm and had moved into residential care, and the house had been left, empty and untended, until his personal representatives sold it after his death. The Appellant company had been formed for the purpose of purchasing this property, and bought it in August 1999 for £205,000. That was a low price, the reason being the poor condition of the house. The Appellant spent some £150,000 on the building, and sold it for £495,000.

The property

The layout of the property at the time when the Appellant bought it was shewn in plan 02. Mrs Hardy described the property in some detail as it had been at that time, dealing with the various parts of the building, and outlined what was done to it. Her evidence was supplemented by a set of photographs shewing the state of some parts of the building, taken during the carrying out of the work. While these give a very good impression of the lamentable state into which the building had fallen, they do not give great assistance in answering the questions that we have to address, namely whether the house was reconstructed, and if so whether it was substantially reconstructed.

The brewhouse. This was possibly a later addition to the building as a whole. It was in bad condition. There were holes in the roof and the door was hanging off. The west elevation walls were pushing in. There was a banking-up of earth outside it to a height of about 1 metre, which had taken place over a long period and which had caused an ingress of water. It had brick walls. There were holes in the roof where slates had slipped off and not been replaced, and that also had allowed water in. There was a brick floor.

After consultation with building control and listed building authorities, it was decided to demolish the brewhouse. Consequently, work was required to the wall of the larder, and an entrance to the larder was created, which was also an entrance into the main house. Drawing 07 A shewed the kitchen with the left-hand wall of the brewhouse removed.

Part of the ground floor of the building had once been pigsties, which had extended from the old utility room to what was the larder. This had been converted into a downstairs bathroom, and rudimentary floors had been put in. These consisted of a thin layer of concrete, and then sand. Above this were three layers of linoleum interleaved with carpet. The larder had a brick floor, ribbed to allow animals' urine to run away It had a low ceiling, and for that reason the Appellant dug the floor out, to give the room a proper height. The old kitchen had had a sort of nominal floor. There was a cloakroom, a bathroom, and a utility room where the pigsties had been. The utility room also had a thin layer of concrete over the floor, with runnels for the escape of liquid from the pigsties. The smell of pigs was still apparent.

Plan 03 shewed the games room on the first floor. It was crudely built, with very thin walls more like an outhouse. There were studwork partitions for the purpose of separating that large space into smaller spaces. That too was of poor standard, being nothing but studwork with plasterboard put over it. In the bathroom there were some plastic tiles, but again the building was very poor.

The front outside wall of the middle section of the building had a glazed lobby. This was in not too bad condition, though it had been built of cheap materials. The top wall had an earth bank against it up to 1 ~ metres for the whole length of the wall, excluding the brewhouse. The earth had been removed and a concrete plinth erected, about 1 metre high, possibly to discourage water. However, it was broken down, and water had drained from the earth through weaknesses in the plinth into the building. The plinth had pulled away from the wall over the years, allowing water to drain inwards. The whole of the downstairs part of the building was damp. The damp had affected the wall. This was a brick wall built on a rubble wall, and seepage had damaged the rubble wall. For that kind of building at that period it was traditional to have a rubble foundation. The Appellant removed the earth and then the plinth, and then made good, rebuilding the bottom of the wall as they went along. This was done a bit at a time.

The roof had tar on it, because of the missing slates. There was nothing inherently wrong with the roof until it was tarred. If that had not been done it could have been stripped and renailed and the slates replaced. In a letter to the Commissioners dated 15 January 2003, Mr Dave Brown, of Bishop Fleming, chartered accountants acting for the Appellant, said "Apart from a couple of missing or defective tiles, the roof structure was basically sound, albeit that it was covered with tar." The tarred slates could not be reused, so that it was necessary to replace all the roof slates. It was not a normal practice to tar slates. The slates were replaced with Welsh slates throughout. The highest part of the roof was thought to have been the original house. Over the living-room, the timbers also had to be replaced. The roof as it now is is in the same place as the former roof and is the same shape.

There was an outside staircase the brickwork of which was very corroded. It had a wooden handrail, which was in very poor condition. This was replaced with brickwork steps and a metal handrail.

One of the chimney-stacks had to be taken down by about half. The other two had corroded bricks, and these had to be removed and replaced.

Plan 07A shews the sitting-room. The thick line at one side of the sittingroom denotes a wall that had to be replaced, both on that floor and on the floor above. It may have been the outside wall of the original house.

A lot of the windows had to be replaced. These had been plastic doubleglazing over post-war Crittall windows. In the same letter of 15 January 2003, it was said on behalf of the Appellant that the windows were in a good state of repair, but were metal windows of the 1950s and '60s, and were quite out of character, and had been replaced with windows more in keeping with the property. The existing windows, Mrs Hardy said, had clearly not been opened for a long time. They were corroded and unusable. She described them as old and tatty. About five or six of the original windows could be and were retained, and two wooden windows (as shewn in plan 07A). The glazed lobby was removed altogether, and a new front door was put where it had been. The doorway may have been slightly moved. Where the main entrance had been there is now no entrance. There was also a new back door into the extension, and a new french window from the dining-room, created from the existing window.

Floors. The ridged concrete of the ground floor was taken up and 4 inches of earth removed. A damp-proof course was put in, and then it was floored in the normal way. In the dining-room there was a concrete floor, also in the kitchen. There was a new wooden floor put into the study; Mrs Hardy could not remember what kind of a floor there had been before. The living-room was above a vaulted cellar. Its floor was partly concreted and partly quarry tiles, and that was left as it was.

It was discovered that there was only one beam in the ceiling above the livingroom. Proper beams were put in, and a new floor above and ceiling below were made. When the wall was replaced (see paragraph 16 above) it was necessary to do some work to the floor and ceiling. The original straw and concrete were replaced and new joists and floorboards put in. That extended to the whole of the sitting-room ceiling, the whole of the bathroom floor, and also the attic above bedroom 1. There had been very crude floorboards, like coffin-boards. These were replaced with joists and floorboards, and the stairs to the attic were rebuilt. A new stairway to the "Gallery" was created. The original beams in the ceiling of bedroom 1 were exposed and left visible.

A very comprehensive drainage system was needed to replace the original. Therefore the Appellant installed a complete new drainage system. Lavatories and en-suite bathrooms were installed.

The cellar was repainted, and all the corroded bricks were replaced in walls, floor and steps. Some new internal doors were made and fitted. None of the original external doors was worth keeping, and all were replaced.

The second floor had been an open space, with a rudimentary screen across it to make two bedrooms. It was converted into a bedroom with a bathroom and sittingroom.

The plans

Drawing 02 shews the ground floor plan of the house before the work started, and the four elevations from each side and each end of the building. Starting at the south end of the ground floor plan, it shews first the brewhouse, with an entrance to the outside, but with no internal access to the house. The elevations shew that it is at ground floor level only. Moving north, the next room is the larder, which is the whole width of the house. Next to that, the other side of a thin wall or partition, is a cloakroom and bathroom with a shower, which leads into the utility room. Between the cloakroom and the utility room there is a substantial wall. Running from the south end of the larder to the north end of the cloak room, along its west wall, is labelled "thrall 500 mm high": that was an animal feeding trough. North of the utility room was the kitchen. There was another thin wall between the two. Outside the cloak room, the utility room and part of the kitchen was a glazed lobby. North of the kitchen, the other side of a substantial wall, was the dining-room, outside which, on the east side, was an outside staircase, under which was a space for stowage of bins. North of the dining-room was the sitting-room, and north of that again the study, which was the end room of the house. To the east of the sitting-room and study was the living-room. In the external comer formed by this projection was a lobby and what had been the main entrance to the house. On the outside wall of the living-room was written "Built 1607". We were told that under the chimney which ran up the outside of the east wall of the living room was a large brick-built water storage. The elevations shewed that there was a first floor the length of the house (except over the brewhouse) and a second floor only over the northern end of the building, above the living-room and study, in what was probably the original house. The cellar was under the living-room. For the length of the west wall, except for the brewhouse, ran the concrete plinth.

Drawing 03 shewed the first and second floors, and the cellar. On the first floor, at the southern end was a bedroom, separated from the games room by a studwork partition. Beyond a further studwork partition were a bathroom, lobby, and w.c. There was then a substantial wall and a bedroom divided on its east side by a

Drawing 07A shews each floor (and the cellar, which appears to have remained unchanged) with the intended work, which was in fact carried out.

GROUND FLOOR

The single-storey brewhouse has been demolished. The first room is the kitchen, which occupies the space of the brewhouse and projects beyond that southward, with a new external wall, and a new chimney at the southern end. North of that is a breakfast room, where the larder was before. Then came a pantry and utility room. Past the pantry, to the east, ran a short passage to a hallway from which a new staircase ascends to a gallery on the first floor. Leading off the hallway is a w.c. North of that is the dining-room, the whole width of the house, where the kitchen had been. Next comes what was the dining-room and sitting-room, labelled together sitting-room on drawing 07A, though there is a wall dividing them with a doorway at the eastern end. That is the wall that had to be removed and rebuilt. Beyond that is the study, as before, and east of that what is called a family room, formerly the livingroom. The glazed lobby has been removed, and also the former main entrance, though the space which was the lobby inside it remains.

FIRST FLOOR

There is no accommodation above the new kitchen. Above the breakfast room and pantry is a bedroom and bathroom, a built-in cupboard, the gallery, and the top of the new staircase. The former thin wall at the north side of the bedroom has been removed, and the bedroom is larger than it was. The bathroom and head of the staircase are bounded by a new wall. The wall that had been at the north end of the games room has been removed. Where there was a bathroom there is now a bedroom. North of that is another bedroom, at the north end of which is the wall which had to be rebuilt. North of that again is a bathroom at the west side and a landing outside it on the east. The end room at the north is unlabelled. It is much smaller, and has an area divided off at the east side labelled "robes". The room to the east of that is, as before, a bedroom.

SECOND FLOOR

The second floor has become a bedroom and sitting-room, the sitting-room apparently divided by a new wall from a small landing at the top of the stairs.

The decision

The Commissioners' decision was contained in a long letter, from Mrs Fran Clements, dated 17 July 2003. The letter set out the facts, and then referred to Notice 708, "Buildings and Construction", which set out the Commissioners' view of the law in this province. (The letter does not refer to the legislation on the subject.) The letter then goes on to pose and answer three questions. The first was, "Has major work to the fabric of the building, including the replacement of much of the internal and external structure, taken place? I.e., has the protected building been substantially reconstructed?" The letter then considers the plans of the work, and sets out what is understood to have been done. Mrs Clements came to the conclusion "that the external walls of the property have not been substantially reconstructed. Nor would I agree that the single storey extension increases the floor-space by 30%." Turning to the internal walls, Mrs Clements detailed those that were removed and the new walls that were constructed, and concluded that there "[did] not appear to have been any substantial reconstruction of internal walls, but a certain amount of removal and resiting of walls." As to the floors, Mrs Clements said, "In the analysis of building work, reference is made to repairs to existing unstable floors. Therefore there appears to be no substantial reconstruction of floors." Referring to the roof, she said that it appeared that the timbers remained and the slates were replaced. The answer to the question posed was, therefore "From the plans, photographs and information provided I consider that the building has not been substantially reconstructed, as it cannot be said that much of the internal and external structure has been replaced."

The second question was "Could 60% of the reconstruction have been zerorated as approved alterations?" That question, Mrs Clements said, was dependent upon whether there was substantial reconstruction of the internal and external structure. She referred to section 9 of Notice 708, and provided an analysis of the costs of the work, concluding that on the information supplied 71.63 per cent could be zero-rated, and 28.37 per cent standard-rated.

Thirdly, Mrs Clements asked "Has the building been gutted?" She considered that it had not been gutted as described in paragraph 10.3 of Notice 708.

Mrs Clements therefore concluded that "substantial reconstruction has not taken place. There has been no reconstruction of the fabric/basic structure of Abbotsbury Court which has had an extension built to provide a kitchen and has had the interior modernised." The letter included an analysis of the costs of the work, as between alteration and repairs and maintenance.

In a further letter of 26 September 2003, Mrs Clements said,

"Whilst completing my review, I realised that I had worded parts of my letter dated 21 July incorrectly. On pages 3, 4, and 5 of my letter I should not have used the words substantial and substantially. I enclose a copy of the letter showing the deletions, which I have initialled. Only when it has been established that a protected building has been reconstructed, does the word substantial become a consideration by satisfying either of the two questions at 2 and 3 on page 4 of my letter."

The Appellant's contentions

Mr Barlow, for the Appellant, submitted a skeleton argument. He said that the only issue in the appeal was whether, when the works were being carried out and when the house was sold thereafter, the Appellant was a person substantially reconstructing the building. It was not in dispute, he reminded us, that the building was a protected building, that the work was approved alteration, or that at least 60 per cent of it in terms of cost would fall within Items 2 or 3 of Group 6 of Schedule 8. He conceded that Note (4) to Group 6 added an additional condition to be complied with before what must otherwise be substantial reconstruction retains that status. Mr Barlow went on to argue that the structure of the provision is that reconstruction shall not be regarded as substantial reconstruction unless one of the conditions in Note (4) is fulfilled when the reconstruction is completed. He continued, that the expression "shall not be regarded as" implied that what might otherwise be substantial reconstruction is not substantial reconstruction unless one of those conditions is fulfilled. It followed that the meaning of substantial reconstruction had to be looked for elsewhere than in Note (4). What amounted to substantial reconstruction is, he contended, a question of fact, a proposition with which the Commissioners agreed. Since the Commissioners had also agreed that more than 60 per cent of the work fell within Items 2 and 3 of Group 6 it would follow, Mr Barlow contended, that they should agree that the supply was properly zero-rated under item 1, if Note (4) is a definition of "substantial reconstruction". It was clear that the Commissioners' contention was that the Appellant should have effected a substantial reconstruction and also fulfilled one of the conditions in Note (4).

The two conditions in Note (4) were not, however, irrelevant to the question of fact of what amounted to substantial reconstruction, Mr Barlow argued. Where substantial work was done and 60 per cent of it was in the course of an approved alteration, it was likely that that work, as an alteration, would be reconstruction rather than something else. It was not pleaded in the statement of case that the work was a repair or maintenance. It was conceded by the Commissioners that the work fell within Item 2; that concession also meant that it was accepted that the work was an alteration of the building and not just of one or more discrete parts of the building. The decision in Lordsregal Ltd v Customs and Excise Commissioners (2003) (Decision No. 18535) supported the Appellant's view of the correct legal position.

Mr Barlow referred to the decision letter of 17 July 2003, and the second question addressed by Mrs Clements (see paragraph 27 above). The answer given by Mrs Clements to that question was not correct in law; there was no distinction of internal and/or external structure. In any event it was agreed by the Commissioners that the 60 per cent condition had been complied with.

The Commissioners' contentions

Miss Neenan, for the Commissioners, also submitted a skeleton argument. In this she lists the work that was carried out to the house as set out in the letter of reconsideration of the Commissioners' decision. We note in passing that two of the items in that list are not quite accurate. The brewhouse was not extended to form the new kitchen and breakfast room. It was demolished and a new extension was built extending to beyond where the brewhouse had stood. The wall between the original sitting-room and dining room was removed, but it was rebuilt in the same place. Referring to the reconsideration officer's conclusion that there had been no reconstruction, there were three out of the five items which, according to the evidence before us, were not right. A number of internal walls were removed. They could hardly have been resited; what happened was that new walls were built, in different places. Repairs may have been made to unstable floors. But also, parts of the ground floor were refloored because they had no proper floors, only such as were suitable for pigsties. The whole of the roofwas reslated, using new Welsh slates.

It was the Commissioners' case that Abbotsbury Court had not been "substantially reconstructed". Miss Neenan contended that whether it had or not should be determined by a two-stage approach: first, to establish that the building was reconstructed, and secondly it must be established that the reconstruction is substantial in that it either meets what she termed the "shell" test, or the 60 per cent test, the two conditions set out in Note (4). Miss Neenan referred to Donald Barraclough v Customs and Excise Commissioners (1986) (No 2529), Vivodean v Customs and Excise Commissioners (1990) (No 6538) in which the approach set out in Barraclough was adopted, and Lordsregal Ltd (supra) in support of the two-stage approach.

The Commissioners contended that there had been no reconstruction of the building in the normal every-day meaning of the word, because on the facts of the case Abbotsbury Court remained fundamentally the same after the works as before. Miss Neenan relied in particular on the following points. First, that the building is in the same location and the external walls are the same size and in the same positions; secondly, that the external doors are in the same places; thirdly, that the roof was in the same place, of the same design and shape, and there had been no alteration of pitch or style; fourthly, that internal walls, mainly studwork partitions, had been "reconfigured and moved to increase or decrease the 'footprints' of the rooms", but the rooms were largely in the same place apart from minor differences. Miss Neenan summed the position up by saying that what had been done was to alter and refurbish the building in order to modernise it, as opposed to reconstructing it.

Miss Neenan also pointed out that the planning consent referred to "alteration and refurbishment" of the house; that the particulars of sale described "a superbly renovated and refurbished ... cottage"; and that the architect referred in quoting for the work to "the refurbishment of the existing house".

Finally, Miss Neenan contended that the question whether there had been substantial reconstruction should be approached by comparing the building before with the building after the work. If that were done, it could be seen that an extension had been built to the house, and that the interior had been modernised, but that there had been no reconstruction, nor was there any reuse of materials. What was done fell into the category of "minor enlargement of the ground floor and modernisation of the interior", as in Barraclough. The building had not been an "effective ruin" as in Lordsregal. The situation was more akin to that in Vivodean Ltd.

Even though the Appellant could shew that more than 60 per cent of the total cost had been within Item 2, that was not all that the legislation required. If that were all, it would be possible for a person to carry out a trivial amount of work to a listed building such that 60 per cent of it met that condition, and would be able to make a zero-rated grant of a "substantially reconstructed" building.

The Appellant's reply

Mr Barlow reminded the Tribunal that there had been partial reconstruction of an external wall, that the roof had been completely replaced, which was no mere repair, that the building had been extended, and that there had been demolition and rebuilding as well. Even if that had been the full extent of the work, that would not stop it being substantial reconstruction. Barraclough overstated the position in law if what it meant was that reconstruction is not the same as alteration: reconstruction could consist entirely of alteration. Lordsregal was not a very much stronger case than the present; it was not necessary for the building, before the work, to have been an effective ruin. Before the work the building could have been lived in, but was not of proper standard for present-day living. The work changed the house from that state into an up-to-date dwelling.

The purpose of zero rating is to encourage the extension of the life of listed buildings, and takes into account the fact that the cost of doing so is usually higher because they are listed buildings. There is no reason why modernisation should not be reconstruction. It was necessary modernisation. Viewed as a whole, the Appellant contended that it was substantial reconstruction.

Conclusions

For the Appellant to succeed, it must be shewn, first, that Abbotsbury Court was reconstructed, and secondly, that the reconstruction was substantial. It is not in dispute that it is a listed building, nor that the Appellant was the person carrying out the work to it. It is also not in dispute that more than 60 per cent of the cost was incurred on permitted alteration. The only remaining issue, therefore, is whether the work that was done was reconstruction, or was something else. A number of differing views as to the meaning of "reconstruction" were put forward by both parties. We find ourselves in agreement with some and not with others. We agree with Mr Barlow, that there is no reason why modernisation should not fall within the category of reconstruction. But that does not mean that modernisation, even large-scale modernisation, necessarily is reconstruction. We disagree that it necessarily follows from the first three points taken by Miss Neenan (see paragraph 36 above) that there was no reconstruction: if the house had been completely demolished and then rebuilt to exactly the same design as before, with or without the re-use of any original materials, producing a replica of the former building, it would be impossible to say that there had not been reconstruction. It is also implicit in Note (4)(b) that there may be substantial reconstruction if all external walls remain unchanged. Nor do we take the view that the expressions used in the planning consent, the architect's quotation, or the particulars of sale are of any real assistance: probably those who drafted those forms of words were not contemplating the terminology used in Group 6 of Schedule 8. In any case, such descriptions could not alter the situation as revealed by the evidence.

It is common ground that what is "reconstruction" is a matter of fact. It appears to us that the ordinary meaning of the word is the meaning which we should regard, since there is no statutory or other artificial definition. The ordinary meaning of it is, as it appears to us, the construction anew of something that was already there. To see whether there has been reconstruction of a building, one must look at the building as a whole, both before and after the work, and one must consider what the work actually was. The purpose for which the work was carried out does not appear to us to be relevant to consideration of whether there was reconstruction. Once it is established that reconstruction took place, then one goes on to consider whether that reconstruction was substantial. In the present case, it is clear that if the work was reconstruction it was substantial according to the statutory test in Note (4).

Before the work began, there was a house (why the sales particulars referred to a cottage we do not understand) which had not been lived in for some years, and had clearly fallen into a sad state of disrepair. In addition, a part of it had been in use as pigsties, and the floor of that was still suitable for such use. There was also a large animal feeding trough. Deterioration had taken place to the outside of the building too. This was notably the build-up of earth along the west wall, which had caused damage to that wall and had allowed water to enter the building. There was serious damp. The external staircase was in a bad state. Inside, there was one main wall which was in such a state that it required to be demolished and a new wall built in its place. There were several walls which were no more than studwork partitions. That was the condition of the house.

The layout of the house, inside and out, before the work was begun, is shewn in drawings 02 and 03 (q.v., in the Appendix to this decision). Comparison with drawing 07 A shews what the layout was after the work had been completed. On the ground floor, the brewhouse was demolished. Its end wall was removed, and its roof. Beyond where it had been, the house was extended and three new walls constructed to form the extended kitchen. The side walls of the brewhouse and the wall between it and the rest of the house survived. Northwards, the existing principal walls remained, and partitioning was removed. In the middle section, where the pigsties had been, the rooms were somewhat rearranged, and a new staircase put in, leading to the gallery above. The glazed lobby was removed. The old kitchen became the dining-room. The kitchen boiler was removed and a fireplace put in instead. The former diningroom and sitting room became the sitting-room, divided as it was by the wall that had been removed and rebuilt. The study and living room were largely unchanged, except, no doubt, for extensive redecoration. The small lobby in the angle of the house remained, but the main entrance of the house was moved. On the first floor, the bedroom and games room became a bedroom, bathroom, gallery and stair-head, thereby adding a second bathroom. The former bathroom and lobby became a new bedroom. The next bedroom remained so. The landing and sitting area became another bathroom with a landing outside, where the head of the main staircase was, with an en suite bathroom and wardrobe. The remaining bedroom was still a bedroom. On the second floor, the two rooms which were two bedrooms became a single bedroom with an en suite bathroom and a small sitting-room. Throughout the building, some windows were retained, but most of them replaced. The roof covering was completely renewed but not the roof timbers. The rubble foundation to the wall on the west side was rebuilt. The outside staircase was repaired and the hand-rail replaced. The house was rewired, and a new drainage system installed.

Clearly, a considerable amount of work was done on the house. We have to ask, did it amount to reconstruction? It was not, in our view, in the same category as that in Lordsregal, where the Tribunal described the work in these terms, in paragraph 47:

"[The property] may not have been demolished as such and then rebuilt reusing as much of the materials as could be salvaged. Instead, the property was through a painstaking process largely taken down section-by-section and rebuilt with whatever of the original materials as could be salvaged .... As to the type of building that emerged, there was no true comparison between what was there before and after."

That was the case in which the building before the works was described as "in effect a ruin that required rebuilding", and might be considered an extreme case. The present building does not, in our view, fall into that category, or even approach it very closely.

The work carried out in Vivodean was also quite extensive, and included such things as replacement of lead piping with copper, renewing internal partitions, repairing and replacing windows, demolition of a wing, replacing a floor, repairing the roof. The Tribunal concluded that that was not reconstruction. We were also referred to Barraclough. In that case the appellant had enlarged the kitchen of the building and installed a cloakroom, replaced some windows, reroofed the porch with lead, installed central heating, constructed a second bathroom, rewired the building, and installed a modem kitchen. This, too was considered not to have been reconstruction, but "a minor enlargement of the building and a modernisation of its interior". However, it does not seem to us that examples afforded by other decisions are particularly helpful, since what we have to do is to decide, as a matter of fact, on the evidence before us, whether Abbotsbury Court was reconstructed. Each case must be one of impression, and that impression is derived from examination of the evidence.

Our impression, on the evidence which we have seen and heard, is that what was done to Abbotsbury Court was not reconstruction. In our view, a description of what was done is more in the class of the "minor enlargement of the building and a modemisation of its interior", in the words of the Tribunal in Barraclough. We do not, therefore, need to decide whether or not it was "substantial". However, on the evidence before us, in our view, had the work amounted to reconstruction, we would have held that it was substantial.

For the above reasons, this appeal must be dismissed. The Commissioners indicated at the end of the hearing that they would not be seeking their costs in the event of their succeeding. Accordingly, we give no direction as to costs.

ANGUS NICOL CHAIRMAN

RELEASED: 18 February 2005

LON/03/789