Almond v Ash Brothers & Heaton Ltd ; Dawkins (Valuation Officer) v Ash Bros & Heaton Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WILLMER,LORD JUSTICE DANCKWERTS |
| Judgment Date | 28 July 1967 |
| Judgment citation (vLex) | [1967] EWCA Civ J0728-3 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | LVC/446/1965 |
| Date | 28 July 1967 |
[1967] EWCA Civ J0728-3
In The Supreme Court of Judicature
Court of Appeal
Civil Division
Appeal front Lands Tribunal Order 26th July, 1966.
Lord Justice Willmer
Lord Justice Danckwerts
and
Lord Justice Russell
Mr DOUGLAS G.H FRANK, Q.C., and Mr WILLIAM GLOVER (instructed by The Solicitor of Inland Revenue) appeared on behalf of the Appellant (Valuation Officer).
Mr STEPHEN BROWN, Q.C., and Mr M.K. HARRISON-HALL (instructed by Messrs Johnson & Co., Birmingham) appeared on behalf of the Respondents.
I am sorry that lord Justice Russell has had to leave us as his presence is required in another court, but I will presently read the judgment which he has prepared.
This is an appeal by way of Case Stated from a decision of the Lands Tribunal dated the 26th July 1966 relating to the assessment for rating purposes of an industrial hereditament in Birmingham. The case arose out of a proposal by the respondent ratepayers, dated the 27th September 1963, that the assessment for rating should be reduced on the ground that It was excessive and unreasonable.
The question raised by the appeal is whether, in valuing the hereditament for rating purposes, allowance should be made for the probability that within about a year of the date of the proposal a part of the premises would have to be demolished in furtherance of a road widening scheme contemplated by the local authority, or whether on the other hand this probability should be wholly ignored. It was agreed between the parties that If the probability of demolition should properly be taken into account the rateable value of the hereditament should be £3,050, but that otherwise the rateable value should be £3,400. The local valuation court decided In favour of the respondent ratepayers that the lower figure should be taken, and on appeal this decision was upheld by the Lands Tribunal. The valuation officer now appeals to this court.
The hereditament consists of factory premises with frontages to Adams Street and Dartmouth Street. The hereditament is shown on a plan which was placed before the court, and which shows part of it coloured blue and part rod. The respondent ratepayers are the owners of the blue part, but they hold the red part as tenants of the Birmingham Corporation on a yearly tenancy in the following circumstances.
They were originally owners of the whole of the property, but as early as 1946 the Birmingham Corporation, as the local planning authority, made an order for the compulsory purchase of certain land which included the red part of the respondents' hereditament. This order was confirmed by the Minister of Town and Country Planning in 1947, and as a result on the 23rd June 1949 the Birmingham Corporation acquired the respondents' interest in the red part of the hereditament, which they thereupon let to the respondents on a yearly tenancy. The red part was shown on the Birmingham Corporation's plan annexed to the compulsory purchase order as due for redevelopment in 1965 in connection with a road widening scheme.
The decision of the Lands Tribunal contained the following findings of fact. "(7) Any actual tenant of the said hereditament taking a tenancy thereof on the date of the respondents' proposal would have paid less rent in each year for the said hereditament if it was known or reasonably anticipated that that part of the hereditament coloured red on the said plan marked 'A' would be demolished for road widening purposes within about a year. At the date of the said proposal it could have been reasonably anticipated that the area coloured red on the said plan marked 'A' would be required for road widening purposes within about a year".
Notwithstanding these findings of fact it has been contended on behalf of the valuation officer that in fixing the rateable value of the hereditament the reasonable anticipation of demolition within about a year ought to be totally disregarded. This is said to follow from the wording of section 22, subsection (1) (b) of the Rating and Valuation Act 1925, the material part of which provides as follows; "(b) There shall be estimated the rent at which the hereditament might reasonably be expected to let from year to year If the tenant undertook 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 that rent, and the annual rent as so estimated shall, for the purposes of this Part of this Act, be taken to be the net annual value of the hereditament".
This, it is said, specifically requires that the value should be based upon what a hypothetical tenant would be required to pay if he took the hereditament on a tenancy from year to year, "A tenant from year to year", said Lord Esher in Reg. v. South Staffordshire Waterworks Company, (1885) 16 Queen's Bench Division, 359, at page 370, "Is not a tenant for one, two, three or four years, but he is to be considered as a tenant capable of enjoying the property for an indefinite time, having a tenancy which it is expected will continue for more than a year, but which is liable to be put an end to by notice".
This statement of principle has come to be generally accepted, and has been repeatedly followed in later cases, notably by the House of Lords in Railway Assessment Authority v. Southern Railway Company, ( 1936 Appeal Cases, 266)" This being so, it is contended, it would be quite wrong to pay regard to the likelihood of demolition within about a year, for the statute requires the valuation to be based on what would be paid by a hypothetical tenant able to look forward to some degree of continuance of his tenancy.
Considering the number of hereditaments which have had to be demolished in recent years in furtherance of schemes for redevelopment and road improvement, it is surprising to find that there is such a paucity of authority directly in point. Counsel for the valuation officer referred us to Lloyd v. Rossleigh Limited, 9 Ryde's Rating Cases 175, where a question arose as to the possible effect of a proposed redevelopment plan, but it was decided by this court on the facts that the proposed plan made no difference. We were also referred to the decision of the Court of Session in Langlands v. Assessor for Midlothian, 3 Rating and Valuation Reporter 443, where the occupier of" a House was a squatter who claimed inter alia that because of a demolition order his house ought to be assessed at a nil valuation. This was held to be a bad point, Lord Sorn observing that the world of rating Is "a hypothetical realm in which there is no place for demolition orders".
Burley v. Birch , 5 Ryde's Rating Cases 147, was a decision of the Lands Tribunal (incidentally the same member of the Lands Tribunal as heard the appeal in the present case) where the facts were not wholly dissimilar from those of the present case. The ratepayer was a tenant who had been served with notice to quit by his landlord, in accordance with a provision in the lease, because the landlord intended to demolish and rebuild the premises. It was held that, in estimating the rent which a hypothetical tenant from year to year would be expected to pay, the landlord's Intention to demolish the premises was immaterial and should be ignored.
It has been contended on behalf of the valuation officer that the decision of the Lands Tribunal in the present case is wholly inconsistent with that in Burley v. Birch, and that the two decisions cannot stand together. Burley v. Birch is not, of course, binding on this court, but counsel for the ratepayers shrank from contending that it was wrongly decided. He sought to distinguish that decision on the ground that an intention to demolish on the part of a private landlord (about which he might always change his mind) was essentially different from the certainty of demolition resulting from the implementation of a statutory scheme, which affects the property in question regardless of the wishes and intentions of the actual landlord and tenant.
While it is no doubt true that the world of rating is a hypothetical realm so far as concerns the presumed landlord and tenant, I do not think that this represents the whole picture. For the hereditament which has to be valued Is a real and actual hereditament, the circumstances of which have to be evaluated in estimating what the hypothetical tenant from year to year would be prepared to pay for it.
This consideration emerges with clarity from the very full judgment of Lord Justice Scott in Robinson Bros. (Brewers) Limited v. Houghton and Chester-le-Street Assessment Committee, ( 1937 2 King's Bench Division 445) where he took the opportunity to review in detail the basis on which rating assessments should proceed. The learned Lord Justice said at page 469 of the report: "It is the duty of the valuer to take Into consideration every intrinsic quality and every intrinsic circumstance which tends to put the rental up or down just because it is relevant to the valuation and ought therefore to be cast into the scales of the balance". He went on at page 470: "The objective being the real value of the here ditament" (and I venture to emphasise the use of the word "real") "the inquiry is primarily economic and not legal". Later, at page 474, he said; "Whilst the tenant is hypothetical and the landlord who is to let to the tenant is necessarily also hypothetical, the hereditament is actual…. All the intrinsic advantages and disadvantages must be considered and weighed. It is just that particular hereditament …. with all its attractions for would-be tenants …. and also with all its imperfections anddrawbacks which may deter or reduce competition for it". In thus...
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