Almond v Ash Brothers & Heaton Ltd ; Dawkins (Valuation Officer) v Ash Bros & Heaton Ltd

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Guest,Lord Pearce,Lord Donovan,Lord Wilberforce,Lord Pearson
Judgment Date26 March 1969
Judgment citation (vLex)[1969] UKHL J0326-1
Date26 March 1969

[1969] UKHL J0326-1

House of Lords

Lord Guest

Lord Pearce

Lord Donovan

Lord Wilberforce

Lord Pearson

Dawkins (Valuation Officer)
and
Ash Brothers and Heaton Limited

Upon Report from the Appellate Committee, to whom was referred the Cause Dawkins (Valuation Officer) against Ash Brothers and Heaton Limited, that the Committee had heard Counsel, as well on Monday the 10th as on Tuesday the 11th, days of February last, upon the Petition and Appeal of Kenneth Roger Almond (Valuation Officer) (since deceased), of 5th Floor, Cumberland House, 200 Broad Street, Birmingham 15, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 28th of July 1967, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioner might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet (which said Appeal, upon the death of the said Kenneth Roger Almond (Valuation Officer), was, in pursuance of an Order of this House, of the 30th day of May 1968, revived in the name of William John Dawkins (Valuation Officer)); as also upon the Case of Ash Brothers and Heaton Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 28th day of July 1967, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House; And it is further Ordered, That the Appellant do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.

Lord Guest

My Lords,

1

This appeal raises an important and far-reaching question on the law relating to rating. It is, shortly stated, whether the prospect of an early demolition of premises by a local authority is a relevant factor to be taken into consideration in assessing the rateable value of the property.

2

The Respondents were originally owners of the whole property consisting of works and premises at Dartmouth Street, Birmingham. Early in 1946 the Birmingham Corporation, as the local planning authority, made an order for the compulsory purchase of part of the Respondents' property. This order having been confirmed by the Minister, the Corporation acquired the Respondents' interest in that portion, which they thereupon let to the Respondents on a yearly tenancy at a rent of £300 per annum exclusive of rates. The part of the hereditament compulsorily acquired was shown on a plan as due for redevelopment in 1965 in connection with a road widening scheme. It was reasonably anticipated that the part in question would be demolished for these purposes within about a year.

3

The local valuation court on 27th April, 1965, upon a proposal by the Respondents reduced the assessment from £3,500 to £3,050 rateable value. An appeal by the Appellant Valuation Officer suggesting a figure of £3,400 as the rateable value was dismissed by the Lands Tribunal who upheld the decision of the local valuation court. The Lands Tribunal stated a case for the opinion of the Court and the Court of Appeal unanimously dismissed the appeal.

4

It was agreed between the parties:

"Any actual tenant of the hereditament taking a tenancy thereof on the date of the Respondents' proposal would have paid less rent in each year for the hereditament if it was known or reasonably anticipated that the part of it in question would be demolished for road-widening purposes within about a year. At the date of the proposal it could have been reasonably anticipated that that part would be required for road-widening purposes within about a year."

5

The parties were not agreed as to the type of tenancy or the term thereof on which a tenant would have taken an actual tenancy of the hereditament in the circumstances at the date of the proposal. It was agreed 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 it should be £3,400.

6

Section 22 (1) ( b) of the Rating and Valuation Act, 1925, provides as follows:—

"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."

7

There is a long series of cases in which the test for assessing the rateable value of hereditaments has been considered. In Great Eastern Railway Co. v. Haughley (1866) L.R. 1 Q.B. 666 Cockburn C.J., at page 679, said:

"But I think it is one thing to start with the assumption that you are dealing with a tenancy from year to year, and another thing to say that the hypothetical tenant, in calculating what he can reasonably pay as rent for the premises, is necessarily to assume that his tenancy would not last beyond a year. I think the possibility of its longer duration is one of the surrounding circumstances which the tenant from year to year would take into account."

8

This was followed by Regina v. South Staffordshire Water Works Co. (1885) 16 Q.B.D. 359 where Lord Esher M.R. at page 370 said:

"A tenant from year to year 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."

9

In Smith v. Birmingham Church Wardens (1888) 22 Q.B.D. 211 Wills J. at page 219 said:

"It is to no purpose to say that such property cannot in practice be let by the year: no more can railways, canals, docks, or gasworks. The Act of Parliament requires the assumption of a tenancy from year to year to be made, and you can no more impugn the hypothesis of such a tenancy in rating matters than in logic you are permitted to deny your opponent's hypothetical premiss."

10

Later he said, at page 220:

"It seems to me to follow that, if you are compelled to assess the occupier, whatever his actual period of past or prospective occupation, upon the assumption that there is a tenancy for a year, it is idle to talk of his being assessed at a less sum than he otherwise would be assessed at because he may in fact occupy for a week only. The hypothetical tenant and the actual tenant are two separate and distinct entities. The hypothetical tenant will give neither more nor less for his year's occupation because the actual tenant only wants to occupy for a week or a fortnight. The tenant who, ex hypothesi, is to occupy for a year cannot be put as a person who ought to pay a rent less than the fair rent for a year on the ground that there will be a week or a fortnight out of the year when the occupation will cease. That would be to contradict the hypothesis which you are bound to assume."

11

His decision was affirmed by the Court of Appeal (1889) 22 Q.B.D. 703 where Coleridge C.J. at page 705 said:

"In this case we have to do what Courts have from time to time in such cases complained of having to do, viz., to apply the terms of the Parochial Assessment Act to a subject-matter to which they are not really applicable. It has been pointed out in the court below that the terms of the Act are really not applicable to a number of very valuable rateable properties, which have come into existence since the Act was passed, and which therefore were not in the contemplation of the legislature in passing it, such as railways and gasworks. In such cases the hypothesis of a tenancy from year to year is really inapplicable. How can it be supposed that anyone would become tenant from year to year of an isolated portion of a railway? What is true of great properties, such as railways, may also be true of smaller matters; and it is found that this tenement of the value of five shillings a week is not capable of being let on a tenancy from year to year, but can only be let on a tenancy from week to week at a weekly rent. Therefore here, too, we have to apply to what is undoubtedly a rateable subject-matter a test which is in reality inapplicable. By the terms of the statute the matter to be ascertained is at what rent this tenement right reasonably be expected to let from year to year upon the hypothesis that is could be so let, a somewhat difficult problem when such hypothesis is in fact found to be an impossible one. Under these circumstances one must get at the amount of such rent in the best way one can, applying the principles of the law of rating as far as they can be made applicable."

12

In Railway Assessment Authority v. Southern Railway Co. [1936] A.C. 266, Viscount Hailsham L.C. at page 284 said:

"The definition requires an estimate of the sum which a hypothetical tenant might be expected to pay to a hypothetical landlord. It was well settled before the Act that it was necessary in estimating such a rent to take into account the owner of the hereditaments as a possible tenant: Reg. v. School Board for London;London County Council v. Churchwardens etc. of Parish of Erith and Assessment Committee of Dartford Union; and, further, that the hypothetical tenant, though only a tenant from year to year, is...

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