Avison Young Ltd v David Jackson (Valuation Officer)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Arnold,Lord Justice Peter Jackson,Lord Justice Henderson |
| Judgment Date | 01 July 2021 |
| Neutral Citation | [2021] EWCA Civ 969 |
| Docket Number | Case Nos: C3/2020/1020, C3/2020/2062 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 969
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (LANDS CHAMBER)
Martin Rodger QC, Deputy President and Martin Rodger QC, Deputy President and P D
McCrea FRICS
[2020] UKUT 58 (LC) and [2020] UKUT 238 (LC)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Henderson
Lord Justice Peter Jackson
and
Lord Justice Arnold
Case Nos: C3/2020/1020, C3/2020/2062
Luke Wilcox (instructed by Mills & Reeve LLP) for Avison Young Ltd
George Mackenzie (instructed by General Counsel and Solicitor to Her Majesty's Revenue and Customs) for Mr Jackson
Matthew Donmall (instructed by General Counsel and Solicitor to Her Majesty's Revenue and Customs) for Mrs Moore
Daniel Kolinsky QC (instructed by Mills & Reeve LLP) for Great Bear Distribution Ltd
Hearing dates: 23–24 June 2021
Approved Judgment
Introduction
These appeals from the Upper Tribunal (Lands Chamber) raise issues as to the scope of the power of the Valuation Tribunal for England (“the VTE”) under regulation 38(7) of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009 (SI 2009/2269, “the VTE Regulations”) to require an alteration to a rating list that it is ordering to be limited to the duration of the circumstances giving rise to the alteration, and as to how that power should be exercised.
The appeals to the VTE in these and many other cases were stayed while an appeal from the Court of Appeal to the Supreme Court was pending in the case of S J & J Monk v Newbigin (VO) [2017] UKSC 14, [2017] 1 WLR 851. This delay not only explains why the VTE's decisions in these cases were made so long after the events which gave rise to the alterations in question, but also has contributed to the significance of the issues identified in the preceding paragraph. I will endeavour to explain why this is so later in this judgment.
Avison Young Ltd v Jackson
This appeal concerns the third floor and part of the second floor of an office building at 10 Aldermanbury, also known as 65 Gresham Street, London EC2 6NQ (“10 Aldermanbury”). On 3 June 2014 GVA Grimley Ltd, now known as Avison Young Ltd (“AY”), entered into an agreement to take a lease of 10 Aldermanbury which included an obligation on the landlord to carry out works to fit them out to Category A standard and an obligation on AY to install an internal staircase linking the two floors.
At that time, 10 Aldermanbury had a total floor area of about 4,598 sqm. It was entered in the 2010 non-domestic rating list with a rateable value of £1,830,000.
On 1 September 2014 works were commenced at 10 Aldermanbury, the effect of which was to render 10 Aldermanbury incapable of beneficial occupation. The works were finished on 23 January 2015, and AY entered into occupation of the premises on 9 February 2015.
On 3 October 2014, during the currency of the works, AY submitted a proposal to alter the rating list (“the AY Proposal”). The AY Proposal sought a reduction in 10 Aldermanbury's rateable value to £1 with effect from 1 September 2014. The AY Proposal was made on the ground that circumstances affecting 10 Aldermanbury had changed on that date. The detailed reasons for the AY Proposal were stated as being that “a refurbishment/fit out, including structural alterations, is ongoing and the part second and thrid [sic] floors are incapable of beneficial occupation as offices during construction works”.
Following the conclusion of the works, 10 Aldermanbury had a floorspace of about 4,551 sqm, approximately 50 sqm smaller than it had been before the scheme, primarily due to the installation of the internal staircase. Nevertheless, AY submitted no proposal that the entry for 10 Aldermanbury in the list be altered to reduce its rateable value with effect from 23 January 2015 as a result of a material change in circumstances.
On 1 May 2016 the Valuation Officer issued a notice reducing the rateable value of the hereditament to £1,800,000 with effect from 1 April 2015. (Subsequently the Valuation Officer changed his mind about this, and succeeded in persuading the Upper Tribunal that there had in fact been no reduction in the rateable value of 10 Aldermanbury, but that must be disregarded for present purposes.)
It is common ground that the Valuation Officer was precluded from back-dating the reduction in rateable value any further by virtue of regulation 14(2)(b) of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 (SI 2009/2269) (“the ALA Regulations 2009”) as amended by the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2015 (SI 2015/424) (“the ALA Regulations 2015”).
By the time the matter came before the VTE on 22 February 2019, it had been agreed that the rateable value of the hereditament should be reduced to nil for the period from 1 September 2014 to 23 January 2015. The Valuation Officer contended that the rateable value should be restored to £1,830,000 with respect to the period from 23 January 2015 to 31 March 2015. AY disputed this.
M.F. Young, the Vice-President of the VTE, held in a decision dated 15 April 2019 that regulation 38(7) of the VTE Regulations empowered the VTE to order the Valuation Officer to amend the entry in the rating list for 10 Aldermanbury to “premises under reconstruction” with a rateable value of nil for the period from 1 September 2015 to 23 January 2015 and that it was appropriate to make that order.
The effect of this order was that 10 Aldermanbury remained in the list with a rateable value of £1,830,000 from 23 January 2015 to 31 March 2015. The difference in the rates payable by AY as a consequence of the rateable value being shown as £1,830,000 rather than £1,800,000 was roughly £2,000.
On an appeal by AY against that decision, the Upper Tribunal (Lands Chamber) (Martin Rodger QC, Deputy President) held in a decision dated 20 February 2020 ( [2020] UKUT 58 (LC), [2020] RA 239) that regulation 38(7) empowered the VTE to make the disputed order, that the Vice-President was entitled to exercise his discretion in the way he did and that, if it fell to the Upper Tribunal to exercise the discretion afresh, it should be exercised in the same way. The Upper Tribunal subsequently granted AY permission to appeal to this Court.
AY's case is that the rateable value of 10 Aldermanbury should remain nil in respect of the period from 23 January 2015 to 31 March 2015, thus relieving AY of the obligation to pay rates for that period, because the VTE had no power under regulation 38(7) temporally to restrict the alteration in the rating list in the way that it did. AY does not challenge the way in which the VTE exercised its discretion if it did have such power.
Moore v Great Bear Distribution Ltd
This appeal concerns a warehouse on an industrial estate located at 4 Freeston Drive, Nottingham NG6 8UZ (“Freeston Drive”). Great Bear Distribution Ltd (“GBD”) acquired Freeston Drive on 16 June 2014, and undertook works to it between 23 June and 3 October 2014 which included the demolition of a small office block which adjoined the warehouse and alterations to the dock levellers. It is common ground that Freeston Drive was incapable of beneficial occupation during the course of those works. GBD resumed beneficial occupation on 4 October 2014 after the completion of the works.
The rateable value of Freeston Drive was shown in the 2010 rating list as £825,000 prior to the works, and it remained in that list at £825,000 until the 2010 list was replaced by the 2017 list on 1 April 2017.
On 2 February 2015, after the completion of the works, GBD submitted a proposal that the entry in the 2010 list be deleted with effect from 16 June 2014 on the ground that the property had been demolished or no longer existed (“the GBD Proposal”). GBD's detailed reasons stated that the assessment should be deleted “as a result of building works”.
Although the works had been completed by that time, no proposal was submitted by GBD that the entry for Freeston Drive in the list should be altered to reduce the rateable value with effect from 4 October 2014 on the ground of a material change of circumstances.
By the time the GBD Proposal came before the VTE on 3 October 2019, the Valuation Officer was prepared to accept that the rateable value of Freeston Drive should be reduced to nil for the period from 23 June to 3 October 2014 because the property was incapable of beneficial occupation during that period. Furthermore, the Valuation Officer accepted that, as a result of the works, the rateable value of the hereditament had been reduced to £745,000. The Valuation Officer contended that the entry for Freeston Drive in the 2010 rating list should be altered to that value with effect from 4 October 2014, alternatively that the rateable value should revert to £825,000 with effect from that date. GBD disputed this.
It is common ground that:
i) GBD lost the opportunity to make any proposals in respect of the period prior to 1 April 2015 on 31 March 2015 by virtue of paragraph 14(2)(a) of the ALA Regulations 2009 as amended by the ALA Regulations 2015.
ii) The Valuation Officer lost the opportunity to alter the rating list other than to give effect to a proposal for a period earlier than 1 April 2015 on 31 March 2016 by virtue of paragraph 14(2)(a) of the ALA Regulations 2009 as amended by the ALA Regulations 2015.
iii) GBD lost the opportunity to make proposals to alter the rating list with effect from 1 April 2015 on 31 March 2017 by virtue of regulation 5 of the ALA Regulations 2009 as amended by the ALA Regulations 2015...
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