Clayton v British Transport Commission
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS |
| Judgment Date | 04 April 1955 |
| Judgment citation (vLex) | [1955] EWCA Civ J0404-1 |
| Date | 04 April 1955 |
| Court | Court of Appeal |
[1955] EWCA Civ J0404-1
In The Supreme Court of Judicature
Court of Appeal
The Master Of The Rolls (Sir Raymond Evershed)
Lord Justice Jenkins and
Lord Justice Romer.
In the Matter of the Local Government Act, 1948
In the Matter of an Appeal to the Lands Tribunal Against a Decision of a Local Valuation Court for Kingston-Upon-Hull and East Riding (South)
Mr M. L. LYELL, Q. C. and Mr PATRICK BROWNE (instructed by The Solicitor of Inland Revenue) appeared on behalf of the Appellant.
Mr MICHAEL ROWE, Q. C. and Mr POTTER (instructed by Mr M. H. B. Gilmour) appeared on behalf of the Respondents.
This is an appeal by the Valuation Officer for the Kingston-upon-Hull Rating Area, and relates to certain premises owned and occupied by the British Transport Commission through the Docks and Inland Waterways Executive as part of the docks undertaking of that Executive. I need not take time by any detailed reference to the premises. They consist of offices which were formerly railway hereditaments within the meaning of section 1 of the Railway (Valuation for Rating) Act, 1930, and were rated accordingly down to the commencement of the Local Government Act, 1948. By section 85 of that Act railway or canal hereditaments were exempted from rates, and, because the premises then answered that description, they were therefore removed from the valuation list. In January, 1952, however, the use of the premise; was changed from railway purposes to dock purposes; and as the definition of railway and canal hereditaments in section 86 of the 1948 Act does not include hereditaments used for dock purposes they ceased to qualify for the exemption and became liable to be restored to the valuation lint. The question in the cane is: at what values should they be restored?
In paragraph 8 of the Case Stated it is said that it was agreed between the parties for the purposes of the appeal before the Lands Tribunal that if the Valuation Officer wan entitled to make an independent valuation of these hereditaments by reference to the rent which they would command as commercial offices, then the figures which he had proposed would not be excessive, and also that "if the hereditaments ought to be valued as part of the dock undertaking" the values should be those determined by the local valuation Court. That agreement is in fact recorded in certain correspondence annexed to the Case.
It was contended as a preliminary point both below and in this Court by Mr Rowe that by that agreement the Appellant, who was the Valuation Officer, had in effect conceded himself out of the arena; for it is quite apparent from the way in which itis stated and from the contentions recited in the Case that these hereditaments were and are in fact owned and occupied as part of the dock undertaking. But I feel no doubt that, although that matter of fact is not without its significance, yet it would not he right to suppose that the parties had deliberately entered into such an agreement as made the argument in this Court really impossible: in other words, I think it was the intention of both parties that the question put forward on behalf of the Valuation Officer, which is a question of some significance and some novelty, should be adjudicated upon in this Court.
The question may, I think, be put quite briefly somewhat in the manner that Mr Browne formulated it in the course of hip reply. He said that it is fundamental to all rating law that what you have to do is to take any individual hereditament and value it upon the footing of what it would command to prospective tenants in the market, We said that in this case there was no doubt that the offices in question were offices which would command, in a competitive commercial market, a rent easily capable of ascertainment: in other words, as offices they could not be said to be only of value to a dock undertaking occupying them as part of such an undertaking. "Therefore", said the Appellant here, "you should adopt what the statute says is the basis upon which you should rate". Speaking for myself, I see the force of that contention, and if this matter had come before the Court half a century ago it may well be that it would be a contention to which we should, or could, have acceded. But, in my Judgment, during the course of the last half century at any rate, there has grown up a method of proceeding in regard to public utility undertakings which is sometimes referred to as the profits basis of valuation, which I think makes it impossible for this Court to accept the contention put forward by the Valuation Officer and impossible for us to say that you can segregate these offices, rate thorn by application of the ordinary principles of section 22 of the Act of 1925, and at the came time quoad the restof the undertaking, or indeed quoad the undertaking as a whole, concede the propriety of the profits basis of valuation.
A number of oases has been referred to in the course of the argument, but I should like to adopt and make the premise of my Judgment what was stated by my brother Jenkins in the last of the cases which came before this Court, namely, Metropolitan Water Board v. Hertford Corporation. I have the report of it in volume 1 of the All England Law Reports for 1953, at page 1047. At page 1056 my brother said: "But if the 'profits basis' is to be applied it follows that the net annual values attributed to all the hereditaments (directly or indirectly productive) must not exceed the cumulo value, and it follows, further, that, in order to achieve this end consistently with a fair apportionment of the cumulo value amongst the hereditaments in the several rating areas, and, in particular, with the attribution of a fair proportion of it to the indirectly productive hereditament here in question, an aggrogate net annual value must be placed on all the indirectly productive hereditaments in the undertaking, and a fair proportion of that net annual value must be attributed to this hereditament". It is fundamental to that proposition that you take the indirectly productive hereditaments together, arrive at a net annual value for them as a totality, and then proceed to apportion that total valuation among the individual units: in other words, if that proposition is sound, as I think myself on the authorities as I understand them it in, then it is a negation of the proposition that you oan, while applying the cumulo principle, the profits basis principle, to the undertaking as a whole segregate individual items of assets (whether they are productive or unproductive hereditaments) and proceed to value those items distinctly and without any apportionment to them of the total profits basis valuation. It need hardly be said that if such picking out, such selective segregation, were allowable considerable practical difficulties might be encountered in theprocess of selection, arithmetically it seems also fairly clear that you would certainly fail to achieve an between parish and parish a fair apportionment of the burden if it in to be assumed that all parts of an undertaking, treated as a whole, ought to bear a proper part of the total liability to rates, particularly since many parts of an undertaking, ouch as a water undertaking or a dock undertaking, are of a nature which in...
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British Transport Commission v Hingley
...departure". 24 That passage was followed with approval by this Court in ( Clayton v. The British Transport Commission 1955, volume 2 All England Law Reports, page 274). The latter case does not boar on the present problem since it deals with the attempted excision of certain profitable here......