Dawn Bunyan (Listing Officer) v Laxmi Patel
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Lang |
| Judgment Date | 16 May 2022 |
| Neutral Citation | [2022] EWHC 1143 (Admin) |
| Docket Number | Case No: CO/3599/2021 |
| Year | 2022 |
| Court | Queen's Bench Division (Administrative Court) |
[2022] EWHC 1143 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Lang DBE
Case No: CO/3599/2021
Isabel McArdle (instructed by HMRC Solicitor's Office and Legal Services) for the Appellant
The Respondent did not appear and was not represented
Hearing date: 28 April 2022
Approved Judgment
This is a statutory appeal against a decision of the Valuation Tribunal for England (“the Tribunal”), dated 17 September 2021, which allowed an appeal by the property owner (Mrs Patel) against the decision of the Valuation Office Agency Listing Officer (“the Listing Officer”), dated 18 August 2020, and deleted the entry in the council tax valuation list for the appeal property, 17 Mill Ridge, Edgware, HA8 7PE (“the Property”).
The issue in the appeal before the Tribunal was whether the Property still constituted a dwelling, for the purposes of section 3 of the Local Government Finance Act 1992 (“the LGFA 1992”), on 28 August 2019 (“the relevant date”). The Tribunal found that the Property was not capable of beneficial occupation at the relevant date because it required major works to remedy rising damp, and so a hereditament did not exist.
The Listing Officer appeals to the High Court, pursuant to regulation 43 of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009, on the ground that the Tribunal applied an incorrect legal test and thus fell into a material error. The Listing Officer contends that, had the error not been committed, the Tribunal would have dismissed the appeal.
The right of appeal from the Tribunal to the High Court under regulation 43 of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009 is on a question of law only. By paragraph 4, the High Court may confirm, vary, set aside, remove or remit the decision or order, and may make any order the Tribunal could have made.
The Respondent has taken no part in the proceedings, to avoid incurring legal costs.
Factual background
The Property is a 3 bedroom semi-detached house which was constructed in the 1930's. It has a gross external area of 103 sqm. It entered the council tax valuation list as a band E dwelling on 1 April 1993.
The Respondent let the Property to tenants from a date unknown until 27 August 2019 when they were evicted from the Property.
On 22 July 2020, the Respondent applied to the Valuation Office Agency to delete the Property from the council tax valuation list with effect from 28 August 2019, when the Property became unoccupied.
The basis of her application was that the Property was uninhabitable because of rising damp caused by the intrusion of weather. She relied upon a survey report by Rentokil, with photographs, dated 15 October 2019. The key points in the survey were as follows:
i) Properties of this age should have an original damp proof course in the form of slate on mortar bed or bitumen layer, some 6 to 7 inches below floor level. It was not visible on inspection. The external ground level may be bridging the existing damp proof course.
ii) A horizontal damp proofing system should be installed.
iii) Meter readings indicated rising damp in the ground floor walls and floors.
iv) The ground floor wall plaster was contaminated with salts due to moisture and needed to be removed and replaced with salt and moisture resistant plaster.
v) The ground floor skirting boards were at risk of attack by fungi due to their moisture content, although there were no visible signs of fungal decay.
vi) Skirting boards were to be removed from treated walls, and replaced or repaired as necessary.
vii) There was evidence of plaster fungus growing from the wall/floor joint near the rear doors, indicative of a plumbing leak, probably from the radiator pipe.
viii) On the first floor, in the rear left corner of the rear room, there was evidence of penetrating damp caused by historic rainwater ingress. The plaster was contaminated with salts due to moisture and needed to be removed and replaced with salt and moisture resistant plaster.
ix) The estimate for the works was £5,032.81.
On 18 August 2020, Mr Andrew Corkish MRICS, Listing Officer at the Valuation Office Agency, sent a decision notice rejecting the Respondent's application to delete the entry for the Property. The Supporting Information Document stated:
“Properties can only be deleted from the council tax list under very limited circumstances. For a property to be deleted I must be satisfied that it is sufficiently derelict to no longer be capable of beneficial occupation and has reached a stage where it is beyond the scope of reasonable or normal repair. It is only where the extent of disrepair is so severe that it would not be reasonable to put the property in an appropriate state of repair for its age, character and location, that a property might be considered derelict.
Simply put, a property is only considered uninhabitable for Council Tax purposes when it has deteriorated to the point when it is incapable of being made habitable again without large scale works, often including substantial structural repairs. A property in this condition is described as being “beyond reasonable repair”. A property may be in poor condition or require modernisation works to bring it to modern standards but this would not be considered sufficient for it to be deleted from the Council Tax list. Please note, I cannot take into account whether the property is vacant, or the cost of repairs, I can only consider the current state of the property, and the works required to repair it.
While the evidence you have provided shows that the property has damp damage, I do not consider that it to be beyond reasonable repair. The works required to repair the property consist of strip-out, dry-out and refurbishment works. Such works are not considered substantial to warrant a deletion from the council tax list. Furthermore, there is no evidence to show that any structural works are required. Due to this, for council tax purposes, the property remains within reasonable repair, I therefore cannot agree to delete it from the Council Tax list.”
The Respondent submitted an appeal against this decision to the Tribunal on 20 August 2020.
The Respondent commenced works at the Property on 23 September 2020. More extensive damp problems came to light after the works began. In a further report dated 15 November 2020, based on a survey on 10 November 2020, Rentokil advised that there was evidence of plaster contamination with salts to the walls in the kitchen. The units needed to be removed, and the plaster replaced with specialist rendering, at an additional cost of £1,746.49.
Subsequently the Respondent explained in an email to the Valuation Office Agency, dated 9 February 2021, that a “complete renovation is taking place starting with new wiring, new walls and ceilings. It is currently a building site ….”. Photographs taken in January 2021 showed the Property stripped back to bare brickwork. The Respondent also provided a copy of an agreement with a developer to remove and replace the ceilings, floors, skirtings, doors, kitchen and bathroom, at a cost of £25,000.
In the light of this extensive re-development of the Property, the Valuation Office Agency reviewed the Respondent's application to delete the entry and concluded that the Property was no longer capable of beneficial occupation once the works commenced on 23 September 2020.
The Tribunal's decision
Following a remote hearing on 10 September 2021, the Tribunal (Mr A. V. Clark (Vice-President)) issued its Notice of Decision on 17 September 2021. After summarising the legal framework and the evidence, the Tribunal concluded as follows:
“22. In reaching my decision on whether or not a hereditament existed at the relevant date, I had regard to the evidence provided by the Appellant. Whilst there were no photographs of the subject property at the relevant date of 28 August 2019, the photographs contained in the survey conducted on 7 October 2019 clearly showed fungus visible to the naked eye present within the property. Mr Patel confirmed that the water ingress had happened some time before the occupants vacated and the property's condition was deteriorating over time. He contended that, once the issues were identified, the property would be no longer fit for habitation until substantial works had been carried out. Mr Cromwell cited Wilson v Coll and argued that the property was capable of reasonable repair until the works began in September 2020.
23. The President's decision in Tewari v Virk [2020] (appeal M0826076) highlighted the danger in relying on the Wilson v Coll case, when legislation had changed since that 2011 decision. When that High Court judgment was made, taxpayers had the opportunity to claim a Class A exemption for dwellings that were in need of major repair works to render them capable of occupation. That exemption was abolished from 1 April 2013. In the Tewari case, the President stated, with regard to applying the statutory assumptions to a property in need of works to make it habitable, –
‘Such a robust approach without giving proper consideration to whether a property is capable of occupation at the relevant date or whether it is reasonable for the owner to undertake such works to render it habitable is flawed, and fails to appreciate the reality of the situation, with respect in my opinion that approach is wrong’.
24. Whilst a VTE decision is not binding on me in this case, I was inclined to agree with the President's comments. A representative for the LO had not inspected the property when the proposal was made in July 2020, before the works began, so I...
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