Decision Nº RA 1 2013. Upper Tribunal (Lands Chamber), 07-04-2014
| Jurisdiction | UK Non-devolved |
| Judge | His Honour Judge Mole QC |
| Date | 07 April 2014 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | RA 1 2013 |
|
UPPER TRIBUNAL (LANDS CHAMBER)
|
|
|
UT Neutral citation number: [2014] UKUT 0159 (LC)
UTLC Case Number: RA/1/2013
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
RATING – Agricultural exemption –Local Government Finance Act 1988, s.51, Schedule 5, paragraph 1 – paragraph 2 (1)(d), meaning of agricultural land – whether hereditament consisting of buildings ‘anything which consists of a market garden, nursery ground’ - paragraph 3(b), meaning of agricultural building – whether hereditament ‘is or forms part of a market garden’ – appeal succeeds
IN THE MATTER OF AN APPEAL FROM A DECISION OF THE VALUATION TRIBUNAL FOR ENGLAND DATED 11 DECEMBER 2012
BETWEEN MR J. REEVES (VALUATION OFFICER) Appellantand
TUNNEL TECH LIMITED Respondent
re: Land at The Old Airfield, Winchester Street, Leckford, Stockbridge, Hampshire, SO20 6DD.
Before: HH David Mole QC (sitting as a Deputy Judge of the Upper Tribunal)
Sitting at: 43-45 Bedford Square, London WC1B 3AS
on
10-11 March 2014
Sarabjit Singh instructed by the solicitor to HMRC, for the appellant VO
Gordon Nardell QC and James Burton, instructed by Michelmores LLP, solicitors of Exeter EX2 5WR, for the respondent
The following cases are referred to in this decision:
Purser v the Local Board of Health for the District of Worthing (1877) XVIII QBD 818
Smith v Richmond (Inspector of Taxes) [1899] AC 448
Gilmore v Baker-Carr [1962] 1 WLR, 1165
Grewar v Moncur's Curator Bonis [1916] SC 764
Watters v Hunter [1927] SC 310
Twygen v Assessor for Tayside Region [1991] SC 98
Darlington & Sons v Langridge (VO) [1973] RA 207
Johnson (VO) v H B Foods Ltd [2013] UKUT 0539 (LC)
-
This is an appeal against the decision dated 11 December 2012 of the Valuation Tribunal for England. The appeal arose in the following way. The appeal hereditament, at The Old Airfield, Leckford, Hampshire, is and was at all material times occupied by Tunnel Tech Ltd (TTL). Since about 2007 the hereditament has been the subject of a number of proposals. Those appeals related, in part, to the rateable value of the premises and in part to the issue of the principle of rateability, it being argued on behalf of the occupier that the hereditament was entitled to agricultural exemption. Seven appeals that raised the issue of exemption were determined by the Valuation Tribunal. The first five of those appeals relate to the 2005 valuation list and the sixth and seventh to the 2010 list but nothing in this appeal turns on the different dates. (The proposals or appeals on rateable value remain outstanding but are not the concern of this appeal.) The President of the Valuation Tribunal (Professor Zellick QC) concluded that the premises qualified for exemption as constituting a market garden within the meaning of paragraphs 2 (1) (d) and 3 (b) of Schedule 5 to the Local Government Finance Act 1988. The Valuation Officer appealed to this Tribunal against that decision. TTL is the respondent to the appeal.
-
The parties produced statements of agreed facts and issues from which, together with the evidence and the assistance received from counsels’ skeleton arguments and closing submissions, and my accompanied inspection of the hereditament on 13th March 2014, I find the following facts.
-
The hereditament is 10 ha of land, including a reservoir, buildings, hard standings, plant and other structures. It stands in the countryside on the edge of a former airfield about 7 miles to the south east of Andover. TTL has occupied the hereditament by virtue of a lease from John Lewis Properties since 1985, in which time the hereditament has more than doubled in area, a reservoir has been constructed, and buildings have been added, taken away, or put to a slightly different use as production techniques have been developed and refined. The largest structure on the site at the date of my inspection was the Phase II/III building which came into use in November 2010. It contains nine insulated tunnels, a filling hall and an emptying and dispatch hall, enabling a high degree of atmospheric control of the building and automation of the processes. (A careful description of all the buildings plant and machinery and their relevant dates is included in the statement of agreed facts as part 2. There is also a full account of the rating history in part 4. As none of it has any significant bearing on the issue I have to decide, I do not refer to it further.) TTL is a subsidiary company of Monaghan Mushrooms Ltd.
-
The nature and legal classification of the final product that is sold from TTL is of crucial importance, so I shall describe the processes in a little detail. (The words I shall use to describe these processes are my own and do not carry any technical significance. I make this clear because I intend to avoid the unhelpful style found in the statement of facts in sentences such as "Phase III refers to the{mushroom produce}
fully {propagated} with mushroom mycelium." -
The process is described in three phases. Phase I begins when TTL buys local organic wheat straw, deep litter poultry manure and agricultural gypsum from various different sources. The straw is thoroughly wetted and after 2 to 4 days it starts to heat up through microbial action. Poultry manure, more water and agricultural gypsum are then blended with the warm wet straw and over several days the mixture is turned and moved. The microbial action breaks down the cellulose and lignin within the straw and the mixture becomes a homogenous material with a high moisture content. That material then undergoes high temperature fermentation. Until 2006 this was done in the "Phase I Open Side Building", thereafter the material has been put into fermentation bunkers, which have a concrete floor that allows air to be forced through into the material above in a measured way that enables temperature and oxygen concentration to be controlled to produce an efficient high temperature fermentation. The end result is to produce a rich, dark compost that will, with further treatment, provide a nutritious material for the growth of mushroom mycelium.
-
The material is then pasteurised. This process was originally carried out in polytunnels but, since November 2010, it has almost all been transferred to the new Phase II/III building. The temperature of the material is allowed to rise, initially to about 49°C, followed by a rise to 57°C for about 10 hours and then cooling to 48°C for 3 to 4 days of conditioning. At the end of this process any free gaseous ammonia has been metabolised and unwanted animal pests and weed moulds eliminated. The material is then allowed to cool until it reaches 24°C when it is ready for Phase II.
-
In Phase II the material is taken by conveyor belt into a sterile area where mushroom spawn is applied to it from a hopper at a carefully measured rate. The spawn is mushroom mycelium grown through sterilised wheat or rye grain produced in laboratory conditions. TTL buys this spawn from two specialised sources, Amycel or Sylvan. The spawn is alive but kept dormant by refrigeration to 2°C. Contact with the warm material activates the spawn which starts to grow through it. From 2005 to 2013 a proportion of material was sold at the Phase II stage. This proportion was 63% of total output at 1 April 2005 and down to 0% by 1 February 2013.
-
In the course of Phase III, by careful control of temperature, the mycelium is encouraged to complete its growth throughout the material. Before 2010 this stage was undertaken in the polytunnels, now it is done in the purpose-built tunnels in the Phase II/III building. By the end of 18 to 20 days the mycelium pervades the material and is visible as a mass of white tendrils. At that point it is winched out of the tunnel, broken up mechanically and conveyed to the vehicles that take it away. The process of breaking it up breaks the mycelial strands and triggers a reaction known as "reanastamosis", which is a surge in activity as the strands seek to rejoin, causing a peak in temperature shortly after the final material leaves the hereditament.
-
The final material is then taken to specialist mushroom farms. There it is covered with a layer of inert material, known as the casing layer, and the mycelium produces "pinheads" which become mature mushroom caps. The total time...
To continue reading
Request your trial