Decision Nº RA 19 2010. Upper Tribunal (Lands Chamber), 12-01-2012
| Jurisdiction | UK Non-devolved |
| Judge | His Honour Judge Mole QC |
| Date | 12 January 2012 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | RA 19 2010 |
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UPPER TRIBUNAL (LANDS CHAMBER) |
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UT Neutral citation number: [2012] UKUT 5 (LC)
UTLC Case Number: RA/19/2010
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
RATING – valuation – contractor’s basis – value of occupation to hypothetical tenant – public conveniences – appeal allowed
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE
VALUATION TRIBUNAL FOR ENGLAND
BY
(Valuation Officer)
Re: Public Conveniences near 55 High Street
Steyning,
West Sussex,
BN44 3RE
Before: His Honour Judge David Mole QC
Sitting at 43-45 Bedford Square, London, WC1B 3AS
on 7 December 2011
Timothy Morshead QC for the Valuation Officer
The Respondent was not represented
The following cases are referred to in this decision:
Erith Borough Council v Draper (VO) [1952] 45 R &ITR 315
Poplar Assessment Committee v Roberts [1992] 2AC 93
Allen v English Sports Council [2009] RA 289
John Laing & Son v Kingswood Assessment Committee [1949] IKB 344
LCC v Wilkins [1957] AC 362
Orange PCS v Bradford [2004] EWCA Civ 155; [2004] 2 All ER 651
Poplar Metropolitan Borough Assessment Committee v Roberts [1992] 2 AC 93
Dawkins (VO) v Ash Bros & Heaton [1969] 2 AC 366
Robinson Brothers (Brewers) Ltd v Houghton and Chester Le-Street Assessment Committee [1937] 2 KB 445
Roxburghe Estates v Scottish Borders Council Assessor [2004] RA 15
Hodgkinson (VO) v Strathclyde Regional Council Superannuation Fund [1996] RA 129
DECISION
Introduction
1. This case is about three public lavatories at 55, High Street, Steyning, West Sussex. They are part of a building consisting of a large brick-built covered bus shelter, the three lavatories in question and a store, at the entrance to the Council car park in the centre of Steyning, a small town approximately 5 miles north of Worthing.
2. The Horsham District Council (hereafter 'the HDC') has a power, but not a duty, to provide public conveniences within its area. It was decided after consultation with the Steyning Parish Council (hereafter 'the PC') that the existing toilet and bus shelter should be refurbished. The cost of £75,000 was divided between the HDC and the PC. The existing male, female, and disabled toilet facilities were replaced with three unisex toilets. The lavatories are all designed for use by the disabled but only one of them is restricted to such use; the other two are available to the public in general. The refurbished building opened on 16 February 2009. The annual cost of maintenance is said to be around £10,000 per annum. The HDC, as owner, let the building to the PC for a peppercorn rent, which makes the building available for the convenience of the public.
3. The previous building had been entered into the 2005 rating list with a rateable value of £2750, with effect from the 1 April 2005. On 26 October 2000 the PC made a proposal on the basis that a material change of circumstances had occurred to the hereditament, because "it now incorporated three disabled public toilets and should be exempt."As this proposal was not withdrawn or resolved by agreement it went as an appeal to the Valuation Tribunal for England.
4. The VT rejected the argument that the appeal premises were exempt, noting that they were not wholly for disabled use. The VT also rejected the arguments firstly that the conveniences were not for the exclusive use of the PC because they were for use by the general public and secondly that the conveniences were simply ancillary to the car park. Then the VT turned to the question of the rateable value.
"28. It remained, therefore whether the rateable value at present in the Rating List was correct or whether it should be reduced to a nominal value as suggested by the appellant.
29. It was noted that the public conveniences in the decision of Hodgkinson (VO) v Strathclyde had been reduced to a rateable value of £1. Whilst the panel accepted the differences between the public conveniences in the shopping centre and the appeal premises, it took the view, as in that decision, that a hypothetical landlord would accept a nominal rent for the appeal premises to avoid the burden of continuing to maintain the conveniences.
30. The Panel concluded that the rating of public conveniences of this more modern type did not appear to take account of the high overheads. Whilst the Panel appreciated that one of the duties of the Council was to provide services, it was of the opinion that in this case there was no statutory duty incumbent on the Council to provide Public Conveniences. In those circumstances, the Panel did not consider that a hypothetical landlord would be prepared to spend £10,000 per year in maintenance for little or no return.
31. The appeal is, therefore, allowed."
Submissions
5. Mr Timothy Morshead QC submitted on behalf of the Valuation Officer that the VT's decision was wrong. Firstly it was inconsistent with the decision of the Lands Tribunal in Erith Borough Council v Draper (VO) [1952] 45 R&ITR 315. Secondly it wrongly simulated the negotiations which might take place on a hypothetical letting of the hereditament, on the false basis that the hypothetical landlord would be obliged to "spend £10,000 per year in maintenance for little or no return", unless he secured a letting. There was no basis for that assumption which, anyway, risked making the mistake of evaluating the premises to the hypothetical landlord rather than to the hypothetical tenant. That would be contrary to the principle in Poplar Assessment Committee v Roberts [1922] 2AC 93. Thirdly, it wrongly treated "high overheads" as a factor diminishing rateable value; in fact this factor is either neutral or inflationary of rateable value because a willingness to incur overheads in relation to a hereditament indicates that its occupation is of value to the occupier. The expenditure of £75,000 on refurbishing the lavatories cannot have had the effect of reducing their rateable value from the previous unchallenged value of £2,750 to £1. Mr Morshead drew my attention to the decision of the Lands Tribunal in Allen v English Sports Council [2009]RA 289, (see particularly the President at paragraph 77 (page 315)). Finally, the VT was wrong to rely on the decision of the Lands Tribunal in Hodgkinson (VO) v Strathclyde Regional Council Superannuation Fund [1996] RA 129. Whether or not this case was rightly decided, and Mr Morshead did not accept that it was, he submitted that it ought to be distinguished on its unusual facts.
6. In Mr Morshead's submission the rateable value of the hereditament should be determined in accordance with Mr Forbes' valuation and the list should be altered to show a rateable value for the hereditament of £600 with effect from 16 February 2009.
Valuation Evidence
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Mr Morshead called Mr Simon Forbes MRICS to give evidence on behalf of the Valuation Officer. Mr Forbes described the hereditament, its location, use and occupation and set out its rating history. He explained the rating principles that, in his view, applied to public conveniences. He acknowledged that the hereditament is incapable of being occupied for monetary profit, but that is not a requirement for rateable occupation. His view was that the Parish Council is in beneficial occupation of the hereditament. However he regarded the cubicle reserved exclusively for disabled persons as exempt under paragraph 16(1)(b) of Schedule 5 of the Local Government Finance Act 1988 and made an allowance for that in his valuation at stage five. He noted that the annual rent paid by the PC to the HDC is £1 but did not find that a useful indication of value. In the absence of any open market rents his view was that the Contractor's Basis was the appropriate valuation method. He applied the approach set out in the Rating Manual and Practice Note. At stage 1 he estimated the replacement cost of a modern substitute building as £21,062. From that, at stage 2, he deducted 19.5% for age and obsolescence and adjusted the replacement cost to £16,995. He then added 5% of the adjusted replacement cost as land value, giving £17,803. This he decapitalised at 5% to £890. Finally, at stage 5, he deducted 30% to take account of the disabled cubicle with poor access. His resulting valuation was £623, which he rounded to a rateable value of £600. Mr Forbes’ valuation was unchallenged.
Law
8. It is useful in the consideration of this matter...
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