Decision Nº RA 49 2008. Upper Tribunal (Lands Chamber), 12-03-2010
| Jurisdiction | UK Non-devolved |
| Judge | Mr Andrew J Trott FRICS |
| Date | 12 March 2010 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | RA 49 2008 |
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UPPER TRIBUNAL (LANDS CHAMBER) |
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UT Neutral citation number: [2009] UKUT 296 (LC)
LT Case Number: RA/49/2008
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
Rating – costs – reasonable period for acceptance of sealed offer – whether sealed offer should refer to costs – assessment of costs where sealed offer accepted after substantive hearing
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE
CENTRAL LONDON VALUATION TRIBUNAL
BETWEEN SELFRIDGES LIMITED Appellant
(Valuation Officer)
Re: Selfridges
398-454 Oxford Street
London
W1C 1JS
Before: AJ Trott FRICS
Sitting at:
On 9-13 November 2009
David Holgate QC and Timothy Morshead, instructed by Herbert Smith LLP, for the appellant
Timothy Mould QC and Daniel Kolinsky, instructed by the Solicitor’s Office, HM Revenue & Customs, for the respondent
The following cases are referred to in this decision:
Shevlin v Trafford Park Development Corporation [1998] 1 EGLR 155
Tague v Lancaster City Council [1999] 2 EGLR 103
Tollgate Hotels Limited v Secretary of State for Transport [2006] RVR 315
Chapter Group plc v London Regional Transport [2006] RVR 242
Colour Quest Limited v Total Downstream UK plc [2009] EWHC 823 (Comm)
Stanford Marsh Ltd v Secretary of State for the Environment [1997] 1 EGLR 178
Purfleet Farms Limited v Secretary of State for Transport, Local Government and the Regions [2002] RVR 368
Harrods Limited v Baker (VO) [2007] RA 247
Commissioner of Valuation v Jamaica Gypsum Ltd (1971) 17 RRC 4
Austin Motor Co Ltd v Woodward (VO) (1970) 16 RRC 1
John Walsh Ltd v Elliott (VO) (1972) 17 RRC 58
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This is an appeal by Selfridges Limited against a decision of the Central London Valuation Tribunal dated 1 July 2008 confirming the assessment in the 2000 local non-domestic rating list of the shop and premises known as Selfridges (excluding 5th floor, 40 Duke Street), London W1C 1JS at a rateable value of £15,500,000. The effective date is 1 April 2004.
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The appeal was heard from 9 to 13 November 2009. At the hearing the appellant argued for a rateable value of £11,060,000 and the respondent for a rateable value of £15,250,000. After the hearing had finished, but before the parties had produced their written closing submissions, the appellant accepted an offer on 17 November 2009 to settle the rateable value in the sum of £14,000,000. That offer was made by the respondent “without prejudice save as to costs” on 8 October 2009 and formed a sealed offer lodged with the Tribunal on that date in accordance with rule 44 of the Lands Tribunal Rules 1996 (as amended). While the substantive issue in the appeal has now been settled by agreement the parties did not agree the costs of the appeal, over which the Tribunal retains jurisdiction. This decision is therefore limited to the determination of those costs about which the final written submissions were received on 8 January 2010.
Chronology
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A chronology of the relevant correspondence is set out below. Except where otherwise stated all the correspondence was marked “without prejudice save as to costs”.
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8 October 2009
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The respondent made an offer to agree the rateable value in the sum of £14 million. The offer was unconditional in point of time and was said to be made on the “Calderbank” basis. It did not refer to costs and gave no breakdown of the offer figure.
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9 October 2009
The appellant replied that it needed time to consider and respond to the offer. It anticipated that it would be able to do so by 15 October 2009 provided it received further information by 5 pm on 13 October 2009 about the breakdown of the £14 million (including details of the basic rate and adjustments) and the respondent’s position on costs.
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13 October 2009
The respondent provided the following breakdown of the offer:
Basic price at £142.50 per sq m £14,584,733
Additions:
Car park £ 850,000
Petrol station £ 10,000
Less:
External maintenance costs £ (346,682)
Internal costs £ (458,386)
Exceptional running costs £ (446,615)
Listing costs £ (192,500)
Total £14,000,550
Rateable value, say £14,000,000
The offer was said to be “unconditional as to costs”.
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15 October 2009 (appellant’s first letter)
The appellant said that the breakdown of the offer would need to be considered by its expert valuer, Mr How, who was unavailable until 20 October 2009. It also wanted its other experts to consider the proposed adjustments, although it expressed the hope that the figure for external maintenance costs could be agreed. It repeated its request for the respondent to clarify his position on costs saying “we consider that your client’s offer is not yet fully effective as a Calderbank offer”. The appellant said that the respondent should pay its costs up to, and including, the time of any acceptance of the offer.
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15 October 2009
The respondent expressed surprise that the appellant was not able to respond to the offer by 15 October as originally stated in its letter dated 9 October. He challenged the appellant’s position on costs and said that the Tribunal retained jurisdiction over costs, the purpose of a Calderbank offer being to enable the substantive issues to be agreed without the distraction of “consequential issues such as costs”. He did not understand why the appellant’s experts needed to consider the allowances since the offer was put at a level that favoured the appellant on these issues.
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15 October 2009 (appellant’s second letter)
The appellant argued that the offer’s failure to deal with costs was incompatible with the long established guidance of the Tribunal in cases such as Shevlin v Trafford Park Development Corporation [1998] 1 EGLR 155 and Tague v Lancaster City Council [1999] 2 EGLR 103. The offer had been made late in the proceedings at a time when it was probable that the large majority of the appellant’s costs had been incurred. It was therefore unrealistic to put forward an offer that did not address costs.
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16 October 2009
The respondent repeated that he had made a valid and genuine Calderbank offer. He accepted that the appeal had succeeded and that if the offer was accepted an award of costs in favour of the appellant should follow, but the respondent did not concede that such an award should be 100% of the appellant’s taxable costs. He said:
“Our present analysis suggests that an award of 50% of your client’s taxable costs would be appropriate. We are instructed to give you an assurance that in the event that your client accepted the Calderbank offer, our client would not advance any submissions to the effect that a lower award than this should be made.
Therefore, the room for debate as to the ultimate costs award/agreement is limited to determining where on the spectrum of a full award of taxable costs to a 50% award of taxable costs in your client’s favour, an award should be made”.
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20 October 2009
Redacted letter from the appellant marked “without prejudice” containing an offer (details unknown because the correspondence was privileged).
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21 October 2009 (first letter)
Redacted letter from the respondent marked “without prejudice” in response to the appellant’s offer (details unknown because the correspondence was privileged).
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21 October 2009 (second letter)
The respondent confirmed that its offer dated 8 October 2009 remained open for acceptance.
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17 November 2009
Appellant accepted the respondent’s offer “to settle the proceedings”. It noted that costs were to be the subject of separate discussion but expected a substantial costs award in its favour.
Lands Tribunal Interim Practice Directions and Guidance
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The Interim Practice Directions and Guidance were issued on 13 May 2009. They deal with costs in paragraph 23 and, insofar as relevant...
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