Decision Nº RA 63 2008. Upper Tribunal (Lands Chamber), 20-05-2011
| Jurisdiction | UK Non-devolved |
| Judge | George Bartlett QC PresidentMr Norman J Rose FRICS |
| Date | 20 May 2011 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | RA 63 2008 |
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UPPER TRIBUNAL (LANDS CHAMBER) |
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UT Neutral citation number: [2011] UKUT 204 (LC)
UTLC Case Number: RA/63/2008
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
RATING – hereditament – newly erected office buildings – entered in rating list by VO – units lacking small power points and partitioning – whether rateable hereditaments to be entered in the list – held they were not – appeal dismissed – Local Government Finance Act 1988 s 42(1)
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE
GLOUCESTERSHIRE VALUATION TRIBUNAL
(Valuation Officer)
and
TRUSTEES OF GLADMAN SIPPS Respondent
Re: Units 1-12 and 14-20
Miller Court
Severn Drive
Tewkesbury
Gloucestershire
GL20 8DN
Before: President and N J Rose FRICS
Sitting at 43-45 Bedford Square, London, WC1B 3AS
on 28 March 2011
Galina Ward, instructed by HMRC solicitor for Appellant
Daniel Kolinsky, instructed by PricewaterhouseCoopers LLP by direct professional access, for the Respondent
The following cases are referred to in this decision:
R v Malden Overseers (1869) LR 4 QB 326
Watford Borough Council v Parcourt Property Investment Co Limited [1971] RA 97
Ravenseft Properties Ltd v Newham London Borough Council [1976] QB 464
Post Office v Nottingham City Council [1976] 1WLR 624
French Keir Property Investments Limited v Grice (VO) and Liverpool City Council [1985] RA 202
Spears Brothers v Rushmoor Borough Council [2006] RA 86
Arbuckle, Smith & Co Ltd v Greenock Corpn [1960] AC 813
The following cases were also cited:
London Merchant Securities PLC v Islington Borough Council 2 EGLR 168
Henderson v Liverpool Metropolitan District Council [1980] RA 238
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This appeal by the valuation officer, Mr Michael John Porter FRICS, against a decision of the Gloucestershire Valuation Tribunal, concerns nineteen speculatively built office premises, known as units 1 to 12 and 14 to 20 Miller Court, Severn Drive, Tewkesbury, Glos, GL20 8DN. Before any completion notice had been served in respect of any of the units the VO entered each of them in the rating list for the Borough of Tewkesbury with effect from 1 May 2006. The VT held that none of them satisfied the requirements necessary for inclusion in the list and directed the deletion of the entries.
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Ms Galina Ward of counsel appeared for the appellant, whom she called as an expert witness. Mr Daniel Kolinsky of counsel appeared for the respondent potential ratepayers, the Trustees of Gladman SIPPS. He called expert evidence from Mr Simon Tivey IRRV (Hons).
Facts
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In the light of an agreed statement of facts we find the following facts. Miller Court is situated approximately 1km north of junction 9 of the M5 motorway and about 3km east of Tewskesbury. The site was developed by Gladman Developments as a speculative office scheme in 2005 and 2006.
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The development comprises 20 units all of which, with one exception, form the subject of this appeal. They are of three different sizes, known respectively as G2K, G6K and G10K.
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Units 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14 and 20 are G2K units, with the following floor areas:
Ground floor: 97.40 m2
First Floor 119.30 m2
Total area 216.70 m2
Units 1, 16, 17 and 18 are G6K units, with the following floor areas:
Ground Floor 274.90 m2
First Floor 291.10 m2
Total area 566.00 m2
Units 15 and 19 are G10K units, with the following floor areas:
Ground Floor 304.70 m2
First Floor 314.80 m2
Second Floor 315.10 m2
934.60 m2
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At the material day, 1 May 2006, the appeal units were all unoccupied.
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All units have plastered walls, suspended ceilings with recessed fluorescent lighting and air conditioning cassettes installed in a grid layout. There are raised floors with voids below to accommodate wiring, pipes and fixtures. A stand-alone security alarm system has been fitted to the G2K units, but not the G6K and G10K units. Wcs are installed in all units.
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Tea points are installed on the ground floor of the G2K units. There are no tea points in the G6K and G10K units. Passenger lifts are installed in the G6K and G10K units but not in the G2K units. Power has been installed as far as the central core to each floor. There is one double power point on each floor within the office area close to the entrance. Small power, floor boxes and outlet sockets are not installed in the office areas.
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External doors and external double glazed windows are installed. In the G2K units an internal fire door is fitted between the core and the office area, on the ground floor only. In the G6K and G10K units a fire door is fitted on every floor.
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There is no full height partitioning in the office areas, nor data cabling for IT or telephone equipment. Car parking is available to each unit.
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Various costs have been agreed as at the antecedent valuation date, 1 April 2003. The agreed construction costs of each unit, including air conditioning, lighting, lifts, fully finished core and toilet areas are £207,667.52 (G2K), £506,737.33 (G6K) and £763,877.08 (G10K). These costs exclude the costs of any small power installation to the office areas. They include the provision of the necessary cabling etc to one point on the perimeter of each office area for the subsequent installation of these works.
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In terms of price per m2, the agreed construction costs of the units are £958.32 (G2K), £895.29 (G6K) and £817.33 (G10K).
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The cost of installing the small power system into the office areas has been agreed at £12.50 per m2, resulting in the following total costs for this item: £2,712.50 (G2K), £7,075.00 (G6K) and £11,687.50 (G10K). These costs are notional, on the basis that the developer does not do the work because each tenant’s requirement is different. In order to avoid abortive works they are left for the individual tenants to carry out themselves.
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The agreed cost of installing a tea point on each floor of the G6K and G10K units is £2,800 per point. The total costs for the tea points for the various units are therefore £5,600 (G6K) and £8,400 (G10K). This item is included in the agreed cost for G2K units.
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Available quotations for fitting out works by tenants in some of the units on the estate indicate that the cost of carrying out the tenant fit out works, including small power installation, additional air conditioning, internal partitions etc varied from just over £96 per m2 to nearly £210 per m2.
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All the appeal properties were entered in the rating list with effect from 1 May 2006 following a report from the billing authority, Tewkesbury Borough Council. The billing authority did not serve a completion notice. Units 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14 and 20 were each entered at RV £27,750, units 1, 16, 17 and 18 at RV £73,000 and units 15 and 19 at RV £120,000. Unit 21, the semi-detached unit adjoining No.20, was also part of the development. It is a G2K design. It was entered in the list with effect from 4 July 2006. That date was provided by the billing authority in a report to the VO.
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Effect was given to the VT’s decision by a list alteration, made by the VO on 26 November 2008, deleting the entries with effect from 1 May 2006. Various units were re-entered into the list by the VO, using dates provided by the billing authority in reports. The billing authority subsequently issued completion notices, giving a completion date of 11 March 2009. The VO then used that date to enter in the list the offices which, at that date, were still vacant.
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The values of the 19 appeal properties are not in issue. It is agreed that, should the Tribunal find that any or all of the units should appear in the rating list from 1 May 2006, they should be reinstated at the original RVs and from the original effective date.
The VT’s decision
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In its conclusions the VT said:
“The tribunal were mindful that the test for rateable occupation/ownership was reliant on the following four criteria, in this particular case, beneficial occupation was at issue in deciding whether there is a hereditament.
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actual possession
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exclusive occupation
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beneficial occupation
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occupation that is not too transient
The tribunal noted that the properties were advertised ‘vacant and to let’ in the state that they existed at the material...
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