John Reeves (Valuation Officer) v Valuation Tribunal for England Tull Properties and Another (Interested Parties)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Holgate |
| Judgment Date | 05 March 2015 |
| Neutral Citation | [2015] EWHC 973 (Admin) |
| Date | 05 March 2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/0046/2014 |
[2015] EWHC 973 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Holgate
CO/0046/2014
Mr Guy Williams (instructed by HMRC Solicitors) appeared on behalf of the Claimant
The Defendant did not appear and was not represented
The Interested Parties did not appear and were not represented
The Claimant is the valuation officer for the area of South Gloucestershire Council ("the Council") under section 41 of the Local Government Finance Act 1988. He is responsible for compiling the non-domestic rating list for that area. It is by reference to the list that business rates are levied by the Council as the billing authority on rateable units of property within its area, referred to as "hereditaments".
The first interested party, Tull Properties Limited, is the owner of Beluga House, Whale Wharf, Littleton-upon-Severn, Bristol. The property was built in the 1980s. It was entered in the 2000 rating list, but deleted in 2003 after having been vandalised.
A new list was compiled on 1 April 2005 and was to last until 31 March 2010.
In 2007 the valuation officer entered Beluga House in that list. Subsequently he agreed to delete that entry on the grounds that it was incapable of being beneficially occupied and therefore did not constitute a hereditament for the purposes of the 1988 list. That was because works were then carried out to the property with a view to bringing it back into use.
The rating of new buildings
The general legal principle is that a building in the course of construction is treated as not constituting a hereditament for rating purposes because it cannot be occupied for its intended purpose ( Arbuckle Smith & Co Limited v Greenock Corporation [1960] AC 813). The same principle may also apply where a building cannot be occupied while it is being modified so that it may be used for a new purpose. But where a newly constructed or altered building becomes capable of occupation for its intended purpose, it is then treated as a hereditament which may be entered in the rating list ( Porter (Valuation officer) v Trustees of Gladman Sipps [2011] RA 337, paragraph 41).
These principles are supplemented by the completion notice code contained in section 46A and Schedule 4A of the 1988 Act. Two types of notice may be served. First, where a billing authority is of the view that a new building can reasonably be expected to be completed within three months, the authority is to serve a completion notice on the owner of the building as soon as reasonably practicable (Schedule 4A, paragraph 1(1)). The notice must specify the completion day proposed by the authority (paragraph 2(1)), being no later than 3 months from the date of service.
The second type of notice covers a situation where the billing authority considers that a new building has already been completed (paragraph 1(2)), in which case the completion date in the notice must be the date upon which it is served (paragraph 2(3)).
In either case, if the owner does not agree with the completion date specified in the notice he may appeal to the Valuation Tribunal for England ("VTE") under paragraph 4(1). The only ground of appeal under that provision is that the building to which the notice relates has not been, or cannot reasonably be expected to be, completed by the date stated in the notice.
In effect, Schedule 4A contains provisions for determining the date on which the new building is deemed to be completed. Under paragraph 3 an agreement may be made between the owner and the billing authority as to the completion date, in which case the completion notice is treated as having been withdrawn. Under paragraph 5 if no appeal is made against the completion notice, and no agreement reached under paragraph 3, the completion date is taken to be the date stated in the notice. But where an appeal is made the completion date is the date determined by the Tribunal (paragraph 4(2)).
Where an appeal against a completion notice is made, the only question which the Tribunal is asked by Schedule 4A to answer is: what is the completion date?
Paragraph 7 requires the billing authority to supply to the valuation officer a copy of any completion notice served by it and to notify the valuation officer if the notice is withdrawn, or if a paragraph 3 agreement is reached. Schedule 4A makes no provision for the valuation officer to be a party to, or to take part in, the appeal.
The effect of section 46A(2) and (3) of the 1998 Act is that where the building to which a completion notice relates is not completed by the completion day given by Schedule 4A (which in the absence of an agreement between the owner and the authority will be either the date determined by the Tribunal or the date of the notice), then the building is deemed to have been completed on that day for the purposes of section 42 of the Act. Thus, under the completion notice code a new building may be entered in the rating list as a hereditament from that deemed completion date. But the procedure under this code is only available in relation to "a new building".
Section 46A(6) extends the notion of a new building to include a building produced by the structural alteration of an existing building where that building is comprised in a hereditament, which, by virtue of the alteration, becomes, or becomes part of, a different hereditament.
I have said that the completion notice code supplements the general law summarised in Porter because, even where a completion notice is not served, a new building can be entered by the valuation officer in the list, using his power to alter the list directly, when he judges that building to be capable of occupation ( seeAviva Investors Property Developments Ltd v Whitby [2013] UKUT 0430 (LC) at paragraphs 21 to 27). Likewise if it should be decided that a completion notice was ineffective, for example, because of a failure to serve the notice correctly, or invalid because it does not relate to a new building within section 46A(6), the valuation officer is not deprived of his usual powers to enter a new or altered building in the rating list when he considers it to be capable of occupation and thus rateable. A decision that a completion notice is invalid simply means that the building in question cannot be rated on the basis of the deeming provisions in section 46A and Schedule 4A of the 1988 Act.
Current proceedings
In this case the Council served a completion notice in respect of Beluga House, on 14 August 2008, with a completion date of 20 August. As a result of that notice the valuation officer re-entered the property in the 2005 rating list with effect from 20 August.
Tull Properties appealed against the completion notice to the VTE. The parties before the Tribunal were the Council and Tull Properties. The hearing took place on 22 July 2013 and the Tribunal issued its decision on 7 October 2013. It appears from paragraph 1 of the decision that both parties invited the Tribunal to consider, as a preliminary issue, whether the completion notice was valid. The Tribunal decided that it was invalid because the alterations in question had not resulted in a new building (see paragraphs 26 to 28).
The Tribunal received written submissions as to the effect of its decision and the order that should be made. It decided to make the following order:
"The appeal is allowed, the completion notice is declared invalid and therefore quashed and the subject hereditament is to be deleted from the 2005 rating list."
The Court has been told that in this case the ratepayer did not make, as it could have done, a statutory proposal challenging the inclusion of Beluga House in the list. The time limit for making such a proposal in relation to the 2005 list expired on 1 April 2010.
In this claim for judicial review, brought with the permission of Collins J granted on 8 October 2014, the valuation officer contends that the Tribunal had no power to order the deletion of the hereditament, Beluga House, from the rating list.
As is usual in cases of this kind the Tribunal has not appeared before the Court. Although Tull Properties was represented before the VTE by leading counsel specialising in this area, it has chosen not to be represented in these proceedings or to make any submissions. Accordingly the court is grateful to Mr Guy Williams, who appeared on behalf of the valuation officer, not only for his clear and helpful submissions but for his answers to a number of questions from the bench.
In paragraph 7 of the skeleton for the valuation officer it is accepted that the VTE had jurisdiction to determine the validity of the completion notice. It is also made plain that the valuation officer does not raise any arguments as to whether the Tribunal's decision in this case on the invalidity of the notice was legally correct. The only challenge made is to the order requiring the 2005 list to be altered by deleting Beluga House, which the Tribunal decided should be the consequence of its decision that the notice was invalid.
Whether invalidity of a completion notice may be challenged under Schedule 4A
I note that in UKI (Kingsway) Ltd v Westminster City Council [2014] RA 367 the billing authority submitted that paragraph 4 of Schedule 4A limits the issue, which may be determined by the VTE on an appeal in...
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