UKI (Kingsway) Ltd v Westminster City Council
| Jurisdiction | England & Wales |
| Judge | Lady Justice Gloster,Lady Justice Macur,Lady Justice King |
| Judgment Date | 15 June 2017 |
| Neutral Citation | [2017] EWCA Civ 430 |
| Docket Number | Case No: C3/2015/3523 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 June 2017 |
[2017] EWCA Civ 430
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (LANDS CHAMBER)
Martin Rodger QC, Deputy President
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Gloster
Vice President of the Court of Appeal, Civil Division
Lady Justice Macur
and
Lady Justice King
Case No: C3/2015/3523
Daniel Kolinsky Esq QC (instructed by Ms Sally Lloyd, In-house Solicitor, River Island Clothing Co. Limited) for the appellant
Sebastian Kokelaar Esq (instructed by the Director of Law, Tri-Borough Shared Legal Services) for the respondent
Hearing dates: 24 January 2017
Approved Judgment
Introduction
This appeal concerns the formal validity and service of a completion notice under Schedule 4A of the Local Government Finance Act 1988 ("the 1998 Act") delivered by the respondent, Westminster City Council ("the respondent" or "the billing authority"), on 5 March 2012 in respect of premises on the 3rd-6th floors of a building at 1 Kingsway, London WC2 ("the premises"). The completion notice purported to bring the premises into the 2010 rating list with effect from 1 June 2012.
The appeal raises a point of practical importance regarding the serving of completion notices and as to the general approach to the construction of statutory schemes which require notification to be given but do not provide a prescriptive and exhaustive code as to how to do so.
Factual background
The factual background is set out in the judgment of the Upper Tribunal (Lands Chamber) ("the UT") [2015] UKUT 0301 (LC) RA/29/2014 at [4] – [16] and is agreed. It may be summarised as follows.
The appellant, UKI (Kingsway) Limited ("the appellant"), owns the freehold of the building at 1 Kingsway ("the building"). In January 2009, it began a redevelopment of the building behind the original facade. On completion the redeveloped building included 130,000 sq ft of office space.
In anticipation of the completion of the building, discussions took place between Jones Lang Lasalle ("JLL"), the rating agents acting on behalf of the appellant, and the respondent, acting in its capacity as the billing authority, relating to the service of a completion notice to fix the date on which the building, including the premises, would be brought into the 2010 rating list. The parties did not agree on the appropriate date and, on 23 February 2012, the respondent informed JLL that it intended to serve a completion notice in respect of the premises specifying a completion date of 1 June 2012. The respondent asked JLL to confirm the identity of the owner of the building but JLL declined to do so without first obtaining instructions from its client, which were not forthcoming.
The building was managed by Eco FM ("Eco") under a contract with the appellant. Neither Eco, nor its employees, had any authority to accept service of legal documents on behalf of the appellant. The appellant did not carry on business at the building and had no presence there.
On 5 March 2012, the respondent delivered a completion notice by hand to the building, specifying 1 June 2012 as the completion date. The notice was given to a receptionist employed by Eco. The completion notice was addressed to the "Owner, 1 Kingsway, London WC2B 6AN". It did not identify the owner by name.
By 12 March 2012 at the latest, the receptionist had scanned and emailed a copy of the completion notice to the appellant (whether directly or via other persons is unknown). The original hard copy completion notice has been lost.
On 29 March 2012 JLL, purportedly "on behalf of Eco", lodged an appeal against the completion notice contending that:
i) the premises were not capable of being completed by the date shown in the notice;
ii) the notice was invalid as it did not comply with the statutory requirements for such a notice; and/or
iii) because Eco was not the owner of the premises, but merely the facilities management company, the service of the completion notice was invalid.
When, on 7 May 2013, the premises were brought into the list with a rateable value of £2,750,000 with effect from 5 March 2012 (subsequently corrected to 1 June 2012), JLL submitted a proposal dated 14 June 2013 on behalf of the appellant that the entry be deleted from the list on the grounds, inter alia, that:
i) the premises at the date of entry in the list were unoccupied and incapable of beneficial occupation; and
ii) that the completion notice was invalid.
The proposal was not accepted by the respondent and was transmitted to the Valuation Tribunal ("the VTE") for determination on appeal.
The appeals against the completion notice and against the inclusion of the premises in the list were subsequently consolidated and heard, in the first instance, by the President of the VTE, Professor Graham Zellick QC, on 10 March 2014. By that stage the relevant issues for his determination were:
i) whether a completion notice was invalid because it failed to state the name of the intended recipient (where it was not suggested that that name could not be ascertained by reasonable enquiry); and
ii) whether the completion notice dated 5 March 2012 had been validly served on the appellant.
Relevant statutory provisions
Before proceeding further, it is convenient to set out the relevant statutory scheme under the 1988 Act.
For non-domestic rates to be payable (in respect of occupied hereditaments under section 43 of the 1988 Act or unoccupied hereditaments under section 45 of the 1988 Act) the property in question must be entered into the rating list (under section 42 of the 1988 Act).
Section 46A and schedule 4A of the 1988 Act, inserted into the 1988 Act by the Local Government and Housing Act 1989, contain a mechanism for bringing a new building, which has not yet been occupied, into the 2010 rating list. They provide for the service of a completion notice which conclusively deems the building to be complete (whatever its actual state) for the purpose (a) of entry into the rating list and (b) the determination of the rateable value.
There are two kinds of completion notices under schedule 4A: (a) notices served in respect of buildings considered to be complete and (b) notices where the building is not yet complete but is expected to be completed within 3 months.
Section 46A provides:
" Unoccupied hereditaments: new buildings.
46A. (1) Schedule 4A below (which makes provision with respect to the determination of a day as the completion day in relation to a new building) shall have effect.
(2) Where—
(a) a completion notice is served under Schedule 4A below, and
(b) the building to which the notice relates is not completed on or before the relevant day, then for the purposes of section 42 above and Schedule 6 below the building shall be deemed to be completed on that day.
(3) For the purposes of subsection (2) above the relevant day in relation to a completion notice is—
(a) where an appeal against the notice is brought under paragraph 4 of Schedule 4A below, the day stated in the notice, and
(b) where no appeal against the notice is brought under that paragraph, the day determined under that Schedule as the completion day in relation to the building to which the notice relates.
(4) Where—
(a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and
(b) the building is not occupied on that day, it shall be deemed for the purposes of section 45 above to become unoccupied on that day.
(5) Where—
(a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and
(b) the building is one produced by the structural alteration of an existing building, the hereditament which comprised the existing building shall be deemed for the purposes of section 45 above to have ceased to exist, and to have been omitted from the list, on that day.
(6) In this section—
(a) "building" includes part of a building, and
(b) references to a new building include references to a building produced by the structural alteration of an existing building where the existing building is comprised in a hereditament which, by the alteration, becomes, or becomes part of, a different hereditament or different hereditaments."
The statutory mechanism for fixing a completion date therefore conclusively establishes a deemed basis for imposing tax (which, as in the present case, involves making counterfactual assumptions against the interests of the ratepayer and in favour of the taxing authority) for the purpose of entering the property into the rating list (a pre-requisite for charging rates) and valuing the property (valued as a completed building ready for occupation, whether or not it in fact is so ready).
The relevant provisions relating to service are the following:
" Schedule 4A
1.(1) If it comes to the notice of a billing authority that the work remaining to be done on a new building in its area is such that the building can reasonably be expected to be completed within 3 months, the authority shall serve a notice under this paragraph on the owner of the building as soon as is reasonably practicable unless the valuation officer otherwise directs in writing.
(2) If it comes to the notice of a billing authority that a new building in its area has been completed, the authority may serve a notice under this paragraph on the owner of the building unless the valuation officer otherwise directs in writing.
(3) A billing authority may withdraw a notice under this paragraph by serving on the owner of the building to which the notice relates a subsequent notice under this paragraph.
(4) Where an appeal under paragraph 4 below has been brought against a notice under this paragraph,...
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