“7. In June 2003 the Vtesse network was in the course of construction. Vtesse only builds network as and when it is required to fulfil arrangements made with a particular customer. The system uses optical fibre for transmission of telecommunications signals. What is transmitted is light, and the signals are binomial, consisting of a decipherable pattern of on-off transmission. 8. Individual fibres are very small, not very much greater in circumference than a human hair. They are contained in optical fibre cables. A cable comprises optical fibres consisting of finely stretched glass, each with an individual plastic coating. These are grouped within plastic sheaths and run in the form of extended spirals round a steel or plastic core. Outside them is sheathing and, in some cases, armouring. Fibres are individually identified by colouring or marking their plastic coating. Cables vary from about 6mm to 25 mm in diameter and typically contain between 12 and 296 fibres. 9. While some cables are suspended from poles, especially in the BT local access network, most are buried in the public highway or are laid alongside railway lines and canals. They can be directly buried in the ground, but this makes repair and replacement more difficult. In consequence most buried cables are installed in ducts. Ducts are pipes, nowadays plastic, with a typical outer diameter of about 114mm. It is usual to install up to four sub-ducts, each of about 40mm diameter, in the duct. This is done for a number of reasons, notably in order to facilitate the installation of new cables and the withdrawal of old cables. Use of sub-ducts increases the number of cables that can in practice be installed in a duct. 10. Ducts are laid in trenches, the size of which is determined by the number of ducts to be installed and the nature of the ground. For ducts laid in the public highway (and these constitute the vast majority) most aspects of the trench specification – its size, methods of refilling and the reinstatement of the highway surface – are prescribed in a code of practice issued by the Highways Authorities and Utilities Committee set up under the provisions of theNew Roads and Street Work Act 1991 . Duct routes are built with jointing chambers and access chambers. Jointing chambers accommodate the splice enclosure between cable lengths and also spare coils of cable which enable the cable ends to be pulled out of the cable for jointing and provide slack for repairs to be carried out if the cable is damaged between jointing chambers. Access chambers are provided to allow the cable to be pulled into the duct, typically at intermediate points between chambers and in particular where the duct route changes sharply. 11. When used to extend, or interconnect with, the cables owned by another operator, Vtesse’s own-build fibres are generally fusion-spliced to the other operator’s fibre at a convenient jointing chamber in the street. Alternatively Vtesse may build to a “co-location centre”
“(174) In conclusion, it should be recalled that business rates are a tax on the value of the property concerned. They are not a tax on profits or revenues. They are normally applied on all non-domestic properties, and consequently are applied to all telecommunications networks. According to British case-law, all telecommunications networks are valued as a whole. There are several methods for valuing such property. When all methods can be applied, they should result in the same valuation. The use of a specific valuation method depends on the circumstances of the case. (175) It now appears that the VOA has applied to BT and Kingston the general rules concerning business rates as laid down in the legislation and case-law. It is clear that the valuation of BT’s and Kingston’s hereditaments as well as the revisions of these rateable values, are carried out on the basis of a different method than in the case of their competitors. However, the Commission can conclude that there is no evidence that the use of this different method is not justified by the objective differences between those firms and their competitors and by the extent of the evidence available to the VOA. (176) There is no evidence that the application of a different valuation method to BT and to Kingston has resulted in an advantage to these firms in comparison with their competitors. Since there is no evidence of an advantage, the Commission can conclude that the non-domestic rates system has not provided State aid to BT and/or Kingston within the meaning of Article 87(1) EC during the period considered by the Commission i.e. 1995-2005.”
“Article 1 The application by the United Kingdom of the tax on non-domestic property to BT plc and Kingston Communications plc from 1995 until the end of 2005 does not constitute aid within the meaning of article 87(1) of the Treaty. Article 2 This decision is addressed to the United Kingdom of Great Britain and Northern Ireland.”
“23. Mr Partridge considered that the tone upon which Mr Bradford relied was flawed, because it took no account of the assessment of the British Telecommunications (BT) hereditament, which had been agreed after the valuation arguments had been fully explored both before and in front of the VT and various experts reports had been submitted in connection with the appeal to the Lands Tribunal. The BT hereditament included 85.8% of the optical fibre network in the United Kingdom. Once this assessment had been agreed, said Mr Partridge, it was no longer open to the VO to rely on the rents of other similar properties, while ignoring the evidence of a tone of value provided by the BT settlement. In Mr Partridge’s view, a proper devaluation of that assessment would have shown that it would be grossly unfair to rely on market evidence to value what was only a small segment of the total fibre optic market.”
“29. Mr Bradford said that he was aware of the BT assessment; indeed he had been involved, with others, in work leading to the eventual agreement with BT. He had, however, never attempted to analyse BT’s RV in the way Mr Partridge had done. In his view such an analysis could only ever be an apportionment based on significant assumptions as to the extent and value of component parts. BT’s assessment included millions of local access copper loops, several thousand telephone exchanges, over 100,000 public telephone kiosks, hundreds of mast sites, two satellite earth stations as well as an extensive national fibre optic trunk network. Vtesse, on the other hand, only occupied limited trunk fibres in their network; they did not have any of the other BT type of rateable network assets. Vtesse’s trunk network of 625 route km was a minute proportion of BT’s trunk fibre optic network. The difference in scale alone prevented any meaningful comparison. A devaluation of the component parts could not be accurate, as all parts of BT’s network interacted with each other and affected the value of the whole. 30. In summary, Mr Bradford’s view was that “no useful analysis can be made of BT’s agreed assessment when looking at the rental value of fibre optic networks. The networks are significantly different in scale, age and diversity. BT’s assessment is clearly not a direct or even an indirect comparable and any attempt at comparison is spurious in my opinion.”” “no useful analysis can be made of BT’s agreed assessment when looking at the rental value of fibre optic networks. The networks are significantly different in scale, age and diversity. BT’s assessment is clearly not a direct or even an indirect comparable and any attempt at comparison is spurious in my opinion.””
“Vtesse took a major and a very active part in arguing the matter and is in the process, we were told, of bringing an action for annulment of that decision. The reality, as it appears to us, is that Vtesse was as much a party to the Commission proceedings as it is to these proceedings.”
“57. We would therefore conclude, were it necessary to do so, that this Tribunal could not take a decision that runs counter to the Commission’s conclusion that the different valuation methods applied to Vtesse and BT and the VO’s unwillingness to compare the valuation of the former’s fibre optic hereditament with that of the latter does not amount to the conferring of an advantage on BT or the unlawful provision of state aid. 58. It seems to us that it is not necessary to do so, however, because we accept, as a matter of fact and judgement and for the reasons recorded in paragraphs 29 and 30 above, the view of Mr Bradford that BT’s assessment is simply not usefully comparable with that of Vtesse. We agree with the submission of counsel for the VO that in those circumstances it is impossible to say that BT has been given any unfair advantage or more favourable treatment contrary to the broad principles of Article 87 or to the more specific regulatory framework in the EU telecoms directives. Our decision on the facts does not conflict with that of the Commission.”
“76. Mr Bradford pointed out that Vtesse’s RV (which he suggested should be£110,000 ) was less than 0.025% of BT’s England RV (£443.5m ) as at1 April 2002 and that the BT network was infinitely larger and more diverse than Vtesse’s. Both he and Mr Partridge agreed that Mr Partridge’s attempted deconstruction of BT’s assessment was unprecedented in rating history. We have no hesitation in concluding that the exercise which Mr Partridge has undertaken is wholly unreliable. We obtain no assistance from it. 77. We are satisfied that a tone for the valuation of fibre optic telecommunications networks in the 2000 rating list has been established and that Mr Bradford’s valuations are consistent with that tone. The appeal is allowed. We direct that the assessment of the hereditament in the 2000 list be altered to£110,000 with effect from1 April 2003 and£470,000 with effect from31 March 2004 .”
“The rent at which it is estimated the hereditament might reasonably be expected to be let from year to year if the tenant undertook to pay all usual tenant’s rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command that rent.”
“40. The concept of tone of the list has been explained by this Tribunal on many occasions (see eg K Shoe Shops Limited v Hardy (VO) [1983] RA 145 at 154; Burroughs Machines Limited v Mooney (VO) [1977] RA 45 at 55; Marks v Eastaugh (VO) [1993] RA 11 at 20-23; Jafton Properties Limited v Prisk (VO) [1997] RA 137 at 166-7). It is concerned with the weight to be given to assessments in the rating list. It is settled law that assessments of comparable hereditaments are admissible as evidence of value (Pointer v Norfolk Assessment Committee[1922] 2 KB 471 ). Tone of the list may be explained as follows. Rateable value is based on market rents. These usually vary, sometimes considerably, and it is often difficult to find a general pattern. When preparing a rating list the valuation officer is required to value each property individually and to have regard to the underlying principle of uniformity and equality. Although rents may vary greatly assessments must show a uniform pattern. This has led to assessment by the use of common unit figures for classes of hereditament and location with individual adjustments to reflect the characteristics of each property. Advertising rights are usually valued by reference to a figure per 48-sheet poster. This figure will be based on an analysis of the rental evidence. 41. There are three stages leading to the establishment of tone of the list. At first, when a new rating list is put on deposit, entries will carry relatively little weight: they are opinions of value by the valuation officer, as yet unchallenged and untested by negotiation. Over time assessments will be challenged and agreed or determined by an LVT or this Tribunal or accepted by lack of challenge. Finally, a stage is reached where enough assessments have been agreed or determined or are unchallenged to establish a pattern of values, a tone of the list. The list is then said to have settled. Rents will be largely subsumed into assessments. At that stage rating surveyors will have little regard to rents and pay considerable attention to assessments. The position regarding tone of the list at any particular time is a question of fact. When an assessment is challenged before a tribunal the correct time for deciding whether a tone of the list has been established is immediately before the hearing. The question in this appeal is therefore whether a tone of the list has become established for advertising rights comparable to the appeal hereditament?”
“I was interested to see that in a consultation document published by Ofcom on17th January 2008 entitled “Business Connectivity Market Review” it carried out a very similar exercise. This was for a different purpose but shows that it is possible to financially analyse BT’s network.”
“The correct position is that, when there is no question of a conflict of decisions in the sense which I have discussed, the decision of the Commission is simply evidence properly admissible before the English court which, given the expertise of the Commission, may well be regarded by that court as highly persuasive. As a matter of law, however, it is only part of the evidence which the court will take into account.”
“(5) The Lands Tribunal may confirm, vary, set aside, revoke or remit the decision or order of the tribunal, and may make any order the tribunal could have made.”
“In relation to an appeal the appeal court has all the powers of the lower court.”
“The second type of waiver which debars a person from raising a particular defence to a claim against him, arises when he either agrees with the claimant not to raise that particular defence or so conduits himself as to be estopped from raising it. This is the type of waiver which constitutes the exception to a prohibition such as that imposed by section 29 (3) of the Landlord and Tenant Act, 1954, and other statutes of limitation. The ordinary principles of estoppel apply to it.”
“33. Total lit fibre as at1 April 2003 = 147.027 Route km consisting of 4.127 Route km of own build and 142.9 km of leased fibres. 34. 2 fibres were lit by Vtesse on the total Route km of 147.027 km as at1 April 2003 and have been agreed for the purposes of this appeal only to be contiguous. 35. 2 fibres were lit by Vtesse on the total extended Route km of 625.912 km as at31 March 2004 and have been agreed for the purposes of this appeal only to be contiguous.”
“Since the last material change in circumstances occurred on31st March 2004 , this should be the effective day for the second alteration of the list which occurred on that day.”
“The valuation tribunal, in my judgment, is not bound by the agreement or the late abandonment of points by an appellant. The valuation tribunal must decide the issues before it in accordance with the law, and in doing so, it will no doubt consider that its decision may affect persons other than the parties before it. The powers of a valuation tribunal setting an effective date are not the same as those of a valuation officer altering the list. The effective date will be governed by how the regulations apply to the particular circumstances of the case. Thus if the rateable value which is found by the valuation tribunal is in excess of that in the list at the date of the proposal and in excess of the amount contended for in the proposal, the list would have had to have been altered with effect from the day on which the decision is given.”
“The principle that no one shall be allowed to gain an advantage from his own wrong is of general application for it undoubtedly applies so as to qualify the effects of statutory words which are wholly unambiguous. But it is somewhat easily rebutted by the statutory context.”
“On the facts of the present case, if the man in the street were to be asked whether, for the purposes of claiming compensation from his employers, the applicant should be better off because his actual and prospective absence from work was caused by his having committed a criminal act and being punished for it, than if it was due to an event not of his own making, he would not pause long to reply. In my judgment he would be right, for such a result would be an affront to common sense; an infringement of what Diplock L.J. described in Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26, 66, as “the fundamental legal and moral rule that a man should not be allowed to take advantage of his own wrong.”
“In the case of statutory duties the rule is, in my opinion, based upon interpretation of the meaning intended by Parliament. It is not a rule imposed ab extra as in the case of contracts. That is apparent from the passage of the judgment of Donaldson LJ which I have just quoted. To hold otherwise would come perilously close to infringing constitutional doctrine of major importance. Our courts have no power to dispense with the laws enacted by Parliament or (as it is now called) to displace them, subject to the law of the European Community. So the rule is that we must interpret Acts of Parliament as not requiring performance of duties, even when they are in terms absolute, if to do so would enable someone to benefit from his own serious crime.”