PHILIP JOHN CARTWRIGHT (Valuation Officer) v NICKERSON ZWANN LTD RA/24/2002

UPPER TRIBUNAL

LANDS CHAMBER

RA/24/2002

Case No RA/24/2002

Between

PHILIP JOHN CARTWRIGHT (Valuation Officer)Applicant

NICKERSON ZWANN LTDRespondent

Before

His Honour Judge Michael Rich QC

Timothy Mould (instructed by Jeremy Burrows, solicitor of the Inland Revenue on behalf of the appellant J P Scrafton appeared) for Respondent

Venue Procession House, 110 New Bridge Street, London EC4V 6JL

Date 17 June 2005

Hearing 15 June 2005

Property: Warehouse, Offices and Premises, Nickerson Zwaan Ltd, JNRC Research Centre, Rothwell, Market Rasen, Lincolnshire LN7 6DT

Catchwords: RATING – Alteration of rating list – Application of s.42(3) 0f Local Government Act 1988 – correct entries not rendered unlawful because replacing part of incorrect entry

[1]This is the Valuation Officer’s appeal against the Decision of the Lincolnshire Valuation Tribunal given on 3rd April 2002, whereby they deleted three entries in the 1995 Rating List, made by the Valuation Officer in respect of premises occupied by the Respondent at JNRC Research Centre, Rothwell, Market Rasen, Lincolnshire. The first entry, the proposal to delete which appeared on the Agenda of the Tribunal as number 31, has been agreed in effect to duplicate item 39 which described the premises as “Warehouse and premises” and showed the premises as having a rateable value of £15,000 with an effective date for the entry of 1st November 1998, and it is agreed that it is unnecessary to consider it separately from Agenda item 39. The second entry, in respect of which the proposal for deletion had been given the Agenda number 35, referred to the same premises, as is agreed more accurately, as “Warehouse, Office and Premises”. It entered a rateable value of £12,500 with an effective date of 1st July 1996. It has been agreed in a Statement of Agreed Facts, signed for the purpose of this Appeal, that the premises were first separately occupied by the Respondent on 1 September 1998, and that they were enlarged by the addition of a mezzanine floor which became available for use on 1 November 1998.

[2]The Statement of Agreed Facts states at paragraph 9:

“The parties are not agreed on the question of whether or not an entry for the Appeal Hereditament [which is defined to mean the premises the subject of the entries thus deleted by the Valuation Tribunal] should appear in the 1995 Rating List; but they are agreed that if the Appeal Hereditament does fall to be shown in the 1995 Rating List then the correct Rateable Values to be shown as attributable to it are £12,500 with effect from 1 September 1998, and £15,000 with effect from 1 November 1998.”

Thus the sole issue on this appeal is whether the Appeal Hereditament does fall to be shown in the 1995 Rating List.

[3]There is no issue that s.42 of the Local Government Finance Act 1988 requires that each hereditament which satisfies the conditions set out in sub-s(1) of that section must be shown on the local non-domestic list. By paragraph 4 of the Statement of Agreed Facts, the parties have agreed item by item that the Appeal Hereditament satisfied those conditions.

[4]Sub-section (3) of s.42 provides that:

“For each day on which a hereditament is shown in the list, it must also show whether any part of the hereditament is exempt from local non-domestic rating.”

Although this requirement was relied on in three other appeals to the Valuation Tribunal which were heard at the same time as the appeals now the subject of appeal to the Lands Tribunal, and I must, in due course refer to the submissions which were accepted by the Valuation Tribunal in respect of those other appeals, it is not contended in the present appeals that the fact that the entries which were deleted, failed to make any reference to the fact, which is agreed, that no part of the Appeal Hereditament was exempt from local non-domestic rating 2 was a breach of this requirement of s.42(3). It is accepted that the obligation applies only in the case of a hereditament which is in part exempt, in which case that fact must be shown.

[5]It follows from those admissions that in accordance with his duty under s.41(1) of the Act of 1988, to “maintain” the List, the Valuation Officer, on learning of the coming into existence of this new hereditament, was under an obligation to enter it on the List, with effect from the date of its coming into existence, namely the date of its first separate occupation, and likewise upon the hereditament’s being materially altered he was obliged to enter a revised rateable value accordingly. If upon considering the appeal against such entries, the Valuation Tribunal came to the conclusion that the description of the hereditament was inaccurate or the effective date was wrong, as is indeed now in part agreed in respect of the entries the subject of the present appeal, it was empowered by Regulation 44(1) of the Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993, to order the Valuation Officer to alter the List accordingly, and by Regulation 47(5) the Lands Tribunal has, upon appeal to it, the like power.

[6]The ground upon which the Respondent, in each case proposed the deletion of each of the three entries concerning the Appeal Hereditament, was the same. It was said:

“The Valuation Officer expanded the Property into an entirely different entity. The most appropriate action would have been to remove the original entry from the List and insert a new assessment. Our proposal is that the Valuation Officer’s actions are bad in law and should be rescinded.”

The Valuation Tribunal recited Mr Scrafton’s submissions which were primarily directed to the deletion of three entries concerning the part of the larger premises, of which the Appeal Hereditament was physically a part, which was occupied not by the respondent but by a different company called Nickerson (UK) Ltd. He is recorded as submitting that:

“.. the Valuation Officer increased the boundaries of an existing hereditament into something of a ‘wholly different nature’ including parts which previously were not rated. .. In addition, section 42(3) clearly states that an entry must show whether part of the hereditament is exempt under local non-domestic rating.”

The Valuation Tribunal appear, in their decision, to have dealt only with the second point which Mr Scrafton does not contend affects the Appeal Hereditament which is accepted not to be in part exempt.

[7]The facts in relation the three entries other than those concerning the Appeal Hereditament are agreed in the Statement of Agreed Facts. Supplementing the agreed statement slightly by reference to documents to which Mr Scrafton has drawn my attention, it appears that:(1) The 1995 List as compiled included an entry numbered 2402800104 in respect of “Offices & Premises” with a rateable value of £20,000 which, for the purposes of this appeal Mr Mould, appearing for the Valuation Officer, has agreed were the premises bounded in blue on a plan at page 303 of the bundle. For the purposes of this appeal it is necessary only to record that these premises 3 (a) were only a part of the total area owned or occupied by the then predecessors of Nickerson (UK). and (b) did not include either of the buildings occupied by the present Respondent and constituting the Appeal Hereditament.

(2) On 30 March 2000 the Valuation Officer substituted for that entry a new entry under the same number with a rateable value of £90,000.

(3) On 28 and 29 March 2001 two sets of revised entries were made under separate numbers for the premises occupied respectively by the Respondents and by Nickerson (UK). The first pair of entries had effective dates of 30 March 2000, thus superseding the entry as at (2) above. The second entries entered against each of the premises in place of such entries, slightly lower rateable values effective from 1 July 1996. It seems to be accepted, that that was the date at which the Valuation Officer then thought that the Respondents had commenced occupation. In respect of the Appeal Hereditament each entry was under number 240280227 and referred to “Warehouse, offices and premises”, and the proposals to delete them were Agenda items 31 and 35 before the Valuation Tribunal. The same description was given of the hereditament occupied by Nickerson(UK) which likewise had a new number, different from that used for the entries in the List as compiled or as revised on 30 March 2000.

(4) The entries both in respect of the hereditament occupied by Nickerson (UK) and in respect of the Appeal Hereditament “expanded the Property” beyond the hereditament described in the List as compiled.

(5) For completeness I record that it is also agreed that the entry in regard to the Appeal Hereditament was further amended on 30 March 2001 by increasing the rateable value to £15,000 with effect from 1 November 1998, being the date upon which the mezzanine floor became available for use. The proposal to delete this entry was Agenda item 39 before the Valuation Tribunal.

[8]The Valuation Tribunal held that the Valuation Officer has “misidentified” the subject property. In the light of Mr Scrafton’s argument as reported, it appears that by this the Tribunal were agreeing that the hereditament in respect of which the entry was made with a rateable value of £90,000 from 30 March 2000 was not the same as the hereditament in respect of which the entry under the same number had been made in the compiled List with a rateable value of £20,000. This, as I follow their reasoning meant that it included parts which were exempt from local non-domestic rating. They therefore held that there had been a failure to comply with s.42(3). They therefore held that the entry in respect of that part of the property occupied by Nickerson (UK) Ltd, which, on this reasoning, likewise included parts which were exempt, should be deleted, rather than the description being corrected. Against that decision the Valuation Officer entered an appeal to the Lands Tribunal, which however was subsequently withdrawn. Accordingly I have heard no argument as to whether that part of their Decision appertaining to the hereditament occupied by Nickerson (UK) Ltd was or was not correct, and I make no decision in relation thereto. 4

[9]Mr Scrafton’s submission in regard to that part of the Decision which is the subject of this appeal, is as stated in the detailed reasons for the proposal for deletion, which is set out in paragraph 6 above. Thus as he told me in the course of argument, he accepts that the Appeal Hereditament should be rateable and that the entries considered as Agenda items 35 and 39 were, subject to the agreed correction of the effective date, unobjectionable in form. He has none the less submitted that they should be deleted because, as he puts it, those entries derive from the splitting into parts of a single hereditament, in respect of which the entry has been held to have been bad.

[10]The proposition, as I have been able to understand it, is as follows: Paragraph (9) of Regulation 13 of the 1993 Regulations defines three circumstances in which a hereditament is to be treated as coming into existence or ceasing to exist; the circumstance which Mr Scrafton calls “splitting” is described in “(a) property previously rated as a single hereditament becoming liable to be rated in parts”; the single hereditament, in part substitution for which the entries in respect of the Appeal Hereditament were made, was not, as held by the Valuation Tribunal liable to be rated; therefore, as I think Mr Scrafton must have intended to say, although at no stage of his argument did he appear to think through any submission which he made to its conclusion, the Appeal hereditament never came into existence. The absurdity of this submission hardly needs explanation. Moreover it wholly disregards the fact that Regulation13(9) does not limit the circumstances in which a hereditament is said to come into existence. It defines certain circumstances which are included in the circumstances when a hereditament will come into existence and the agreed statement of facts signed by Mr Scrafton accepts that “By virtue of Nickerson Zwann’s separate occupation, on 1 September 1998 the Appeal Hereditament became a hereditament ..”

[11]Mr Scrafton, none the less maintained that the manner of the entry of that hereditament into the List was unlawful or otherwise defective so that it should be deleted in order to make the List, as he accepted, inaccurate. He boldly submits that a “technicality” may have such perverse effect. Such submission was made, however, without reference to any relevant statutory or regulatory provision. I therefore allowed Mr Scrafton time in which to identify any such provision. He returned after an adjournment to accept that there is no such provision and it follows no “technicality” upon which he could rely. He therefore accepted that this appeal must be dismissed with costs and that the entries to be made in respect of the Respondent’s occupation should refer to “Warehouse, office and premises” with(i) a rateable value of £12,500 from 1 September 1998 and

(ii) £15,000 from 1 November 1998, and the Valuation Officer should be ordered to make entries accordingly.

[12]The hearing of this appeal, arising from the acceptance by the Valuation Tribunal of what appear to me to have been totally misconceived submissions, has been most unfortunately delayed for over three years. This has in part been due to the illness of the Valuation Officer, although that should not, in my opinion, have prevented its prompt prosecution by the Inland Revenue with the assistance of counsel from an early stage. It has however been further delayed by Mr Scrafton’s unavailability, on a number of occasions, to give prompt attention to the Tribunal's directions, including the delaying of signing of the Statement of Agreed Facts until less than a week before the hearing. This led to the unnecessary preparation of evidence as to matters which were in fact agreed. Had the issues been addressed in the way in which Mr Scrafton felt constrained to do in the course of his oral argument at a much earlier, and in 5 my judgement more appropriate stage of the proceedings, both parties could have been saved unnecessary expenditure of costs and the Tribunal’s resources might have been more profitably employed. Dated: 17 June 2005 (signed) His Honour Judge Michael Rich QC 6