SPEARS BROTHERS (a firm) v RUSHMOOR BOROUGH COUNCIL Billing RA/39/2004

UPPER TRIBUNAL
LANDS CHAMBER
RA/39/2004Case No RA/39/2004
Between
SPEARS BROTHERS (a firm)ApplicantRUSHMOOR BOROUGH COUNCIL BillingRespondent
Before
N J Rose FRICSVenue Procession House, 110 New Bridge Street, London EC4V 6JLDate 2 February 2006Hearing 9 January 2006Property: Workshop, 25 South Street, Farnborough, Hampshire GU14 6LNCatchwords: RATING – alteration of rating list – completion notice – workshop – temporary electricity supply from neighbouring workshop in same ownership – whether property completed – held property a self-contained unit and not completed due to absence of permanent electricity supply, wiring for lighting and fire alarm system – Local Government Finance Act 1988, Schedule 4A.
[1]This is an appeal by Spears Brothers (“the appellant”), the owner of a workshop known as 25 South Street, Farnborough, Hampshire, GU14 6LN (“the appeal property”) against a decision of the Hampshire North Valuation Tribunal, dismissing its appeal against a completion notice served by Rushmoor Borough Council (“the billing authority”). The notice stated that the appeal property was completed on 26 September 2003.[2]The appeal was conducted in accordance with the Tribunal’s simplified procedure. Mr Robert A Spears appeared on behalf of the appellant with permission of the Tribunal and gave evidence. Mr Roger Gear, local taxation manager with the billing authority appeared for the authority with permission of the Tribunal. He called Mr A Perkins, a revenue inspector with the billing authority, whose inspection resulted in the completion notice being served. On 19 January 2006 I inspected the appeal property and the neighbouring premises in company with representatives of the parties.[3]It became apparent at the hearing that most of the facts were agreed. In the light of that agreement, the evidence and my inspection, I find the following facts. The appeal property stands on the site of some old farm buildings, which were purchased by the appellant about 30 years ago and subsequently used for engineering purposes. In 1996 planning permission was granted to redevelop these buildings on the original footprint. The permitted development consisted of seven small industrial units, each approximately 80m2 in area, with five at ground floor level and two on the first floor. Phase 1 was constructed in 1998. It consisted of units 13, 15 and 19 on the ground floor and 17 on the first floor. Units 13, 15 and 19 are currently occupied by the appellant as a single workshop for the purposes of its business. Southern Electric Plc disconnected the power supply to the original buildings and provided a new feed into a meter room which the appellant had erected on the site. There are separate electricity power supplies to units 13 and 17. There was at one time a separate supply to unit 15, but this no longer exists. Electricity used in units 15 and 19 is taken from the supply to unit 13.[4]Work on the second phase of the development was delayed because of problems with the sub-contractor supplying the windows. By early 2000, however, the main structure of the remaining units had been completed and, in February 2000, electricity sub-mains were installed leading from each unit in the second phase to the meter room. On 10 March 2000 Southern Electric Plc wrote to Mr Spears. They explained that the total capacity available on the cable supplying the appellant’s site and the neighbouring houses in Whites Road was 200 kVA. This was equivalent to a total of 400 amps, of which 200 were used by the houses and the remainder was available for the appellant’s site. Since Southern Electric’s minimum three phase power supply to each unit was 100 amps, and since units 13 and 17 each already had such a supply, it has not been possible to provide an independent supply to the appeal property, or to the adjoining ground floor unit, number 21, and both units have remained unoccupied since they were built. There has been some interest from prospective tenants, but no letting has been effected because of the absence of an independent electricity supply. Nothing in Southern Electric’s licence enables the appellant to insist on the provision of such a supply. 2[5]Mr Perkins first visited the site on 23 October 1996. He continued to visit at three monthly intervals and a completion notice was issued whenever he considered that a particular unit had been substantially completed. On 1 February 2002 he noted that the shell of the appeal property was complete, but neither windows nor doors had been fitted at that time. When Mr Perkins visited the property on 26 September 2003, the windows and doors had been installed and he considered it appropriate to issue a completion notice.[6]On 26 September 2003 the electricity position at the appeal property was as follows. There was a double 13 amp socket outlet. This single phase supply was provided for the use of the builders working on the appeal property. There was also a cable leading to the appeal property’s internal wc. This was used to provide hot water, again for the use of the builders, but in this case it was also available for their use in connection with building activities in adjoining units. Finally, there was a three phase supply, which was only used on one occasion for welding purposes by the contractors who installed the metal door to the appeal property. The power used for the 13 amp sockets, the hot water supply and the three phase supply was all taken from the electricity supply to unit 13.[7]The relevant statutory provisions are contained in the Local Government Finance Act 1988 Schedule 4A, to which effect is given by section 46A. So far as relevant Schedule 4A provides: 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 … (6) In this Schedule ‘completion notice’ means a notice under this paragraph. 2 (1) A completion notice shall specify the building to which it relates and state the date which the authority proposes as the completion day in relation to the building. (2) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is not completed, the authority shall propose as the completion day such day, not later than 3 months from and including the day on which the notice is served, as the authority considers is a day by which the building can reasonably be expected to be completed.(3) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is completed, the authority shall propose as the completion day the day on which the notice is served…[4](1) A person on whom a completion notice is served may appeal to a valuation tribunal against the notice on the ground that the building to which the notice relates has not 3 been or, as the case may be, cannot reasonably be expected to be completed by the day stated in the notice.(2) Where a person appeals against a completion notice and the appeal is not withdrawn or dismissed, the completion day shall be such day as the tribunal shall determine…[9](1) This paragraph applies in the case of a building to which work remains to be done which is customarily done to a building of the type in question after the building has been substantially completed.(2) It shall be assumed for the purposes of this Schedule that the building has been or can reasonably be expected to be completed at the end of such period beginning with the date of its completion apart from the work as is reasonably required for carrying out the work.”[8]Mr Spears said that there were several reasons why, as at 26 September 2003, the work remaining to be done to the appeal property could not reasonably have been expected to be completed within three months. There was no permanent electricity supply; no electric wiring; no electric lighting; no power trunking; no fire alarm; no heating; no decorations and the joinery had not been completed. The 13 amp single phase temporary electricity supply was insufficient to operate a machine shop, which required a 100 amp three phase permanent main supply. It was a statutory requirement for a workshop to be provided with a fire alarm system, connected to the electricity main and with a battery standby. A building without heating could be closed down by the health and safety authorities if the temperature was too low. It would be necessary for a long cable to be attached to the 13 amp socket if work was carried out on the other side of the workshop and this would constitute an unacceptable safety hazard. Fuses would blow if all the machinery in units 13, 15 and 19 were in operation at the same time. It was therefore not possible to use the same electricity supply for engineering operations in the appeal property. It had been necessary to control the activities in units 13, 15 and 19 during the short period when welding was taking place in the appeal property, in order to ensure that the system was not overloaded.[9]Mr Perkins said that he considered that the appeal property had been substantially completed when he inspected it in September 2003. It was watertight, the windows and doors were fitted and the building satisfied the billing authority’s guidelines for deciding whether a property was substantially complete. The relevant guidelines were as follows:
“(i) A property will be roofed, glazed, plastered; exterior doors installed, floors and ceilings in place, although any of this work may not be fully completed. (ii) In the normal pattern of construction electrical wiring and plumbing work will be installed prior to plastering but final fittings not necessarily completed. (iii) Normally by the time a property has been plastered the electricity, mains water, gas supplies and drainage will be available but not necessarily connected.”
[10]Mr Gear accepted that the internal walls of the appeal property were not plastered and/or painted, but he submitted that that work was not necessary in an industrial unit. He agreed that 4 the electricity supply was only of a temporary nature. He said, however, that that was sufficient to comply with the electricity requirement in paragraph (iii) of the billing authority’s guidelines. The point was that there was a supply of electricity to the unit. The extent of the power which could be obtained from that supply was irrelevant. Nor was it appropriate to consider whether payment for the electricity used was to be borne by the occupier of the appeal property or by the occupier of another unit.[11]Mr Gear conceded that the property did not necessarily comply in full with the building regulations, but that was not the appropriate test. The test was whether the appeal property was ready for occupation for rating purposes. The three month period referred to in Schedule 4A was sufficient to allow an incoming tenant to take occupation and make the usual tenant’s internal alterations to meet its own requirements.[12]I was not referred to any authorities to assist with the interpretation of para 1(1) of Schedule 4A of the 1988 Act, which refers to the work remaining to be done being “such that the building can reasonably be expected to be completed within 3 months.” However, a broadly similar formula used in Schedule 1 of the General Rate Act 1967 was twice considered by the Court of Appeal in judgments which I consider to be of assistance when interpreting the 1988 Act.[13]Para 8(1) of Schedule 1 of the 1967 Act provides as follows:
“Where a rating authority are of opinion – (a) that the erection of a building within their area has been completed; or (b) that the work remaining to be done on a building within their area is such that the erection of the building can reasonably be expected to be completed within three months, and that the building is, or when completed will be, comprised in a relevant hereditament, the authority may serve on the owner of the building a notice (hereafter in this paragraph referred to as ‘a completion notice’) stating that the erection of the building is to be treated for the purposes of this Schedule as completed on the date of service of the notice or on such later date as may be specified by the notice.”
The expression “relevant hereditament” is defined in paragraph 15 as meaning “any hereditament consisting of, or part of, a house, shop, office, factory, mill or other building whatsoever, together with any garden, yard, court or other land ordinarily used or intended for use for the purposes of the building or part.”[14]In Ravenseft Properties Ltd v London Borough of Newham [1976] 1 All ER 580 Lord Denning MR said (at p 585b) 5 “The word ‘completed’ in para 8(1) seems to me to mean completed in the sense of being ready for occupation”.[15]In Post Office v Nottingham City Council [1976] 1 WLR 624 Browne LJ said (at p 635 B) “In my judgment, the effect of these provisions, as interpreted by this court in Ravenseft’s case, is that the question is whether the building, as a building, is so far completed as to be capable of occupation or ready for occupation for the purposes for which it was intended – as a house, shop, office, factory or, in this case, a telephone exchange.”[16]Subsection 46A(6) of the 1988 Act provides that the expression “building” in section 46 includes part of a building. One possible approach, therefore, to the question whether the appeal property was completed would be to consider it as part of a single building, comprising the whole of phase 2 or alternatively the whole of both phases 1 and 2 of the development. In the light of the evidence and my site inspection, however, I am satisfied that the appeal property was designed to be used as a self-contained workshop and so constructed and that it is as such that the dispute falls to be determined. I therefore approach this appeal by asking myself whether the work remaining to be done on 26 September 2003, in order to render the property capable of occupation as a self-contained workshop, can reasonably have been expected to be completed within 3 months. I reject Mr Spears’s suggestion that the state of the joinery and the absence of heating and decorations mean that the building could not reasonably have been expected to be completed within three months. In the light of my inspection I am satisfied that the small amount of missing joinery could have been provided in a matter of days and that the fact that the block walls were neither plastered nor painted did not make the appeal property incapable of immediate occupation as a workshop. Nor do I consider that the absence of a heating system is material. It would in my view have been possible to provide a form of free-standing heating, independent of the electricity system, again within a matter of days.[17]I consider, however, that there is more force in Mr Spears’s contention that the lack of electrical wiring and lighting mean that the property was not complete or approaching completion. By the time the completion notice was served it was clear that there was no prospect that an independent electricity supply would be made available to serve the appeal property as an independent unit. Only two 100 amp supplies were available for the entire development and they had been taken up by other units. Although Mr Perkins considered that electrical wiring was fitted inside the unit, I am satisfied in the light of my inspection that that is not the case. In particular, there is no wiring for a lighting system. That fact, together with the absence of any prospect of an independent electricity supply being provided to the appeal property within the statutory three months period, is in my view conclusive. Both the appeal property and unit 21 – which immediately adjoins both it and the workshop used by the appellant for its business – have been vacant for several years and there was no suggestion that the appellant ever had an operational requirement for them. In the absence of such a requirement, or the possibility of a market letting without an independent supply of electricity, there is no reason to suppose that the necessary wiring would have been provided within the three months time-scale or at all. In my view, a building without electric lighting is incapable of occupation as a workshop. 6[18]Mr Spears also suggested that the appeal property could not be occupied without a fire alarm system. Mr Gear did not challenge that suggestion and I accept it. As in the case of the lighting system, I find that it could not reasonably have been expected that a fire alarm would be provided by the owner. That is a further reason why I consider the completion notice to be defective.[19]The appeal therefore succeeds. I determine that the appeal property was not completed on 26 September 2003, that it could not reasonably have been expected to be completed within three months of that date and that, accordingly, the completion notice should be quashed.[20]In appeals conducted in accordance with the simplified procedure, the Tribunal is only authorised to award costs in certain limited circumstances. In my view no such circumstances arise in this case and I make no order as to costs. Dated 2 February 2006 N J Rose FRICS 7