Rates and rating — Proposal to alter the valuation list — Valuation under section 20 of the General Rate Act 1967 — Hereditament to be valued rebus sic stantibus — Effect on value of enterprise zone nearby — Valuing the hereditament in the same state includes effect of enterprise zone
The hereditament which was the subject of this appeal is a factory situated just under one mile from the Lower Swansea Valley Enterprise Zone in South Wales. The Enterprise zone was designated in 1981 under powers contained in the Local Government, Planning and Land Act 1980. The ratepayer and the valuation officer agreed that one result of setting up the enterprise zone has been to depress the rental values of commercial and industrial premises situated outside but in the near neighbourhood of the designated area. This is because of the fiscal advantages of operating within a zone. The agreed rateable value of the hereditament allowing for the effect of the zone was £36,500; and £45,500 if the zone was not allowed for.
Where a proposal is made for an alteration to the valuation list, a valuation is to be made in accordance with section 20 of the General Rate Act 1967. This provides that “the value or altered value … shall not exceed the value which would have been ascribed [to the hereditament] … if the hereditament had been subsisting throughout the year before that in which the valuation list came into force, on the assumptions that at the time by reference to which that value would have been ascertained: (a) the hereditament was in the same state as at the time of valuation …; and (b) the locality in which the hereditament is situated was in the same state …”. The purpose of this section is to secure that in the case of new entries or alterations to existing entries, the value is to be at the same general level as was applicable for the purposes of the original list.
The valuation officer’s argument, which was accepted in the Court of Appeal ([1987] 1 EGLR 168), was that the word “state” in paras (a) and (b) of section 20 was intended to cover only physical factors; the ratepayer contended that the word embraced also the advantages and disadvantages resulting from primary or subordinate legislation.
Held In allowing the ratepayer’s appeal, and in restoring the decision of the Lands Tribunal ((1984) 271 EG 291), the effect of the enterprise zone was to be taken into account. The broad purpose of section 20 was to secure that a hereditament should be valued on the basis of the general level of values prevailing when the valuation list was made up. There was no good reason for requiring the disregard of any circumstances which would ordinarily be taken into account under the rebus sic stantibus rule. The word “state” in section 20 must be given a wide construction, so as to include intangible as well as physical advantages and disadvantages.
Dawkins v Ash Brothers & Heaton Ltd
[1969] 2 AC 366 applied.
Guy Roots (instructed by McKenna & Co) appeared for the appellant ratepayer; and William J Glover QC and David Mole (instructed by the Solicitor of Inland Revenue) appeared for the respondent valuation officer.