Rating–Newly-erected and not yet occupied telephone exchange at Nottingham–Date from which building to be treated as completed for purposes of rating of unoccupied premises–‘Vital distinction’ in such cases is between the time when the building is ready for occupation as a building and the time when equipment etc is installed to fit it for use for the purpose for which it is intended–Thus (for instance) a transformer may be necessary to fit a building for occupation as a building, but not specialised telephone exchange equipment
This was an
appeal by the Post Office from a judgment of Judge Heald at Nottingham County
Court on June 17 1975 deciding that a newly-constructed telephone exchange at
Nottingham known as the Crusader Exchange, the subject of a completion notice
served by the respondent rating authority, Nottingham City Council, on January
27 1975, was to be treated for the purposes of rating of unoccupied buildings
as having been completed on August 1 1975.
Mr W J Glover
QC and Mr M Horton (instructed by the Solicitor to the Post Office) appeared
for the appellants, and Mr G Rippon QC and Mr F Amies (instructed by the
council solicitor) represented the respondents.
Giving the
first judgment, BROWNE LJ said: This is an appeal by the Post Office from a decision
of His Honour Judge Heald given at Nottingham County Court on June 17 1975. The
case relates to the application to a new telephone exchange in Nottingham of
the provisions as to the rating of unoccupied property which were first
introduced by the Local Government Act 1966 and are now contained in the
General Rate Act 1967, which was a consolidation Act. Section 17 of the 1967
Act provides as follows, so far as relevant:
(1) A rating authority may resolve that the
provisions of schedule 1 to this Act with respect to the rating of unoccupied
property . . . shall apply . . . to their area and in that case those
provisions shall come into operation . . . in that area on such day as may be
specified in the resolution.
On February 4
1974 Nottingham City Council passed a resolution that those provisions should
apply to their area from April 1 1974. Paragraph 8 (1) of schedule 1 to the
1967 Act gives the rating authority power to serve what is described as ‘a
completion notice,’ and paragraph 8 (4) gives a right of appeal to the county
court. I shall have to come back later to those provisions, and I only mention
them at this stage to make the history intelligible.
In February
1973 the Post Office started the erection of a building in Nottingham for use
as a telephone exchange. This was a new exchange which was to be known as the
‘Crusader Exchange.’ The work was to be
done under four contracts. First, a contract to erect the building, and this
was to be done by an outside contractor. Secondly, the electrical work, which
was to be done by the Post Office’s own engineers. This was electricity both
for the operational purposes of the exchange and for what Mr Glover calls the
domestic purposes of the building. Thirdly, a contract for ventilation, which
was to be done by an outside contractor. Fourthly, a contract for the telephone
equipment itself, part of the installation of which was to be done by the Post
Office engineers and part by the suppliers of the equipment. Mr Glover told us
that this division of labour was arranged so that the building could be brought
into operation as soon as possible. On January 27 1975 Nottingham City Council
served a completion notice in respect of this building, which appears at page
10 of the documents and is in these terms. Paragraph 1 recites the resolution
under section 17 and the first schedule to the Act of 1967. Paragraphs (2) and
(3) say:
(2) The rating authority is of the opinion that
the work remaining to be done in the building at the corner of Thurland Street
and Lincoln Street (hereinafter called ‘the building’) is such that the
erection of the building can reasonably be expected to be completed within
three months and that the building when completed will be comprised in a
relevant hereditament.
(3) The rating authority therefore serves upon
you as owner of the building this completion notice stating that the erection
of the building is to be treated for the purpose of the first schedule to the
General Rate Act 1967 as completed on February 28 1975.
The notice
then calls the attention of the person upon whom it is served to the right of
appeal. The Post Office appealed to the county court; the hearing took place on
April 17 and 18 and May 27 and judgment was given on June 17 1975. Mr Amies,
for the rating authority, submitted to the county court judge that he, the
judge, should decide this case by putting himself in the position of the rating
authority as at January 27 1975, when the completion notice was given, and, I
gather, decide when the building could then reasonably have been expected to be
completed. The judge rejected this approach. He said at p 7 of the documents:
The court has
to decide on the facts as it knows them and not on an assumed position which it
knows to be wrong. In my opinion I have to take into account the supervening
events which occurred after January 27 1975 and in particular the difficulties
over the heating system and the tiling subcontract which meant that for a
period of almost two months the electricians were off the site. In my opinion if
I come to the conclusion that the rating authority have given a date for the
building to be treated as completed which is in fact earlier than it could be
reasonably expected to be completed, then I have to look at the matter afresh
on the facts as I know them and have to determine a date which has to be
treated as the date of completion.
In my
judgment, the judge was right in his approach; anyhow, there is no
cross-appeal. The judge found the following facts. First, at p 5 of the
documents he said this:
The building
is purpose-built as a telephone exchange. It could doubtless be adapted to
other uses, with difficulty, but there are facilities incorporated in it which
are only suitable for a telephone
equipment. There is an engine room which is capable of supplying alternative
electric power for the whole building, there are battery rooms and cable
chambers. This is not a case of a developer not completing a building because
he has no tenant to put in it. It is the very reverse. It is the desire of the
Post Office to bring the building into operation as soon as possible.
Everything they have done has been designed to speed that end and possibly they
have laid themselves open to a liability for rates at an earlier point in time
than might otherwise be the case.
Secondly, at p
6 the judge said this:
In January
1975 the building contract was coming to its end. There was a site meeting on
January 27 1975 between the representatives of the contractor, the Post Office
and the Department of the Environment, at which no representative of the rating
authority was present, when it was expected that the building would be ready to
be handed over very shortly and a tentative handover date of February 17 1975
was agreed on. However, immediately after that meeting problems with the
heating system arose and it became apparent that the tiling would not be
complete by February 17. The problem with the heating system became serious,
and it was clear the building could not be handed over by the contractor until
those problems had been cleared up; and in fact the building was not handed
over until April 17 and 18, which strangely enough were the two days on which
this case was first heard.
Thirdly, the
judge found that the work then remaining to be done was as follows: (a)
electric wiring; (b) a transformer had to be installed: until that was done
there was no permanent or satisfactory supply of electricity to the building;
(c) the installation of the ventilation system; (d) the installation of the
kitchen equipment; (e) the installation of three or four partitions; and (f)
the installation of the telephone equipment itself. The judge said this about
that on p 7:
Lastly we
come to the question of the telephone equipment. This is obviously very
complicated and very expensive. All the cables will have to come through the
main cable tunnel from the Castle Exchange and then through the main
distribution frame. In the building there are going to be a number of different
aspects of telephone work. The exchange is being built to cover future
expansion as well, so it may be 10 or 15 years before the space is fully
utilised. It is intended that the repair service centre (RSC) should be
transferred to the building from the Castle Exchange in February 1976. It is
intended that the directory enquiry facilities should be moved to the exchange
from the Castle Exchange and other outside accommodation in June/July 1976, and
it is intended that automatic telephone equipment should be installed in the
exchange in June 1977. If these dates are achieved the Post Office is to be
congratulated on the speed at which it gets the new exchange equipped.
The judge’s
conclusion appears at p 8 of the documents. He sets out the argument of Mr
Horton, and then says:
It may be
that the draftsmen did not intend to bring about the situation which has arisen
in this case, but I have come to the conclusion that when the building is
completed it will be comprised in a relevant hereditament, albeit only a
technical one, and therefore it is within the schedule and rateable. In effect
I prefer Mr Amies’ more literal approach. I take the view that I have to decide
what time is reasonably required to complete the building, or perhaps more
accurately is required to complete the work remaining to be done which is
customarily done in the case of the Post Office after the building has been
substantially completed. I take into account the completion of the electrical
wiring which will take two to three months. I take into account the supply of
the transformer, because until that transformer is supplied there will be no
permanent supply of electricity and there will not be sufficient power for
instance to work the lifts and other electrical appliances at the same time,
and I also take into account the time required to do the partitioning. I ignore
the provision of the ventilation equipment, the kitchen equipment and the
telephone equipment. The period starts to run from April 18 1975. Work on the
various matters can proceed at the same time, but reasonably some time must be
allowed for contingencies, difficulties in delivery, failure of equipment to
work. I think all this work can be completed in something over three months and
therefore for the purposes of schedule 1 to the General Rate Act 1967 I decide
that the building the subject of the appeal shall be treated as being completed
on August 1 1975.
The question
in this appeal is about the telephone equipment. The relevant statutory
provisions are all contained in the Act of 1967. I have already referred to
section 17. I do not think I need refer to the somewhat cryptic, if not
circular, definition of ‘hereditament’ in section 115 (1). I turn, therefore,
to schedule 1 to the Act. Paragraph 1 (1) of schedule 1 provides:
Where, in the
case of any rating area in which, by virtue of a resolution under section 17 of
this Act, this schedule is in operation, any relevant hereditament in that area
is unoccupied for a continuous period exceeding three months, the owner shall,
subject to the provisions of this schedule, be rated in respect of that
hereditament for any relevant period of vacancy; and the provisions of this Act
shall apply accordingly as if the hereditament were occupied during that
relevant period of vacancy by the owners.
The
definitions of ‘relevant hereditament’ and ‘relevant period of vacancy’ are
contained in paragraph 15 in these terms:
‘Relevant
hereditament’ means any hereditament consisting of, or of 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; ‘relevant period of vacancy,’ in relation to
any relevant hereditament, means, subject to [an irrelevant subparagraph which
deals only with dwelling-houses] any period beginning with the day following
the end of a period of three months during which the hereditament has been
continuously unoccupied and ending with the day preceding that on which the
hereditament becomes or next becomes occupied or ceases to exist.
At first sight
these provisions look rather involved, but the effect is that if a building
remains unoccupied continuously for more than three months it becomes rateable
after that period of three months. I think it is probably convenient while
looking at paragraph 15 of schedule 1 to read the rest of it:
. . . and
references to a newly-erected building or dwelling-house include references to
a building or dwelling-house produced by the structural alteration of a
building included in a relevant hereditament which by virtue of paragraph 10 of
this schedule has ceased or will cease to exist on the completion of the
structural alteration, and in relation to a building or dwelling-house so
produced, references to erection of a building shall be construed as references
to the structural alteration producing it.
In this case,
of course, we are only concerned with a newly-erected building and not with
structural alterations, but as some reliance was placed on the term ‘structural
alteration’ I felt obliged to read that part of the paragraph. Going back to
the beginning of the schedule, paragraph 5 (1) provides:
Subject to
the provisions of this schedule, the rateable value of a hereditament for the
purposes of paragraph 1 thereof shall be the rateable value ascribed to it in
the valuation list in force for the area in which the hereditament is situated
or, if the hereditament is not included in that list, the first rateable value
subsequently ascribed to the hereditament in a valuation list in force for that
area.
Paragraph 7
provides:
For the
purposes of paragraph 1 of this schedule, a newly-erected building which is not
occupied on the date determined under the subsequent provisions of this
schedule as the date on which the erection of the building is completed shall
be deemed to become unoccupied on that date.
At first sight
that looks like an odd use of a ‘deeming’ provision. However, it becomes
intelligible when one realises that the word ‘unoccupied’ there is used in the
technical sense in which it is used in the rest of the schedule, particularly
paragraph 1 (1). The vital provisions for the purposes
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.
Subparagraph
(4) provides:
A person on
whom a completion notice is served may, during the period of 21 days beginning
with the date of service of the notice, appeal to the county court against the
notice on the ground that the erection of the building to which the notice
relates has not been or, as the case may be, cannot reasonably be expected to
be completed by the date specified by the notice.
Subparagraph
(5) provides that if an appeal is brought to the county court ‘the erection of
the building shall be treated for those purposes’ — that is, the purposes of
the schedule — ‘as completed on such date as the court shall determine.’ Paragraph 9 provides:
In the case
of a building to which work remains to be done of a kind which is customarily
done to a building of the type in question after the erection of the building
has been substantially completed, it shall be assumed for the purposes of
paragraph 8 of this schedule that the erection of the building has been or can
reasonably be expected to be completed at the expiration of such period
beginning with the date of its completion apart from the work as is reasonably
required for carrying out the work.
That is, of
course, the work remaining to be done. Paragraph 10 deals with structural
alterations, and provides:
Where by
reason of the structural alteration of any building a relevant hereditament
becomes or becomes part of a different hereditament or different hereditaments,
the relevant hereditament shall be deemed for the purposes of this schedule to
have ceased to exist on the date (as determined in pursuance of the foregoing
provisions of this schedule) of the completion of the structural alterations
and, in particular, to have been omitted on that date from any valuation list
in which it is then included; but nothing in this paragraph shall be construed
as affecting any liability for rates under paragraph 1 of this schedule in
respect of the hereditament for any period before that date.
Mr Glover
relies strongly on the case of Ravenseft Properties Ltd v Newham
London Borough Council [1976] 2 WLR 131. In that case the rating authority
served completion notices alleging that the buildings there in question, two
new office blocks, had been completed on the day specified in the notice. Lord
Denning MR at p 136 stated the facts as follows:
This dispute
depends on the state of the buildings. It has been agreed between the parties
and we have photographs to show it. A big block, A, has 14 storeys of
reinforced concrete construction. The whole of the structure, as a structure,
is no doubt completed. There are large floors all the way up the 14 storeys. On
each of these floors at each end toilets are installed. Central heating and
air-conditioning systems are installed. These vast floors have not been divided
into rooms or offices. There are no partitions in. Each of the 14 floors covers
a rectangular space of 8,385 square feet with nothing there except 10
structural columns in a line. There is a fuse-box on each floor with wiring for
a power circuit. But no points have been installed for any outlets. There was
no wiring for any lighting system. There was no telephone system. No Post
Office cables had been installed. No main distribution frame had been
installed. Application had been made for a telephone line in different places.
But it would be nine months before the telephone can be installed. The main
contest is as to these floors. As I say, they are enormous floors with columns
down the middle but no divisions whatsoever into rooms or into individual
offices. It seems to me that they could not be occupied or ready for occupation
until they have been divided up by partitions and rooms and so forth.
In that case
Ravenseft had appealed to the county court, the appeal had been allowed, and on
appeal by the rating authority to this court the appeals were dismissed. Lord
Denning said this at p 136E:
So there we
have the contest. Newham London Borough say they were complete because they
were structurally complete. Ravenseft Properties Ltd say no, they are not
complete until they are ready for occupation, and they are not ready.
He said again
at p 137G, after quoting paragraph 8 (1) of schedule 1 to the Act:
It seems to
me that the schedule uses the word ‘completed’ there as something different
from ‘structural alteration’ in paragraphs 10 and 15, and from the words
‘substantially completed’ in paragraph 9; and I am impressed by the reference
to paragraph 6 to which we were referred. The word ‘completed’ in paragraph 8
(1) seems to me to mean completed in the sense of being ready for occupation.
The test in this case is that the building should be ready for occupation. Once
it is completely ready for occupation, there is a free period of three months
during which rates are not payable, but after three months rates are payable.
That applies not only to a new building but it applies if there is an
alteration to an old building.
Over the page,
at p 138 between B and C, the Master of the Rolls said:
We had
considerable discussion about the telephone cables and the electric wiring, and
how far an office building could be said to be complete if the electric wiring
had not been completed and the telephones were not installed. I think that may
give rise to difficult questions on which I should like to have further
evidence as to the condition of a particular building before giving any ruling
on that matter.
At first sight
that seems to me to suggest that the Master of the Rolls was leaving open the
question whether or not the absence of electric wiring, and so on, could mean
that the building was not completed, and for reasons which will appear later,
that does seem to me to be what he may have been saying. But Mr Glover told us
that he had consulted counsel who were concerned in that case and had been
informed that that statement was in fact directed to a different point, and
therefore we should not attach too great weight to it. Bridge and James LJJ
agreed that the appeal should be dismissed. James LJ said this at p 138:
It seems to
me that the appeal raises two short points, the first being the meaning to be
given to the words ‘completed’ and ‘completion’ where they appear in relation
to hereditaments in schedule 1 to the General Rate Act 1967. It is a schedule
that is not free from difficulty in construction; and, if I may say so, not
absolutely clear in places. But I see no warrant whatsoever for importing the
word ‘structural’ into paragraph 8 of that schedule merely because that word
appears in paragraph 10, and there should be the same test for completion in
respect of newly-erected buildings as for hereditaments which have already been
on the valuation list and are subjected to structural alterations, so that they
become different or different parts of hereditaments. It seems to me that to
adopt that construction, which is the basis of Mr Fay’s argument, strains the
meaning of the statutory words. On the other hand, if one looks at the
provisions set out below, one finds there strong indications all pointing to
the test for which the ratepayers contend in this case, namely, that the test
of completion is capability of occupation and that is the test to be applied to
a newly-erected hereditament.
James LJ then
referred to a number of statutory provisions, and on p 140, just below letter
B, he said this:
One looks
forward at the time, in considering a newly-erected hereditament, to the type
of hereditament which is being required and sees whether at the date of the
notice there is anything lacking which ought to be there in order to satisfy
the nature of that hereditament. If there is something lacking and that which
is lacking would, when done, fall to be part of the hereditament and taken into
account for the purposes of the valuation, then there is no completion in the
sense of capability of occupation.
Bridge LJ said
lower down on the same page:
The essential
question for decision is what is the appropriate test to be applied under
paragraph 8 of schedule 1 to the Act as to when a building is properly regarded
as completed. The key phrase in the paragraph, in my judgment, is the phrase
‘and that the building is, or when completed will be, comprised in a relevant
hereditament.’
He then read
the definition of ‘relevant hereditament’ in paragraph 15 of schedule 1, and
continued:
Bearing in
mind that, under the law as it stood for centuries before unoccupied property
became capable of rating, occupation was always the test of liability, I
should, if I were construing this provision without having regard to its wider
context, say without hesitation that what was contemplated was that the
building should be completed so as to be capable of occupation for the
appropriate purposes of the particular hereditament, that is, as a house, shop,
office, etc. If the building lacks features which before it can be occupied
will have to be provided and when provided will form part of the occupied
hereditament, and form the basis of the valuation of that hereditament, then I
would take the view, unless constrained to the contrary, that that building was
not within the meaning of the relevant provision a completed building.
Bridge LJ then
referred to Mr Fay’s argument, Mr Fay appearing for the rating authority in
that case, and at letter H on p 141 said:
In the light
of these considerations I come to the conclusion that capability of occupation
is the test of completion which should be applicable both under paragraph 8 to
a new building and under paragraph 10 to a new hereditament which comes into existence
by structural alteration of an old building.
Mr Glover
submits that the hereditament with which we are concerned will not be capable
of or ready for occupation for the purposes of this particular
hereditament–that is, as a telephone exchange–until it is capable of being
occupied for at least some or one of the purposes of a telephone exchange, and
this will not be until at least some of the telephone equipment has been
installed. He asks us to reject the qualification made by James and Bridge LJJ which
I have read, namely, that what has to be done would fall to be part of a
hereditament and taken into account for the purposes of valuation. He submits
that the test is not whether or not the equipment to be installed is part of
the hereditament or is rateable plant or equipment within what are now section
21 of and schedule 3 to the 1967 Act and the current plant and machinery rating
order, but whether they are essential to the operation of the building as a
telephone exchange. He submits that until this equipment has been installed
neither paragraph 8 nor paragraph 9 of schedule 1 applies. He says, rightly,
that until the legislation of 1925 a factory was valued for rating as it stood,
including all the plant and machinery in it (see Kirby v Hunslet Union
[1906] AC 43), and he submits that the subsequent legislation is concerned only
with the value of plant and machinery and not with the definition of the
hereditament. He further submits that the mischief with which schedule 1 was
intended to deal was the leaving unoccupied by their owners of buildings which
are capable of immediate occupation in the old rating sense, and that this case
is not within that mischief. Mr Rippon relies on what James and Bridge LJJ said
in Ravenseft, and says that the real distinction is between the work
remaining to be done on the building itself and work to be done on plant and
equipment or the installation of furniture. He stresses the references to
‘building’ throughout schedule 1.
It may well be
that under the law as it was before 1966 the Post Office were not on August 1
1975, or for some time thereafter, in rateable occupation of this building
(see, for example, Arbuckle Smith & Co Ltd v Greenock Corporation
[1960] AC 813). But it is clear that the 1966 legislation, now re-enacted in
the 1967 Act, was intended to make a fundamental change in the law. I think one
is driven back to the wording of schedule 1. I say at once that I cannot find
in that wording any indication that the effect of the schedule is intended to
be limited to the mischief suggested by Mr Glover: and this argument was in
effect rejected by the Divisional Court in Easiwork Homes Ltd v Redbridge
London Borough Council [1970] 2 QB 406. Paragraph 8, subparagraphs (1), (4)
and (5) all refer to the date when ‘the erection of a (or ‘the’) building will
be completed.’ Paragraph 8 (1) (b)
refers to ‘the work remaining to be done on a building . . . such that
the erection of the building can reasonably be expected to be completed. . .
.’ The second requirement of paragraph 8
is that ‘the building is, or when completed will be, comprised in a relevant
hereditament’; the definition of ‘relevant hereditament’ in paragraph 15 is
confined to buildings. Paragraph 9 also refers throughout to ‘a building,’ and
to ‘a building to which work remains to be done of a kind which is
customarily done to a building of the type in question after the
erection of the building is substantially completed. . . .’ The emphasis throughout is on ‘a’ or ‘the’
building, and on work to be done ‘on’ or ‘to’ it. In my judgment, the effect of
these provisions, as interpreted by this court in Ravenseft, 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 is intended–as a house, shop, office, factory or, in this case, a telephone
exchange. In Ravenseft this court held that the building there in
question was not capable of occupation or ready for occupation as offices,
mainly, as I understand it, because the partitions had not been installed. They
clearly did not hold that the building would not be completed, in the sense of
being capable of being occupied as offices, until all the furniture and
equipment necessary for its actual occupation and use as offices had been
installed. When that stage is reached, the offices would be in rateable
occupation in the pre-1966 sense, and if they were not ‘completed’ for the
purposes of schedule 1 until then, there would be no scope for the provision as
to the rating of unoccupied buildings. The position would be the same as to
this telephone exchange if Mr Glover is right.
I am very
reluctant to introduce into the questions to be decided under schedule 1 the
extremely difficult and complicated questions which arise under the legislation
as to the rating of plant and machinery. In my judgment, those provisions are
not relevant under schedule 1; they were enacted in a quite different context
to deal only with valuation problems. James and Bridge LJJ in Ravenseft
did not refer to this legislation; nor did Bridge J (as he then was) in the
earlier case of Watford Borough Council v Parcourt Property
Investment Co Ltd (1971) 17 RRC 19: in that case he decided that the
building was not completed because the partitions were not completed, and left
open the question whether the lack of electrical fittings and fixtures rendered
it incomplete (see p 27). Partitions may in some cases be ‘plant’ (see for
example Jarrold v John Good & Sons Ltd [1963] 1 All ER 141);
and if so they are non-rateable plant: electrical fixtures and fittings would,
I think, normally be non-rateable plant or equipment. If in either of those
cases the court had thought that the provisions as to the rating of plant or
machinery were relevant, they would have had to consider the status of the
partitions, the electrical wiring, the fixtures and fittings, and the telephone
equipment under those provisions, and as they did not do so I think they must
have thought those provisions irrelevant. On the facts of Ravenseft it
must have been held, or assumed, that under the general law at least the
partitions would when completed be part of the hereditament and taken into
account in the valuation. If what was said by James and Bridge LJJ was intended
to go further than what was necessary for the facts of that particular case and
lay down any wider general principle, I think, with respect, that it was
obiter. Nor do I think it necessary to introduce into this context the highly
technical problems of when articles brought on to land do or do not become part
of the freehold.
In my
judgment, in deciding under schedule 1 whether a building is, or will be,
completed on some date a broader commonsense test must be applied. I think the
test is: as a matter of fact and degree, is, or will be, the building, as a
building, ready for occupation, or capable of occupation, for the purpose for
which it is intended? For example, I
think that in the present case the county court judge was entitled to find that
the building would not be completed until the transformer and the electric
wiring had been installed, whether those items in themselves are or are not
rateable plant or machinery, because until these had been installed the
building, as a building, was not ready for occupation. I should myself be
inclined to think (without deciding) that the same would apply to the
ventilation system, but this is of no practical importance in this case,
because the judge found that its installation would be completed by about
August 1 1975. The vital distinction, I think, is between the time when the
building is ready for occupation as a building, and the subsequent installation
in it of equipment or furniture which is necessary for its use for the purpose
for which it is intended. The county court judge did not have the advantage of
knowing the decision in Ravenseft, but in my view he applied in
substance the same test as that laid down by this court in that case. I think
that his findings of fact amount to a finding that on August 1 1975 this
building, as a building, would be capable of occupation or ready for occupation
as a telephone exchange, even though it could not actually be used as a
telephone exchange until further equipment had been installed, and that this
finding is fully justified by the evidence. I would dismiss this appeal.
CAIRNS LJ: I
agree that this appeal should be dismissed for the reasons which have been
given by Browne LJ. I will express my own conclusions briefly in my own words.
The whole issue is whether a building intended to be occupied as a telephone
exchange is complete within the meaning of schedule 1 to the General Rate Act
1967 only when it is equipped for use as a telephone exchange, or whether it
can be so complete at an earlier stage. I see no reason for giving to the word
‘complete’ where it is used in this schedule any other meaning than it would
bear when used in ordinary speech of a building. Since there might be some
uncertainty as to whether a building could be said to be complete when it is
substantially complete or only when additional work which would customarily be
done to it after it is substantially complete has been done, paragraph 9 makes
it clear that the latter meaning is to be adopted. Paragraph 9 refers to work to
the building, not work in the building, I cannot accept the proposition
that a building intended for a telephone exchange is only complete when it is
capable of immediate use as a telephone exchange. If that were the test, a
house could not be said to be complete until it had been furnished, or a
factory until the necessary tools for use in it were available.
When the
Master of the Rolls in the Ravenseft case referred at pp 135 and 137 to
the building being ‘ready for occupation,’ I am sure that he did not mean that
it must be so equipped that use for the intended purpose could be begun
immediately. The same applies to the phrase ‘capable of occupation’ used by
James and Bridge LJJ. If the building is, in the ordinary sense, complete, so
that it is ready to be equipped for the intended purpose by introducing some
equipment which is not to be part of the building, then in my opinion the
building is ready for occupation for that purpose. When James LJ referred at p
140 to ‘something lacking which when done would fall to be part of the hereditament,’
I do not think he intended to include something which might be deemed to be
part of the hereditament for the purpose of valuation. This is perhaps still
clearer in the judgment of Bridge LJ at p 141, where he used the words ‘if the
building lacks features which before it can be occupied will have to be
provided. . . .’ I am satisfied that the learned judge was right in regarding
at least the kitchen equipment and telephone equipment as not being work which
was reasonably required to be done to complete the building or work which
remained to be done to the building. Unless he erred as to these matters, it
cannot be said that he arrived at any wrong conclusion about the time of
completion.
SIR GORDON
WILLMER: I agree with both the judgments which have been delivered, and I do
not seek to add anything of my own except to express, I hope without causing
offence, some sense of regret that it has been found necessary for two public
corporations to incur the expense of ventilating this dispute in court, the
costs of which will no doubt have to come out of public funds, whether by way
of rates or taxes.
The appeal
was dismissed with costs. Leave to appeal to the House of Lords was refused.
