General Rate Act 1967, section 17 and Schedule 1 as amended by Local Government Act 1974–Rating of unoccupied property–Appeal against issue of distress warrant in respect of non-payment of rates on newly-built warehouses–Various technical points taken by appellants rejected–Council’s resolution under section 17 bringing Schedule 1 into operation a sufficient specification of the proportion of the rate required–Submission that completion notice was not received in time not accepted–Submissions that service of completion notice and institution of distress proceedings had not been properly authorised by resolution also rejected–Contention that rates could not be properly demanded as properties were not in valuation list likewise rejected–Principle of B Kettle Ltd v Newcastle under Lyme Borough Council applies to unoccupied as well as to occupied property–Appeal dismissed but leave to appeal to Court of Appeal granted–Possibility of authorities binding on Divisional Court being challenged in Court of Appeal
This was an
appeal to the Divisional Court by case stated from a decision of Cambridgeshire
magistrates authorising the issue of a distress warrant in respect of
non-payment of rates on nine empty warehouses at Trafalgar Way, Bar Hill,
Cambridgeshire, owned by the appellant company, Bar Hill Developments Ltd, a
subsidiary of the Trafalgar House Group.
C Lewsley
(instructed by Ashurst, Morris, Crisp & Co) appeared on behalf of the
appellants; W J Glover QC and J Grove (instructed by Sharpe, Pritchard &
Co, agents for Barr, Ellison, of Cambridge) represented the respondent council.
Giving the
first judgment at the invitation of Lord Widgery CJ, EVELEIGH LJ said: This is
an appeal by way of case stated against a decision of the justices for the
County of Cambridgeshire authorising the issue of a distress warrant in respect
of non-payment of rates in relation to nine warehouses situated at Trafalgar
Way, Bar Hill, Cambridgeshire. The warehouses were newly built. On October 18
1973 the authority had passed a resolution in accordance with section 17 of the
General Rate Act 1967 that the provisions of Schedule 1 to the Act with respect
to the rating of unoccupied property should apply. The amounts demanded in
respect of the warehouses covered the period from March 1 1977 to March 31 1977
for the rating year 1976 to 1977 and also for the whole of the year 1977 to
1978. All the hereditaments concerned were owned by the appellant company and
they were unoccupied at all material times. The authority demanded one half of
the amount that the appellants would have had to pay if the company had been in
occupation of the hereditaments.
On November 29
1976, as the magistrates found, a letter was sent to the appellant company
dated November 29 in the
Act 1967 I hereby give notice that I consider the following warehouse units on
the above named site to be completed on December 1 1976.’ Then the numbers are set out. ‘This means
that as this authority has resolved to rate empty property under the provisions
of section 17 of the above Act an empty rate charge will become due on March 1
1977 if the premises are still unoccupied on that date.’ That letter was posted, according to the
evidence given of the office procedure, on November 29, the evidence being that
the letter would be sent on the day on which it was typed and dated. The
evidence–I quote from the case–purported to be given by Martin Mortimer, a surveyor
called on behalf of the company, was that the letter may not have been received
until December 3. He did this by producing a photostat of the letter with a
date stamp ‘3 December 1976.’ He was
unable to produce the original. The magistrates held that the letter arrived in
effect on or before December 1. I shall turn later to the relevance of those
findings and the way in which they are challenged in this court.
A large number
of points are raised in the stated case, not all of which have been pursued in
this court, because counsel for the appellant has conceded that there are
authorities against him which are binding in this court, and I do not propose
to refer to any of those matters.
The first
point with which this court had to deal was a contention that was based upon
the wording of paragraph 1, subparagraph (2) and subparagraph (2A) of Schedule
1 to the General Rate Act 1967 as amended. Subparagraph (2) reads:
Subject to
the provisions of this schedule, the amount of any rates payable by an owner in
respect of a hereditament by virtue of this paragraph shall be the specified
proportion of the amount which would be payable if he were in occupation of the
hereditament.
Subparagraph
(2A) reads:
In
subparagraph (2) above ‘the specified proportion,’ in relation to a
hereditament, means such proportion (which may be the whole or any less amount)
as may be specified for the purposes of this subparagraph by a resolution of
the rating authority for the rating area in which the hereditament is situated.
On behalf of
the appellant it is argued that to specify the proportion of the rate required
a resolution of the council and there had been no resolution in this case.
The history of
the legislation is as follows. Originally paragraph 1 subparagraph (2) of the
Schedule was differently worded. It read as follows:
Subject to
the provisions of this Schedule, the amount of any rates payable by an owner in
respect of a hereditament by virtue of this paragraph shall be one-half of the
amount which would be payable if he were in occupation of the hereditament.
The effect of
the resolution of the council in 1973 was to bring Schedule 1 into operation on
April 1 1974. A few days after that the Local Government Act 1974 came into
effect and that amended the wording of Schedule 1 by introducing the procedure
for a proportion to be determined instead of the former fixed amount of one
half.
On that
history of the legislation one comes to consider the submissions made on behalf
of the appellants. Is it a valid argument to say there was no specified
proportion? I myself have come to the
conclusion that there was a specified proportion and the words of section 17(1)
must be borne in mind–‘A rating authority may resolve that the provisions’–in
the plural–‘of Schedule 1 to this Act . . . shall apply.’ The provisions that existed at the date of
the resolution in 1973 were the old provisions in subparagraph (2) in so far as
is relevant to this agreement, and in my opinion the council were resolving that
all of the provisions of Schedule 1 should apply.
It is argued
that the proportion of 50 per cent was not specified by the authority itself
but had been specified by Parliament and it is submitted that this is not
enough to satisfy the requirements of the amended subparagraphs (2) and (2A). I
cannot accept that submission. I feel confident that Parliament would not
intend the local authority to review everything that had been done up to that
date and, as it were, start afresh. New powers were given by the amended
Schedule, but by their act of resolving to adopt the provisions (in the plural)
of the Schedule the authority were, as I see it, themselves adopting that
figure of 50 per cent. It is true they could not have adopted any other figure,
but they need have adopted no figure at all. They could have decided not to
invoke section 17 of the Act and leave it at that. For those reasons I would
reject the first contention with which this court has had to deal.
The second
contention is to the effect that the letter of November 29 was not posted in
time. The relevance of the time appears from the provisions of paragraph 8 of
the First Schedule. It reads as follows:
(1) 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.
From those
last words it is clear that if the letter had been received after December 1,
it would have been invalid for the purpose for which it was intended.
Now, the
magistrates heard evidence on that point. They accepted clearly that the
evidence of system that was tendered on behalf of the authority was such as to
satisfy them of the date of posting. They then reminded themselves or were
reminded of the provisions of the Interpretation Act. Section 26 of the
Interpretation Act 1889 provides that service of a notice shall be deemed to
have been effected at the time at which the letter would be delivered in the
ordinary course of post unless the contrary was proved. The stated case reads:
‘It was not so proved to our satisfaction’–that is, the contrary was not so
proved.
Evidence was
given, as I have said, by a surveyor and a slightly more detailed version of
his evidence has been put before the court, that version having been agreed by
counsel. It was this: ‘When post arrives at appellants’ office it is stamped
with the date of arrival. Original completion notice has been lost but the date
stamp on the photocopy reads ‘3rd December 1976′ which looks like the date
stamp used in our office.’
It is clear
from the way in which the stated case reads that the magistrates were not very
much moved by that evidence. Just why, of course, does not appear, but in order
to succeed in appealing against that finding of fact, counsel, as indeed he
recognises, has to demonstrate to this court that the finding was one which no
reasonable bench could arrive at on the evidence before them. I take the view
that the bench were, on the evidence before them, entitled to come to the
conclusion they came to. They obviously placed more weight on the evidence of
posting than they did on the evidence of receipt, and for a variety of reasons
they were entitled so to do, and one of the reasons which may be mentioned was
that Mr Mortimer, who gave the evidence, used the expression ‘looks like the
date stamp used in our office’ and another was that the original document had
been lost. There are other considerations that come to mind and need not be
specified which would entitle the magistrates to arrive at their decision. For
those reasons I would reject the second point argued before us also.
The third
point raised was to the effect that the letter of completion was invalid on
another ground, namely that it
was in fact sent by Mr Howell, who was the senior rating assistant of the
authority, who wrote the letter on his own initiative, but acting in accordance
with the duties on which he was employed. So it is clear that there was no
special resolution relating to this particular letter.
Counsel for
the appellant has relied, in the first instance, on the specific wording of
paragraph 8(1) of Schedule 1 which I have just read in connection with the date
of receipt. He emphasises the words, ‘Where a rating authority are of
opinion.’ He then has referred the court
to section 101 of the Local Government Act 1972. Subsection (1) of that section
reads: ‘Subject to any express provision contained in this Act or any Act
passed after this Act, a local authority may arrange for the discharge of any
of their functions–(a) by a committee, a subcommittee or an officer of the
authority.’ If one were to pause there
it would appear that even if this opinion was one the formation of which was a
function for the council to perform, it was a function that could be delegated.
Counsel then
referred to subsection (6), which reads as follows: ‘A local authority’s
functions with respect to levying, or issuing a precept for, a rate or
borrowing money shall be discharged only by the authority.’ He also referred to subsection (12), which
reads: ‘References in this section and section 102 below to the discharge of
any of the functions of a local authority include references to the doing of
anything which is calculated to facilitate, or is conducive or incidental to,
the discharge of any of those functions.’
It is argued
from those subsections that this case falls within subsection (6). It is said
that the decision to send the letter with a date of completion is a function
with respect to levying a rate and one therefore has to see what that word
‘levying’ a rate means. In my judgment the word ‘levying’ a rate is one that
can be given various shades of meaning depending on the Act or section of the
Act where it is to be found. But in the General Rate Act itself one finds the
expression in section 1(4): ‘All powers and duties in relation to the making,
levying and collection of such rates,’ so that the powers of an authority in
relation to rating would include making, levying and collection. But a great
number of activities are involved when rating powers are brought into play and
in particular when a rate is levied. It seems to me that subsection (6) cannot
of itself refer to every single aspect of a local authority’s actions that may
have some effect upon the rate. What we are concerned with under subsection (6)
is a decision as to the levying of the rate in a general way on a broad policy
front and it does not in my opinion relate to the liability of a particular
hereditament to be rated.
On behalf of
the appellants it is said that we are concerned with a matter of detail because
of the provisions of subsection (12) which I have just read. I cannot accept
that argument. I regard subsection (12) as relating back to subsection (1) and
applying to cases where the council can delegate, not to subsection (6) which
states when a council may not delegate. Subsection (1) of section 101 permits
the council to delegate its function in a broad way and subsection (12) is
making it clear that it is not merely the function that may be delegated but
all incidental matters necessary for that function to be performed.
However, there
is another answer to this submission, as I see it, because paragraph 8 is
providing a method of determining when a building falls within the description
of an unoccupied building because it is necessary to decide that in order to
discover the date at which the period referred to in paragraph 1 of Schedule 1
begins to run. This is made clear when one reads subparagraph (7), which is as
follows:
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.
The subsequent
provisions include, of course, paragraph 8, and paragraph 8 brings into
existence provisions for the purpose of determining the date on which the
erection of a building is completed and paragraph 8 itself provides that it is
to be treated as completed on the date of the service of the notice or such
later date as may be specified in the notice. So that paragraph is not to be
regarded as the levying of a rate in any way, as I see it. It is merely a way
of determining one of the essential facts that has to be established before the
provisions of Schedule 1 can be applied.
The next
submission was that the proceedings themselves, that is the proceedings for the
warrant of distress, were not authorised by resolution. It is argued that to
bring those proceedings amounts to a levy and therefore a resolution is
required. Reliance was again placed on section 101 subsections (6) and (12). I
for my part think there is a short answer to this. Those proceedings are not
the levying of a rate, they are proceedings for the recovery of the amount due
as rates in respect of the particular hereditament. Further, I would also
repeat the observations I have made upon the real effect of subsection (6) and
subsection (12) of section 101.
Finally, it is
said that this property was not in the valuation list and therefore no rates
could be demanded. It is true that at no relevant time were the properties in
the valuation list. There was a proposal, however, and that proposal was being
appealed. Counsel has referred us to paragraph 5(1) of Schedule 1. That reads
as follows:
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.
It is said
that the effect of that paragraph is that if a hereditament is not included in
the list there can be no rateable value and there can be no rate demanded in
respect of that property. It must be borne in mind that the making, the levying
and collection of rates is a matter dealt with in the Act itself. The Schedule
gives detailed provisions to enable effect to be given to a decision of the
authority to make, levy and collect the rates. The Schedule does not restrict
the Act. What it does do is to develop the provisions of the Act and to provide
ways of determining certain matters which are essential for the implementation
of the Act’s provisions.
Counsel has
conceded in this case that section 6 of the Act allows a rate to be recovered
although the premises are not in the valuation list, but he claims that it is
only possible in respect of occupied property. I will not, in this extempore
judgment, go into a detailed examination of the case which has caused counsel
to make that concession, if indeed he is not constrained to make it on the very
wording of section 6. It is the case of B Kettle Ltd v Newcastle-under-Lyme
Borough Council (1979) 251 EG 59 decided in the Court of Appeal. Suffice it
to say that the wording of the section itself shows that not always is it
envisaged that there must be actual entry in a valuation list before rates can
be demanded. A proposal by the valuation officer is a sufficient foundation for
the valuation. At a subsequent date it may be that that valuation is challenged
by one party or another and is then varied. The Act then provides that
adjustments may be made, but it is clear that the rates based upon that initial
proposal must be paid in the first instance. Then, as I have said, the matter
can be adjusted later in the event of a dispute as to the proposed rateable
value. So that the actual recovery is provided for in the Act itself in the
very detailed provisions of the Act particularly relating to what is to happen
when a proposal is made. I do not think it is necessary in this case to go into
that, [1979] 2 EGLR 100; I mention it simply to indicate that the Act itself
contains the power to demand rates although the property is not in the list. I
see nothing in the Act to indicate that that situation is
section 17 is itself part of the Act and that of course relates to unoccupied
property. The Schedule should not be allowed to limit the effect of the
sections of the Act itself. Nor do I think that the Schedule in any way
attempts to do so. What one finds in the Schedule, and in paragraph 5 in
particular, is a number of different tests to be applied where appropriate to
determine the rateable value. I have not read the whole of paragraph 5. There
are other situations dealt with there. It may be that in a given case, perhaps
the present one, there is no need to rely on one of the tests set out in
paragraph 5 because the Act itself covers the case and one has all the
necessary material at one’s disposal to found the demand for rates. Such was
the case on the facts of the case stated here in my opinion, and paragraph 5 of
the Schedule in no way invalidates the demand that was made.
For those
reasons I would dismiss this appeal.
LORD WIDGERY
CJ and WOOLF J agreed.
The appeal was dismissed with costs. Leave was given
to appeal to the Court of Appeal.
