Valuer – Remuneration – Contract to negotiate reductions in rateable value of property in rating list – Fee payable as percentage of reduction achieved – Whether fee payable where reduction not effective for entire five-year period of list – Appeal allowed
The appellant owned and operated a restaurant in Islington, London N1. In 1999, he retained the respondent firm of valuers to act for him in seeking reductions in the listed rateable value of the property in respect of the 1990 and 1995 lists and the forthcoming 2000 list. The contract was on a “no reduction, no fee” basis. Payment in respectof the 2000 list was to be calculated at 25% of any reduction obtained in respect of the “Rateable Value to be implemented 1/4/2000”. At the date of the contract, the rateable value for the property was £51,000 for the five-year period from 1995 to 2000. From April 2000, the local council increased the listed value to £75,750 for the forthcoming five-year period. The respondent applied for a reduction.
In February 2001, unknown to the respondent, the rateable value was further increased to £76,750. In March 2001, the appellant sold the property. In April 2002, the respondent reached an agreement with the valuation officer reducing the rateable value to £65,000 from April 2000. The respondent brought proceedings to recover a fee from the appellant on the basis that the reduction applied to the entire five-year period from 2000 to 2005.That claim succeeded in the court below. However, on an appeal by the appellant, further evidence was admitted to show that, owing to the further increase in rateable value prior to the agreement, the reduction took effect only in respect of the 10 months from April 2000 to February 2001, after which the valuation of £76,750 applied. The appellant submitted that no fee was payable in circumstances where the reduction obtained did not apply to the entire five-year period of the list and did not affect any variations that were made during that period.
Held: The appeal was allowed.
The contract between the parties contemplated that, in normal circumstances, the respondent would negotiate a reduction for a five-year period. If the respondent achieved a reduction and the valuation officer subsequently increased the rateable value during the five-year period, the respondent would still be entitled to its fee. In calculating the increase, the valuation officer would be bound to start from the reduced value and the respondent would thereby still have achieved a reduction that would be effective for five years. However, the respondent had not achieved a reduction in respect of the entire five-year period in circumstances where it had agreed a reduction only after a further increase had been imposed without its knowledge. In those circumstances, it had achieved a reduction for 10 months only, since the subsequent increase had not been reduced by reference to the reduction achieved for the first 10 months. Although that was not the fault of the respondent, it had not earned its fee.
The respondent could not establish any entitlement to its fee on the basis that the appellant should have known of the further increase and should have informed it of the rise. There were difficulties in implying a term imposing on the appellant positive duties to seek out and obtain information, given that the contract placed no obligation but only a right upon the respondent to negotiate reductions. The appellant would not necessarily have known whether the respondent was proceeding with the appeal for the 2000 to 2005 period.
Nik Yeo, acting pro bono, appeared for the appellant; David Hoffman (instructed by Gorvins, of Manchester) appeared for the respondent.
Sally Dobson, barrister
