Non-domestic rates – Alteration of rating list – Proposal – Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 – Respondent ratepayer submitting proposal to alter rating list in respect of commercial premises – Annual rent incorrectly stated in proposal form – Appeal against rejection of proposal – Whether appellant valuation officer entitled to assert invalidity of proposal by reason of error on form where no invalidity notice previously served – Appellant held to be acting unreasonably in public law – Proposal treated as valid – Appeal allowed
The respondent, as the occupier of commercial premises in Thornton Heath, Surrey, submitted a proposal to alter the entry for the premises in the 2010 rating list. On its proposal form, it wrongly stated that the current annual rent for the property was £9,500; in fact, the rent was £10,000, as subsequently found by the Valuation Tribunal for England (VTE) when hearing the respondent’s appeal against the rejection of its proposal.
In relation to that appeal, the appellant contended that the misstatement of the rent rendered the proposal invalid for failure to comply with regulation 6 of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009. The VTE decided that: (i) the appellant was entitled to raise the invalidity point at the hearing notwithstanding that she had not issued an invalidity notice under regulation 8 in respect of it; (ii) the mistake as to rent potentially made the proposal invalid; but (iii) it should none the less be treated as valid since, in the circumstances of the case, the appellant’s attempt to claim invalidity was unreasonable and irrational and therefore unlawful under public law.
On that issue, it applying the analysis that it had made in another case, Imperial Tobacco Group Ltd v Alexander (VO), which was heard together with the appeal. It considered that the appellant had a discretion, under regulation 8 of the 2009 Regulations, whether to issue a notice of invalidity or treat the proposal as valid and that, where no notice was issued, the discretion persisted and the appellant was not bound to raise invalidity at a later stage. It took the view that where, because of information previously supplied by the respondent, the appellant knew the rental figure in the form to be a mistake and was in possession of the correct figure, it was pedantic and formalistic of her to rely on that mistake as invalidating the proposal. The appellant appealed.
Held: The appeal was allowed.
The appellant had been entitled to raise the invalidity point notwithstanding that no invalidity notice had been served. Whether an error in a proposal rendered the proposal invalid was a matter for determination by the VTE or the Upper Tribunal on appeal. Compliance with regulation 6(3) of the 2009 Regulations required an accurate statement of the yearly rent in the proposal form. Whether a proposal would be invalidated by an error in the stated rent would depend on two factors, namely whether there had been substantial compliance with the regulation and whether the error had caused any prejudice to the valuation officer. In the instant case, the significant error of 5% in the statement of the annual rent did not amount to substantial compliance with the regulation and had also prejudiced the appellant. As contended by the appellant, there was a strong public policy reason to place the burden on the proposer to provide accurate information upon the crucial point of the current rent. Otherwise, a valuation officer might rely on incorrect information or be put to substantial work in researching the matter, and, since a proposal was a public document that could be viewed by members of the public on a register, understatement of the rent might encourage others to make proposals in respect of similar properties in the mistaken belief that the rent stated in the proposal was accurate. Consequently, the error as to rent in the respondent’s proposal form rendered the proposal invalid.
The question to be decided by the VTE on the appeal was whether the proposal had been validly made. It was not for the VTE routinely, and in the absence of any such argument raised by the proposer, to consider a public law point as to whether the valuation officer was precluded from asserting invalidity in relation to a proposal that had not been validly made. In the instant case, where the proposal was not validly made by reason of a substantial non-compliance with regulation 6 causing prejudice to the appellant valuation officer, the appellant had been entitled to assert that invalidity. The VTE was wrong to find that the appellant had acted unreasonably in so doing. Although a valuation officer might become estopped from taking an invalidity point in certain circumstances, no such circumstances arose in the instant case. The VTE had not proceeded on a factually correct foundation in deciding the case. The appellant had not in fact known the true rent but had merely suspected that the proposal might have contained an inaccurate statement of the yearly rent; she was therefore unaware of the true yearly rent at any time prior to the VTE deciding as a fact that it was £10,000.
It was difficult to imagine circumstances in which: (i) there was an error in a proposal which resulted in there not being substantial compliance with the regulations and in there being prejudice to the valuation officer; (ii) there was no estoppel precluding the valuation officer from taking the invalidity point; but (iii) the valuation officer was none the less acting unreasonably and unlawfully in taking that point. Such a public law point could not, in any event, properly be considered by the VTE where no such point had been raised by the proposer. If the proposer did raise such a point, a jurisdictional question would then arise as to whether such an argument could be considered by the VTE or whether it had to be raised in the Administrative Court; it was not necessary to decide that point for the purposes of the present appeal.
David Forsdick (instructed by the legal department of HM Revenue and Customs) appeared for the appellant; the respondent did not appear and was not represented.
Sally Dobson, barrister
