Non-domestic rating – Alteration of list – Valuation tribunal determining rateable value of aerodrome on basis of incorrect finding as to area of two hangars – Appellant valuation officer subsequently altering list on ground of material change of circumstances consisting of removal of certain portable buildings – Appellant substituting rateable value reflecting not only removal of buildings but actual size of hangars contrary to tribunal’s earlier finding – Appellant’s decision reversed on ground that no jurisdiction to disturb tribunal’s earlier finding – Whether appellant having power to decide as he did – Appeal allowed
In March 2008, the valuation tribunal allowed a ratepayer’s appeal against an entry in the non-domestic rating list that showed an aerodrome on an 80 ha site in Maidenhead, Berkshire, with a rateable value of £100,000 with effect from April 2005. The tribunal determined that the rateable value should be reduced to £62,250. In reaching its decision, it erroneously found that the area of each of the two large aircraft hangars on the site was 217.9 m², whereas the hangars were actually much larger with an area of approximately 910m2 each. The appellant valuation officer (VO) proceeded to alter the rating list in accordance with the VT’s decision, and later accepted a proposal by the ratepayer to merge an office building with the aerodrome assessment at a combined rateable value of £67,000 from October 2007.
In October 2009, the ratepayer sought a reduction in the proposed rateable value for the aerodrome included in the draft 2010 rating list, on the grounds that the appellant’s assessment assumed the hangars to be 910.4m2, contrary to the V’s previous finding on the matter, and also that two portable buildings on the site had been removed. The appellant responded by altering the 2005 list with effect from April 2009 to take account of the removal of the portable buildings but maintained his assumption as to the area of the hangars. The result was that he increased the rateable value of the aerodrome in the 2005 rating list to £81,850 with effect from April 2009, that being the date on which the material change of circumstances consisting of the removal of the portable buildings had occurred.
The appellant’s decision was reversed on an appeal to the president of the Valuation Tribunal for England, who held that the appellant was constrained by the previous valuation tribunal decision which definitively established, subject only to any review, correction or appeal, the rateable value of the hereditament during the life of the rating list to which the decision related; accordingly, the appellant could only reassess or revalue the hereditament to the extent of the material change of circumstances. The appellant was ordered to alter the value of the aerodrome in the list to £66,000 with effect from April 2009. The appellant appealed.
Held: The appeal was allowed.
The appellant had been entitled to alter the rateable value of the hereditament so as to correct the previous error made by the valuation tribunal over the area of the hangars. That power did not arise from the duty of a VO to maintain an accurate list: R (on the application of Corus UK Ltd) v Valuation Office Agency [2001] EWHC Admin 1108; [2002] RA 1 considered. A VO was not required, whenever it came to his attention that the list was inaccurate, to take steps to correct it even where those steps involved an alteration to an entry determined by the valuation tribunal on a decision within the life of the same list. Once the tribunal had determined the rateable value of the hereditament, in accordance with the procedures laid down by the 1988 Act, the valuation officer could not proceed on the basis that the rateable value was wrong. The only route for establishing that such a rateable value was wrong was by pursuing an appeal to the Upper Tribunal, or possibly by inviting the valuation tribunal to review its own decision on the basis that it had been arrived at on a mistaken understanding of the facts. Unless a material change of circumstances provided a basis for a reconsideration of the entry in the list, the VO was bound to accept the entry, whatever doubts he harboured about it, because his duty to maintain an accurate list existed within a hierarchical framework of adjudication and appeal which he was bound to respect. It would undermine the whole system of appeals if the VO could substitute his own view of the “correct” rateable value whenever he was satisfied that a decision of the valuation tribunal was erroneous for whatever reason.
However, where the VO became aware of a material change of circumstances, he was under a duty to alter the rating list to reflect the new rateable value in light of that change. Giving effect to the VO’s duty to maintain an accurate list, the statutory scheme permitted the VO to make alterations by analogy with the grounds for making a proposal listed in regulation 4(1) of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009. Once the VO’s duty to reconsider the entry in the list was engaged by his becoming aware of a material change of circumstances, and where the current entry was a result of a tribunal decision, the VO was not bound to adopt the view taken by the tribunal on questions of fact but was duty-bound to value the hereditament in accordance with the provisions of para 2 of Schedule 6 to the Local Government Finance Act 1988. His task was not just to assess the sum that had to be added or taken away from the previous rateable value to reflect the impact of the change of circumstances; rather, he was under a duty to value the hereditament as it currently existed in light of the change. In most cases, the starting point would be the original entry in the list, and the appropriate method of applying the statutory criteria in light of the change of circumstances would be to make an adjustment to the original figure; however, that valuation technique was merely a means to implement the valuation criteria in para 2 of Schedule 6 and was not a substitute for those criteria: Lane v Woolway (VO) [2006] RA 410 and Goulborn v Cowell (VO) [2011] UKUT 417 (LC); [2012] RA 303 applied. The tribunal’s valuation would be an important consideration, and a departure from its assessment of the facts and valuation approach would be justified only in exceptional circumstances, but the task of the VO was not the same as that of the tribunal since the latter was not required to apply the statutory valuation criteria in the changed circumstances facing the VO. The VO was therefore unconstrained by the tribunal’s prior decision in cases where there had been a change of circumstances.
Accordingly, the fact that the original entry in the list was the result of a determination by the tribunal did not oblige the VO to follow the tribunal’s mistake where it was obvious to him that that valuation was based on a mistaken understanding of the facts. Where there had been a material change of circumstances, he was not restricted to adjusting the tribunal’s determination solely to reflect the effect of the material change, but was required to undertake the single valuation exercise of determining the rateable value of the hereditament in those changed circumstances. A mistake of fact made by the tribunal did not have to be perpetuated and the appellant was entitled to start from scratch, giving appropriate weight to the tribunal’s decision.
In any event, on the facts of the instant case the rateable value that the appellant had altered in October 2009 was not a rateable value determined by the valuation tribunal but was rather the value agreed between the parties following the merger of the office building into the aerodrome hereditament. That figure also represented the rateable value of a hereditament which was itself materially different from the hereditament valued by the valuation tribunal in its March 2008 decision. The constitutional and jurisdictional considerations that attended interference by the VO in a rateable value that had resulted from a valuation tribunal decision did not apply to an alteration to a rateable value shown in the list as a result of an agreement between the VO and the ratepayer.
Tim Buley (instructed by the legal department of HM Revenue and Customs) appeared for the appellant; the ratepayer did not respond to the appeal.
Sally Dobson, barrister
