Rating – Alteration of list – Effective date – Non-Domestic Rating (Alteration of Lists and Appeals)(England) Regulations 2009 – Local Government Finance Act 1988 – Appellant’s hereditament erroneously omitted from rating lists – Respondent valuation officer altering 2005 list to include hereditament so as to correct inaccuracy – Regulation 14 of 2009 Regulations – Effective date of alteration – Whether date when list first compiled or later date of alteration – Whether valuation officer having power to alter rating list once compiled – Appeal dismissed
The appellant owned a large Victorian house in London SW5, which contained 19 self-contained units used for short-term holiday letting. The property had been so used for many years before the respondent acquired it in 2007, although it was not known exactly when that use had commenced. Prior to 2011, the premises were not included in any non-domestic rating list and were instead treated as a domestic dwelling. In March 2011, the respondent valuation officer altered the 2005 rating list to include the premises as a new hereditament, described as “self-catering holiday unit and premises”, with a rateable value of £104,000 and an effective date of March 2008.
The respondent rejected the appellant’s proposal to delete the new entry from the list. The appellant appealed to the Valuation Tribunal for England (VTE). It was agreed that the rateable value for the purposes of the 2005 rating list should be £62,500 and that the appeal should be allowed to that extent. However, the parties did not agree on the effective date from which the respondent’s alteration should take effect. By that time, the respondent was arguing that the effective date should be April 2005, as the date when the list first came into force. The appellant contended that the effective date was March 2011, as the date on which the entry itself had been made, and that, since that date fell outside the period of the 2005 rating list, the premises should be deleted from that list entirely.
Dismissing the appeal, the VTE held that the case was governed by regulation 14(2) of the Non-Domestic Rating (Alteration of Lists and Appeals)(England) Regulations 2009, applying to alterations made to correct an inaccuracy in the list, such that the effective date was “the day on which the circumstances giving rise to the alteration first occurred”. It interpreted that expression to mean the first day within the period of the list on which the hereditament met the criteria for inclusion and it consequently determined that the effective date was April 2005. It rejected the appellant’s submission that, where the date of commencement of the holiday letting use could not reasonably be ascertained, regulation 14(2) did not apply and the position was governed by regulation 14(5), such that the effective date was the date on which the alteration in the list was made.
The VTE’s decision was subsequently upheld by the Upper Tribunal: see [2014] UKUT 93 (LC); [2014] PLSCS 96. The appellant appealed. It sought to raise a new argument that a valuation officer had no power to alter a rating list once it was compiled; in that regard, it challenged the widely held view that such a power existed as a corollary of the duty, under section 41(1) of the Local Government Finance Act 1988, to maintain an accurate list.
Held: The appeal was dismissed.
(1) The scheme of the present legislation was to impose a statutory duty on the valuation officer, under section 41(1) of the 1988 Act, to compile and maintain the list and to take such steps as were reasonably practicable to ensure that it was accurately compiled. It would be odd if the person who was made responsible for compiling and maintaining an accurate list did not have the power to amend the list from time to time in order to maintain its accuracy. Considered in the particular context in which it was used, and having regard to the purpose and effect of the statute in question, the word “maintain” in section 41 should be read as imposing on the valuation officer an obligation to maintain the list in an accurate rather than an inaccurate state and not merely to preserve it as, in effect, an historic snapshot of the position on the ground on the date when the list came into effect.
The Local Government Act 1948 and the General Rate Act 1967, as the predecessors of the 1988 Act, had allowed the list to be altered by proposals made either by the valuation officer or an interested party. While the 1988 Act represented a departure from that scheme, there was no reason why that change in the structure of the legislation should have been intended to deprive the valuation officer of a power to amend the list of his own volition. Given that the owners and occupiers of rateable property had no obligation to notify the valuation officer of the creation or existence of a rateable hereditament, the absence of a power of amendment by the valuation officer would not be readily explicable. While it was possible for the draftsman of legislation to produce a defective statutory scheme, that was not a conclusion which the court would usually accept unless compelled by the provisions of the legislation to do so. This was not such a case. On the proper construction of the legislation, the duty of a valuation officer to maintain the list in an accurate form, under section 41 of the 1988 Act, was to be facilitated by the process contained in Part III of the 1988 Act, which included, in section 55, an express power for the secretary of state to make regulations about the alteration of the lists by valuation officers. That had been done by regulation 17 of the 2009 Regulations, properly construed. In so far as it was necessary to do so, it was possible to imply a power into the section 41 duty itself. However, the better view was that section 55(2) was an enabling power designed to facilitate the execution of the section 41 duty and that that had been accomplished by regulation 17: National Car Parks Ltd v Baird (VO) [2004] EWCA Civ 967; 2004] PLSCS 188 considered.
(2) The FTT and the Upper Tribunal had correctly applied regulation 14(2) of the 2009 Regulations as governing the date from which the alteration should take effect. Regulation 14(2) was drafted in order to encompass both initial inaccuracies in the list, for example due to the omission of a rateable hereditament, and subsequent changes of circumstances which rendered the list inaccurate. The default rule under regulation 14(2) was that an alteration took effect “from the day on which the circumstances giving rise to the alteration first occurred”, which, read against the background of the earlier regulations, had to be a reference both to inaccuracies in the list on the day of compilation and ones which arose subsequently. If an inaccuracy existed on the day of compilation, then the alteration took effect from that date.
(3) Regulation 14(5) did not apply to inaccuracies in the list either on or after the day of compilation. Inaccuracies in the list continued to be governed solely by the default rule in regulation 14(2). Even if that were not so, the inaccuracy in the 2005 list on the day of its compilation was reasonably ascertainable when the alteration was made in 2011. Although it was not possible to identify precisely when the commercial use of the property had begun, it was common ground that it had started long before April 2005. Regulation 14(5) therefore had no possible application to cases of the present kind, involving changes in circumstances which pre-dated the compilation of the relevant list.
Alison Foster QC and Myriam Stacey (instructed by Collyer Bristow LLP) appeared for the appellant; Hui Ling McCarthy (instructed by the legal department of HM Revenue & Customs) appeared for the respondent.
Sally Dobson, barrister
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