by Martin Edwards and Tim Hellier
The Government has at long last published the regulations governing the alteration of non-domestic rating lists and appeals. The Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1990 (SI no 582) were laid before Parliament on March 14 and came into force on April 1 1990. This article examines the provisions concerned with the local as opposed to central rating list.
The principal statute governing the new rating system is the Local Government Finance Act 1988 and represents a typical example of modern legislation in that as an enabling statute it merely establishes a skeleton and leaves the flesh to be provided by subordinate legislation. Thus, it is impossible to fully understand the new system without studying all the regulations and some have still to see the light of day. Nevertheless, it is clear that these regulations, which are lengthy and run to 50 clauses, cover one of the more important aspects of the new system — the right of appeal whether against an entry in the list or some other feature.
Alteration of local rating lists
Many appeals will be concerned with the assessment of rateable value ascribed to a particular hereditament in the rating list. The method for securing an alteration to the value shown remains unchanged from the old system, that is to say by making a proposal to alter the list, but the new procedure incorporates some subtle but extremely important differences and a failure to appreciate these could be fatal to a proposal.
Generally, by virtue of regulation 4, an alteration will take effect from the day on which the circumstances giving rise to the alteration arose, but where that day cannot be reasonably ascertained regulation 4(6) provides that the alteration will take effect from the day the proposal was served on the valuation officer. Where the alteration relates to a disputed previous alteration it will have effect from the day the disputed alteration fell to have effect.
The ability to back-date an alteration to the first day in the year in which the alteration is made is limited by regulation 6, except for where the proposal is disputing a previous alteration. This is one good reason for not delaying serving a proposal when the circumstances are fairly clear cut. For example, if a hereditament is physically altered in some way on, say, December 31 1990, which leads to a reduction in its rateable value, provided the proposal is served on the valuation officer by the end of the rating year, ie March 31 1991, then the alteration in the list will have effect from December 31 1990. If, however, there is some delay in serving the proposal until, say, May 1 1991, the alteration will have effect only from April 1 1991.
Whenever an alteration is made to the list, the valuation officer is given six weeks in which to serve notice of the alteration on the ratepayer and on the charging authority. The latter must alter their copy of the list as soon as reasonably practicable.
The right to appeal
Probably the most eagerly awaited regulation is that which governs the circumstances and periods in which proposals may be made. Regulation 9 introduces a number of fundamental changes:
(a) the right to make a proposal has been severely restricted. Apart from the valuation officer, only the charging authority (and only when they seek to include or exclude a hereditament (and they can only do this) before the list was compiled) and an “interested person” can make a proposal.
An “interested person” is defined by regulation 2 as being the occupier and anyone (other than a mortgagee) having in any part of the hereditament either a legal estate or an equitable interest that would entitle him to possession after the cessation of any prior interest. An interested person can request to be made a party to proceedings arising from a proposal not made by him but which relates to his hereditament provided that he serves notice on the Valuation Officer within three months of the service of the proposal.
(b) in most circumstances proposals have to be served within six months of a list being compiled, ie by September 30 1990. It should be remembered that the next list may not be compiled for five years or even longer. There are, however, limited exceptions to this rule as follows:
(i) A proposal can be served at any time by an interested person if a property is occupied in parts but is shown in the list as one hereditament or where it is treated as more than one hereditament even though it is in the same occupation.
(ii) When there has been a material change in circumstances (as defined in regulation 3).
(iii) A decision of either the relevant valuation and community charge tribunal, the Lands Tribunal or a court on appeal which is material to the rateable value ascribed to the hereditament in question. In the exceptions numbered (ii) and (iii) above either the charging authority or an interested person may make a proposal within six months of the date of the change or the decision.
Furthermore, when someone becomes the ratepayer of a hereditament for the first time they can lodge a proposal within six months of becoming the new ratepayer. This is subject to the proviso that there has not been a prior appeal relating to the same hereditament and facts or the change of ratepayer involves either a company and one of its subsidiaries or the formation of a new partnership where any of the partners had belonged to the previous partnership. When the valuation officer has made an alteration, any interested person may make a proposal within six months of service of the notice regarding the alteration seeking a restoration of the list to its state prior to the alteration being made.
Form and content of proposals
Regulation 10 governs the form and content of proposals. They must be in writing and state the name and address of the person making it including their capacity in so doing. It must identify the property and the proposed manner in which the list should be altered. The proposal should contain a statement of reasons explaining why it is considered that the list is incorrect or, if there has been a material change in circumstances, the nature and date of the change. If a proposal disputes the accuracy of an alteration made by the valuation officer, it should state the day when the valuation officer served notice of the alteration and if it disputes the day from which an alteration should have effect, it should state the day proposed in its place. More importantly, any proposal must be served on the valuation officer, not the charging authority.
If the valuation officer considers that a proposal has not been validly made then regulation 11 states that he has six weeks after it was served on him to serve a notice on the person making the proposal stating why it is considered to be invalid and drawing attention to the right to appeal within four weeks to a valuation and community charge tribunal. Such an appeal is commenced by serving a notice of disagreement on the valuation officer.
The procedure
The procedure following the making of a proposal is laid down in regulations 12 to 16. Six weeks after a proposal is served, the valuation officer serves a copy of the proposal on the ratepayer and, in certain cases, the charging authority. If the valuation officer agrees with the proposal he serves notice accordingly on the person making the proposal and alters the list within six weeks of the notice.
A proposal can be withdrawn by the person who made it under regulation 14, although where he has since ceased to be the occupier he must obtain the written agreement of the current occupier. If an interested person has notified the valuation officer that he wants to be a party to the proceedings the valuation officer is required to serve notice of withdrawal on that interested person who then has six weeks to serve notice on the valuation officer to the effect that he wishes to take over the proceedings in the place of the person who made the proposal.
If the valuation officer disagrees with any proposal that has not been withdrawn, he must refer the proposal within six months of it being served on him to the relevant valuation and community charge tribunal and is treated as if it were an appeal by the person making the proposal against the valuation officer’s refusal to alter the list. Referral involves the valuation officer sending to the clerk to the tribunal a statement containing the relevant entry in the list, the date of service of the proposal and the grounds on which it was made. If the valuation officer alters the list subsequently and before the appeal is determined, the appellant is deemed to have appealed against that alteration.
Appeals procedure
The appeal mechanisms laid down in regulations 27 to 46 govern not only appeals relating to proposals but also against completion notices.
Appeals against completion notices must be made in writing within four weeks of its service or by May 1 1990 whichever is the later and must be accompanied by a copy of the notice and a statement of the grounds on which it is made: see regulation 29.
Where an appeal has been lodged against a decision by the valuation officer that a proposal is invalid, the appeal must be determined before the tribunal can consider an appeal against the valuation officer’s refusal (deemed or substantive) to alter the list.
Regulation 32 provides that an appeal can be withdrawn at any time up to the commencement of the hearing or the consideration of written representations. Where the appeal is concerned with a refusal to alter the list, all parties to the proceedings, other than the valuation officer, must give their written consent.
If all parties agree, an appeal can be dealt with by way of written representations. Once notice to this effect has been given to all parties to the appeal by the clerk to the tribunal, each party has four weeks in which to serve a notice giving their reasons why they consider the proposal is well founded or otherwise, or that they do not wish to make any further representations. Copies of each notice are then circulated to the other parties who have four weeks in which to serve a notice in reply on the clerk. Copies of any notice in reply is then served on the other parties and then four weeks later the clerk sends copies of the papers to the tribunal which can require further evidence from all or any of the parties, or require their attendance to give evidence or to produce documents, or order that a hearing is necessary to determine the appeal. Any additional information requested by the tribunal is copied to the other parties for their comment and if attendance is required the other parties must also have the opportunity to attend.
When a hearing is to be held to determine any appeal the chairman of the tribunal may on application or on his own motion hold a pre-hearing review to try to reach agreement on some, if not all, of the issues or evidence.
At least four weeks’ notice of the hearing date and its venue must be given by the clerk to all parties and this information must also be advertised by him by posting a notice outside the offices of both the tribunal and the charging authority.
Under regulation 37, any party to a hearing may appear in person or be represented by a lawyer or other representative.
The tribunal consists of three members with a chairman presiding, but if all parties appearing agree the appeal can be heard by only two members. The hearing is normally open to the public. If at an appeal all parties other than the valuation officer do not appear then the tribunal may dismiss the appeal although they are not obliged to. The tribunal can hear an appeal in the absence of any party. Evidence can, if the tribunal so requires, be given on oath or affirmation. The valuation officer will normally present his case first where it relates to an appeal against his determination that a proposal is invalid. Parties are entitled to call witnesses and they will be subject to cross-examination. The tribunal enjoys a wide discretion under regulation 38(13) to decide how a particular hearing should be conducted and is actually required by the regulations to be as informal as possible. Furthermore, it is not bound by the rules of evidence which bind courts of law.
The appeal is decided by a majority of members, but, in circumstances where the tribunal comprises only two members who are unable to agree, the appeal is remitted to be determined by way of a fresh hearing with different members. The tribunal is under an obligation as soon as is reasonable to notify the parties in writing and is obliged on request of any party to give reasons for its decision.
Under regulation 42 the tribunal is empowered to order the valuation officer to alter the list or alter any determination or certification given by him and he is obliged to comply with the order within six weeks of its making. In circumstances where the decision relates to a disputed rateable value, which should be greater than the amount contended for in the proposal, the order shall require the list to be altered with effect from the day the decision is given. A duty is imposed on the clerk to ensure that the decisions and orders made pursuant to earlier regulations are recorded and each party to the appeal to which the entry relates is sent a copy of the entry.
It should be borne in mind by professional advisers that regulation 42 is a complete departure from the old system as it empowers the tribunal to decide that the rateable value should be greater than the amount in the list on the date of the proposal.
Accordingly, prior to making a proposal owners or occupiers of business premises should be made aware of the possibility that their rates liability may in fact be increased as a consequence of taking action prior.
The framework for reviewing, revoking, varying or setting aside decisions of the tribunal is provided by regulation 44. The grounds for doing so are extremely wide and include clerical error in drawing up the decision and non-appearance by a party who did not receive a notice of hearing or is able to show reasonable cause for not appearing; the decision is affected by a decision of the High Court or where the interests of justice dictate a review. In the case of a completion notice appeal it is also possible to ask for a review of the decision in circumstances where new evidence, the existence of which could not have been ascertained by reasonably diligent inquiries, has become available since the conclusion of these proceedings.
Appeals
The right of appeal to the Lands Tribunal in respect of a decision for an order given by a tribunal and the Lands Tribunal has the power to dismiss an appeal which is not made within four weeks of the decision.
It is open to the persons who would be the parties to an appeal to the tribunal to agree in writing that the question or issue in dispute is to be referred to arbitration and section 31 of the Arbitration Act 1950 shall have effect. In these circumstances, the arbitration award may include any order which could have been made by a tribunal in relation to this question.
