Rating of coal tip purchased from National Coal Board–Previously unprofitable and not rated, tip became profitable under new ownership and rating authority decided that it should be rated–General resolution passed for levying borough rate, but no specific resolution relating to the coal tip–Proposal by valuation officer to include the tip in the valuation list at £13,000 rateable value–Objection by occupiers–Pending decision of local valuation court on appeal rating authority demanded payment of rates–On application for a distress warrant magistrates stated a case for Divisional Court, who held that the rating authority were entitled to have the sum paid–Occupiers’ appeal to Court of Appeal dismissed–Official who made demand for rates was properly authorised by general resolution making the rate for the borough–No specific resolution necessary–List can be amended by virtue of section 6 of the General Rate Act 1967 without waiting for outcome of proceedings before local valuation court
This was an
appeal by the ratepayers, B Kettle Ltd, from the decision of the Queen’s Bench
Divisional Court on a case stated by magistrates when called upon to issue a
distress warrant in respect of the non-payment by the ratepayers of the amount
of rates demanded on the proposed rateable value of £13,000, namely, £9,000.
The Divisional Court held that the rating authority were entitled to the
payment of this sum although the appeal was still pending before the local
valuation court. In fact shortly after the decision of the Divisional Court the
local valuation court reduced the rateable value of the coal tip from £13,000
to £4,000. The ratepayers nevertheless pursued this appeal to the Court of
Appeal on the legal issues. The Divisional Court’s decision was reported at
(1977) 245 EG 1027, [1978] 1 EGLR 105.
W J Glover QC
and N J Worsley (instructed by Church, Adams, Tatham & Co, agents for
Tinsdall, Hollinshead & Moody, of Hanley) appeared on behalf of the
appellants; G E Moriarty QC and A R Porten (instructed by E Wetherell,
solicitor to Newcastle under Lyme Borough Council) represented the respondent
council.
Giving
judgment, LORD DENNING MR said: This case concerns the rating of a coal tip. It
stood on a large parcel of land in the occupation of the National Coal Board.
They were not doing anything with it. So it was not rated. But in 1974 the
National Coal Board disposed of the tip to a company called B Kettle Ltd. They
turned it to profitable uses. It then occurred to the rating authority–the
Newcastle under Lyme Borough Council–that they ought to make B Kettle Ltd pay
rates on it.
On March 18
1975 the council passed a resolution for rates to be levied at so much in the
pound on the rateable value of each hereditament chargeable thereto–that is,
for the forthcoming year from April 1975 onwards. They decided that the rate in
the pound should be something over 60 pence.
On September 1
1975 the valuation officer–who is the man appointed by the Inland Revenue–made
a proposal to bring this tip in for rating purposes. He proposed that the
rateable value should be £13,000. B Kettle Ltd lodged an objection on September
26 1975, alleging that that was much too high a value to put on this coal tip.
This meant that the true value had to be ascertained by the local valuation
court. Pending this being ascertained, the rating authority (the district
council) decided to demand rates on the proposed value of £13,000. They worked
it out at 60 pence in the pound. It came to over £9,000 payable. They made a
demand on November 14 1975 for that sum. B Kettle Ltd did not pay. They said
that they had lodged an objection, and it was due to come before the local
valuation court. The local council went to the magistrates and asked for a
distress warrant. That was in March 1976. The magistrates stated a case for the
decision of the Divisional Court. It came before the Lord Chief Justice on
October 6 1977. The Divisional Court held that the rating authority were
entitled to have the sum paid, even though the proposal and objection were
still pending before the valuation court.
A day or two
after the Lord Chief Justice’s decision the local valuation court came to
consider the matter. They reduced the rateable value from £13,000 to £4,000. So
a tremendous reduction was secured by the company: and I may say that there is
a provision in the statute that if there is an earlier payment it can be
adjusted afterwards when it is due. Now B Kettle Ltd appeal to this court. They
have not suffered any loss at all. For this simple reason. They did not pay
under the distress warrant. They did not pay until after the rateable value had
in fact been reduced to £4,000. Nevertheless they appeal to this court on this
legal point. When a proposal has been made for an addition to the valuation
list, have the rating authority the right to distrain and levy the sum before
that proposal is put into the valuation list?
That question has led us to search through the history of rating from
the year 1601 to the present day. But it seems to me that we should go by the
few sections in the General Rate Act 1967. I will just deal with one or two of
them. Section 2(4) of that Act provides: ‘Subject to the provisions of this
Act, the general rate for any rating area–(a) shall be a rate at a uniform amount
per pound on the rateable value of each hereditament in that area . . . (b)
shall be made and levied in accordance with the valuation list in force for the
time being.’ That is the general rate–so
much in the pound on the hereditament in the valuation list.
Section 2(4)
is qualified by section 6(1), which provides: ‘Subject to the provisions of
this section, the rating authority may at any time make such amendments in a
rate . . . as appear to them necessary in order to make the rate conform with
the enactments relating thereto, and in particular’–I will not go through them
all. They can make any amendments so as to correct any arithmetical errors or
other mistakes, but the important subsection is (1)(c)(i): ‘. . . make such
additions to or corrections in the rate as appear to the authority to be
necessary by reason of–(i) the coming into occupation of any
of the making of the rate; or (ii) any change in the occupation of the hereditament.’ That is what has happened in this case. They
can make changes and amendments in the rate because of their coming into
occupation or changing the occupation of this coal tip.
The other
important section is section 6(2): ‘Where the effect of the amendment would be
either . . . (b) to charge to the rate a hereditament not shown, or not
separately shown, in the valuation list, the rating authority shall not make
any amendment of the rate unless either the amendment is necessary to bring the
rate into conformity with the valuation list or’–and these are the important
words–‘a proposal for a corresponding alteration to the valuation list has been
made by the valuation officer.’ Those
words came in in 1948 for the first time. It seems to me that the plain
intendment of the legislature was to enable amendments to be made when premises
came newly into charge for rating and immediately when a proposal was made,
before the matter had gone through the various procedures, and before it got
into the valuation list.
So where an
amendment is ‘necessary’–and it is proposed–the list can be amended as soon as
the proposal is made without waiting for objections, without waiting for the
decision of the valuation court, and without waiting for appeals. That seems to
me the plain intendment of section 6(2)(b). Therefore it was open to the rating
authority to make this amendment with regard to this coal tip as soon as the
proposal was made on September 1 1975: and, indeed, they say they did make the
amendment on November 14 1975, making a demand for the rates.
Now it is said
that the only people who can make the amendment are the rating authority: and
it is said that they have not done it. It is said that it was done by a clerk
in the council offices, and that is not sufficient authority–it is not a making
of it by the rating authority–and therefore it should be ignored.
I was
impressed by that argument for a very considerable time. Nevertheless, it is to
be remembered that these words as to the making of a rate apply even to
clerical arithmetical errors or any error or insertion or misdescription in the
list, and so forth. It seems to me, in the circumstances, that it is not
contemplated that this matter should have been brought before the rating
authority every time an error is discovered or an omission has to be corrected
or after a new proposal is made in the course of a year. It seems to me that it
can be done by a general resolution in advance, enabling the staff in the
office to make these corrections to errors or to deal with proposals during the
course of the year. There are provisions in the statute which enable
adjustments to be made later on. In that regard I will read the rest of section
6(2)(b): ‘. . . and if effect, or full effect, is ultimately not given to such
a proposal, and the amount of the rate levied in pursuance of the amendment is
affected, the difference–(i) if too much has been paid, shall be repaid or
allowed; or (ii) if too little has been paid, shall be paid and may be
recovered as if it were arrears of the rate.’
That last passage of section 6(2)(b) It seems to me to contemplate that
the proposal shall be given effect long before the final determination is made.
As I have
said–and Mr Moriarty agrees–there should be a general resolution at least to
authorise the staff in the office to make these clerical amendments and matters
of that kind. But the whole question comes to this–whether the resolution made
in advance on March 18 1975 was sufficient for the purpose. As I have already
said, it empowers and authorises the rates at so much in the pound on each
hereditament chargeable thereto. It seems to me not only to be chargeable on
the existing valuation list but also chargeable in the course of the year by
reason of correction of errors and by reason of proposals which have been made:
and that general resolution, it seems to me, is sufficient to satisfy the
statute. Otherwise it seems to me to be adding quite an unnecessary amount of
detail for the rating authority which Parliament cannot have contemplated. It
cannot have contemplated that every small amendment, clerical or otherwise, is
to be brought up every time the council meets.
So it seems to
me on the whole that the practice of the local authority was right in this
case. It seems to me that the decision of the Lord Chief Justice was right, and
I would therefore dismiss the appeal.
Agreeing that
the appeal should be dismissed, LAWTON LJ said: Pursuant to the General Rate
Act 1967 and the Local Government Act 1972, specified local authorities were given
power by Parliament to make and levy rates. The power is the power of the
rating authority. It is not the power of officials who work for the rating
authority. Section 2(1) of the General Rate Act 1967 is in these terms: ‘Every
rating authority shall from time to time in exercise of their powers under
section 1(2) of this Act make such rates as will be sufficient to provide for
such part of the total estimated expenditure to be incurred by the authority
during the period in respect of which the rate is made. . . .’ Again section 6(1) provides: ‘Subject to the
provisions of this section, the rating authority may at any time make such
amendments in a rate (being either the current or the last preceding rate) as
appear to them necessary in order to make the rate conform with the enactments
relating thereto. . . .’
Rating
authorities, however, can only act through their officials. The officials must
be properly authorised to act, and they can only be properly authorised to act
by a resolution of the rating authority. It follows, so it seems to me, that
the problem in this case has been whether, when the action was taken to put in
a demand for rates after the making of the proposal by the valuation officer,
the official who made the demand was properly authorised to do so by the rating
authority. This point was canvassed before the Lord Chief Justice, and he dealt
with it in this way. He said:
In the end,
almost everything which a local authority does has to be sanctioned by the
resolution of some committee, if not of the authority itself. But leaving that
kind of thing aside, I feel quite confident that it was not the intention of
Parliament that a specific resolution should be made every time it was desired
to bring a new hereditament into the rate under the powers relied upon in this
case by the local authority. Section 6 is drafted in clear and specific terms,
and I feel confident that it would be said if any further resolution was
required.
I have not
found the problem of construing section 6 in the way the Lord Chief Justice
construed it as easy as he did, because there are parts of section 6 which are
not easy to reconcile with other parts. For example, it is easy to see that it
would be nonsensical for the rating authority as such–and that would not
include a committee of the rating authority but the rating authority itself–to
have to have a resolution every time a clerical or arithmetical error in the
rate was discovered. On the other hand, under section 6(1)(c), the amendment to
a rate can only be made as appears to the authority to be necessary. That is
more akin to a matter requiring a specific resolution of the rating authority.
I have had
grave doubts about this matter; but, having regard to the view which the Master
of the Rolls has taken and I understand Geoffrey Lane LJ will take, I feel that
I should accept that the overall intention of section 6 is that a specific
resolution is not required every time the rating authority decides to make an
amendment. It is necessary, however, to say this, that, when the case was
stated by the magistrates, there was an omission in it because there had been
no evidence before them to indicate what authority had sent out the demand.
Before this court, our attention was called to the omission, and it was
accepted by the respondent rating authority that the omission should be
rectified; and Mr Moriarty, on behalf of the rating authority, produced a
certified copy of the resolution of the rating authority which was passed on
March 18 1975. That authority, after the formal parts, was as follows: ‘. . . a
General Rate for the Borough at the rates in the £on rateable value of each
hereditament chargeable thereto as specified below is hereby made and
approved in respect of the period commencing on the 1st day of April, 1975 and
terminating on the 31st day of March, 1976.’
Mr Moriarty submitted that that resolution was in wide enough terms to
authorise the officials of the rating authority to make amendments to the rate
in accordance with the provisions of section 6 of the General Rate Act 1967.
The words are indeed very general. With some hesitation and doubt, I have come
to the conclusion that that resolution was wide enough to authorise what was
done in this case, so I, too, would dismiss the appeal.
GEOFFREY LANE
LJ delivered a judgment also agreeing that the appeal should be dismissed.
The appeal was dismissed with costs.