The Upper Tribunal (Lands Chamber) has allowed an appeal from a decision of the Valuation Tribunal for England concerning the validity of completion notices specifying a completion date which preceded service of the notices in Hermes Property Unit Trust v Richie Roberts and Trafford Council [2021] UKUT 308 (LC).
The appellant owned three properties on the Guinness Trading Estate, Trafford Park – units 13-15, 14-15 and 18. The units formed part of larger building which was subject to extensive renovation commencing in 2014 when they were deleted from the rating list. Completion notices dated 3 May 2016 were served, stating that in the council’s opinion the property could reasonably be expected to be completed by that date. It was not disputed that the notices were received by the appellant on 9 May 2016. The properties were entered into the rating list as three separate hereditaments on various dates from 3 to 15 May 2016.
Non-domestic rates are levied on hereditaments and a building that is unfinished or is being renovated so that it cannot be occupied for the purpose for which it was designed is not a hereditament (see Porter (VO) v Trustees of Gladman SIPPS [2011] UKUT 204 (LC)). The completion notice procedure under section 46A of the Local Government Finance Act 1988 provides that where a completion notice is served and the building has not been completed on or before the date stated in the notice it shall be deemed to have been completed. Schedule 4A of the 1988 Act provides that where the building is not yet complete “the authority shall propose as the completion date such day, not later than three months from and including the day on which the notice is served” and where a building has been completed “the authority shall propose as the completion day the day on which the notice is served”. There is no provision for the authority to propose a completion day which precedes the date of service of the notice.
The appellant challenged the validity of the completion notices. The VTE decided the notices were valid: while they did not comply with the statutory requirements, they were substantially compliant and there was no prejudice to the appellant. The UT took the view that parliament could not have intended substantial compliance to be good enough because it would result both in uncertainty and in retrospectivity. While there was some uncertainty inherent in the date of service itself, there was far greater uncertainty if substantial compliance was sufficient. What did substantial mean in this context? The time between the completion date and the date of service in the case was six days at most. Was 10 days or a couple of months substantial compliance? Furthermore, if the notices were valid, they provided for a completion date that was in the past at the date of service. It would be startling if the billing authority could create a tax liability on a basis that was both counterfactual and retrospective. On a property reading of the statute a notice that purported to do so was invalid.
Louise Clark is a property law consultant and mediator
