Rating of unoccupied building–General Rate Act 1967, section 17 and Schedule 1–Newly erected building with certain works of the kind customarily required to be done after substantial completion–Application of para 9 of Schedule 1–Building assumed to be completed at expiration of such period beginning with substantial completion as is reasonably required for carrying out the additional work–Six months reasonably required in this case–Whether period begins to run from service of completion notice or from earlier date of substantial completion–Held that it ran from earlier date and could not be added after date of service of notice
This was an
appeal by the rating authority from a decision of His Honour Judge Stinson at
Ipswich County Court on July 12 1977 when, in an appeal by Graylaw Investments
Ltd against a completion notice under Schedule 1 to the General Rate Act 1967,
the judge decided that the period mentioned in para 9 of the Schedule notice
ran from the date of service and not from the date of substantial completion of
the works, which in this case occurred several months before service of the
notice. The notice related to a new building, Crown House, Crown Street,
Ipswich.
Raymond Sears
QC, Ian Croxford and Tobias Davey (instructed by Sharpe Pritchard & Co,
agents for E K Dixon, Solicitors’ Department, Ipswich Borough Council) appeared
for the appellants; Guy Roots (instructed by Radcliffes & Co) represented
the respondents.
WALLER LJ,
giving the first judgment at the invitation of Stephenson LJ, said that
paragraph 9 of Schedule 1 to the General Rate Act 1967, in the case of a
building on which work remained to be done of a kind which was customarily done
to a building of the type in question after the erection of the building had
been completed, provided that it should be assumed for the purposes of
paragraph 8 of the Schedule that the work of building had been, or could
reasonably be expected to be, completed at the expiration of such a period as
was reasonably required for carrying out the work. It was accepted for the
purposes of this case that the work which remained to be done was of a kind
which was customarily done to a building of this type after its erection had
been completed. It included such work as installation of partitions, possible
alteration of electric wiring, etc.
The only
question before their Lordships was when the term of the notice began to run.
The learned county court judge proceeded on the basis that time began to run on
service of the completion notice. In some of the reported cases to which their
Lordships had been referred the date of service of the notice coincided with
the date on which the building was substantially completed. In the instant
case, however, the local authority, perhaps because it had encouraged the
erection of the building, did not serve the notice until approximately 12
months after the date when the agents were saying that the building was
finished to a high standard.
The court had
to decide whether the judge was right in saying that time began to run from the
date of the notice, or whether it should run from the date of substantial
completion. Mr Sears submitted the latter, which would be April 25 1976, or
even earlier. It was quite clear that the judge found the building was
substantially completed on March 25 1976. He (his Lordship) found Mr Sears’
construction irresistible. Furthermore, it seemed to his Lordship that the date
when a building had been, or could be reasonably expected to be, completed was
a date which should not depend on notices. Service of the notice was a
condition precedent to liability for rates. A local authority could do what
Ipswich Borough Council did in this case, namely give a little more time
without also having to have added to that: extra time an additional amount of
time which in truth had already passed.
His Lordship
would therefore allow the appeal and substitute the dates set out in the
original completion notice.
CUMMING-BRUCE
LJ, agreeing, said that section 17(1) of the Act granted a new discretionary
power to a local authority in respect of the rating of unoccupied property.
Pursuant to that section, the provisions of the first Schedule governed the
liability to rating. It was against that background that the draftsman of the
first Schedule had to devise words apt (a) to enable the local authority to
exercise its discretionary power and (b) to set out statutory assumptions which
would eventually enable the local authority, where it so wished, to expose the
owner to liability to rates where the building was completed or, in an
appropriate case, where it had been substantially completed but some work
remained to be done. The way in which the draftsman solved the drafting problem
was as follows. Paragraph 7 provided that a newly-erected building which is not
occupied on the date on which the erection of the building was completed should
be deemed to have become unoccupied on that date for the purposes of paragraph
1, ie there was a deeming provision which made it necessary to discover the
date on which the building was completed in order to discover whether it was
‘unoccupied.’ One then went to paragraph
8(1)(a) and (b), which provided both for actual completion or the situation
where the work remaining to be done was such that the building could reasonably
be expected to be completed within three months. In those situations the local
authority was empowered to serve a notice upon the owner, and that notice was
to state that the erection of the building was to be treated for the purposes
of the Schedule as completed on the date of the service of the notice, or such
later date as might therein be specified.
In paragraph 9
one found that the draftsman had used words which gave rise to a statutory
fiction, so that in the situation covered by paragraph 9 one did not any longer
look at reality but applied a statutory fiction which the paragraph brought
into existence. This fiction compelled one to assume for the purposes of
paragraph 8 that the erection of the building had been, or could reasonably be
expected to be, completed ‘at the expiration of such period beginning with the
date of its completion apart from the work as is reasonably required for the
carrying out of the work.’
It appeared
clear to his Lordship that when paragraph 9 was married to paragraph 8, once
the date of substantial completion had been found apart from the period which
it would take in order to do the work which remained to be done, being work
customarily done to a building of the type in question, the necessary ingredients
of the statutory fiction had been found, and it was irrelevant that the date
for notional completion so arrived at was earlier than the notice served upon
the owner.
STEPHENSON LJ,
also agreeing, said that the words on which
never been considered in any reported case, and were not apparently considered
or adequately considered by the learned county court judge.
The judge had
found that substantial completion, and what he called the translation of the
property from ‘substantial completion’ to ‘completed’ by doing the work
customarily done to such buildings, was much earlier than March 7 1977, the
date when the completion notice was served, and that the period reasonably required
was six months. The expiration of that period was therefore also an event in
the past at the date of the service of the completion notice. It expired in
September 1976. The authority was entitled to serve a completion notice earlier
than it in fact did, and they were certainly entitled to determine the date on
which the work of the building was completed at a later date than September
1976, eg April 30 1977, the date specified in the completion notice. That,
therefore, was the date on which the building was deemed to become unoccupied
under paragraph 7 and consequently rateable under paragraph 1. The court,
therefore, was not entitled to treat the six months as running from the date of
the completion notice, as the judge clearly confirmed was his order in the
explanatory letter which the court wrote on July 19 1977 to the solicitor to
the appellant authority.
The appeal
was allowed, with costs in the Court of Appeal and below.
