Practice and procedure – Costs – Rating appeal – Valuation officer appealing against decision of Valuation Tribunal for England in favour of respondent – Appeal later withdrawn – Whether respondent entitled to costs award – Whether appellant acting unreasonably in failing to withdraw appeal sooner or in criticising respondent’s conduct of proceedings – Costs awarded against appellant
The respondent operated a racing stable and premises in Leyburn, North Yorkshire. On an appeal to the Valuation Tribunal for England (VTE), she succeeded in obtaining a reduction in the rateable value of that hereditament in the 2010 non-domestic rating list, so that it was shown with a value of £8,800 with effect from April 2010 and £6,300 from September 2010.
The appellant valuation officer appealed to the Upper Tribunal, contending that the rateable values should be £12,500 with effect from April 2010 and £8,750 from September 2010. The respondent issued a statement of case in response and appointed an expert valuer. The case was listed for a hearing in October 2014 under the simplified procedure.
In September 2014, after consulting more senior staff within the Valuation Office Agency, the appellant wrote to the tribunal seeking permission to withdraw the appeal. He stated that, in the light of new evidence and information that had not previously been available, he now accepted that the rateable values adopted by the VTE were fair and reasonable.
The respondent was not willing to consent to the withdrawal unless the appellant paid her costs. She contended that he had acted unreasonably and should have withdrawn the appeal sooner. The appellant contended that the respondent had not been obliged to respond to the appeal and that it had been unreasonable and disproportionate for her to appoint an expert in circumstances where there were no significant issues of fact, but only discrete issues of valuation and the analysis of rental and comparable evidence. He submitted that the respondent had unnecessarily incurred costs and lengthened the proceedings.
The tribunal proceeded to consider whether the respondent should be awarded her costs as a condition of allowing the withdrawal of the appeal under r 20(2) of The Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. In doing so, it applied Practice Direction 12.8 of the Practice Directions: Lands Chamber of the Upper Tribunal, which suggested that costs would only be awarded in an appeal determined under the simplified procedure if a party had behaved unreasonably or the circumstances were otherwise exceptional.
Held: Costs were awarded against the appellant.
(1) Early settlement of disputes was to be encouraged and it would be unhelpful if a party which had reassessed the strength of its case were to be discouraged from withdrawing an appeal in a simplified procedure case by concern that it would automatically become liable for the costs of the respondent. To withdraw an appeal which was believed to have little prospect of success was a reasonable course of action and should not automatically be penalised. Some additional factor was likely to be necessary in a simplified procedure case to make it appropriate to order the appellant to pay the respondent’s costs.
The appellant had not acted unreasonably in bringing the appeal or failing to withdraw it sooner. He had had sufficient information by the middle of May 2014 at the latest to realise that his valuations were wrong and that they needed to be revised. However, even where no new evidence was adduced after May 2014, it had been reasonable for the appellant to check thoroughly that the evidence provided to him was rigorous and that it clearly supported the VTE’s determination of the rateable value, given that he had consistently disagreed with the underlying valuation approach adopted by the VTE and given his inexperience with that type of valuation. It had been understandable that the appellant should seek the advice of senior staff on the matter and await the production of an amended valuation. Once he had satisfied himself and the other senior personnel that the VTE was correct and that the rating list was accurate, he had withdrawn the appeal without delay and saved the parties the cost of the hearing. In all the circumstances, September 2014 was the earliest that the appellant could reasonably have withdrawn his appeal. The appellant’s conduct did not justify an award of costs to the respondent in respect of the resolution of the substantive issues in dispute.
(3) However, the appellant’s criticisms of the respondent’s conduct, including criticism of the presentation of her case and the appointment of an expert valuer, formed a significant part of the appellant’s written representations and were wholly unjustified and unreasonable. The respondent had been entitled to respond to the appeal in such detail as she saw fit. Her business would have been be under financial threat if the appellant had succeeded in overturning the VTE’s reductions in the rateable value of the hereditament and it was reasonable for her to respond to the appeal. Her statement of case, although detailed, was cogent, relevant and competently presented, and provided the appellant with a substantial amount of useful information. It was extraordinary for the appellant to suggest that this was not necessary or that it had lengthened the proceedings. Similarly, it was absurd for the appellant to suggest that it was disproportionate for the respondent to appoint an expert because the case involved pure valuation and the analysis of rental and comparable evidence. It was precisely because the case involved such issues that the respondent felt it necessary to instruct an experienced expert valuer. It was obviously reasonable for her to instruct an expert whose involvement was the key to the resolution of the dispute.
In light of the appellant’s unreasonable criticisms of the respondent, it was appropriate to order him to pay 50% of the respondent’s costs, on the indemnity basis, of preparing her written representations on the issue of costs in the appeal. The appellant was given consent to withdraw the appeal conditional on payment of those costs.
The appeal was determined on the written representations of the parties.
Sally Dobson, barrister
