Alterations to rateable values of properties – Valuation list showing value as old rateable value on 31 March 1990 – Valuation officers calculating transitional value on basis of old rateable value – Applicants applying for transitional certificates – Applications refused – Regulation 2(3) of Non-Domestic Rating (Transitional Period) Regulations – Valuation officers’ decisions quashed
On 10 August 1989 Murphy Ltd (Murphys), the applicant in the first case, acquired land and premises in Coventry. The valuation list showed a rateable value of £3,200. Between September 1989 and January 1999 Murphys demolished about one-third of the buildings on the site. On 16 February 1990 it made a proposal to alter the rating list. The valuation officer agreed a reassessment at £2,263 rateable value on 1 March 1990. The agreement was sent to the rating authority for signature on 30 March 1990. On 31 March 1990 the rating valuation was shown on the valuation list as £3,200. On 1 April 1990 a new rating list came into force. The agreement was signed by the rating authority on 20 April 1990, and, on 11 July 1990, the rating valuation in the old list was altered to £2,263.
When Murphys claimed transitional relief under the Local Government Finance Act 1988, it was calculated on a rateable value of £3,200, as the value shown on 15 February 1989. On 8 December 1994 Murphys’ solicitors wrote to the district valuation officer requesting a certificate of transitional value as at 31 March 1990 to reflect the agreed valuation. The valuation officer refused to issue a certificate and subsequent applications were also unsuccessful. Murphys sought judicial review of the officer’s decision.
In 1975 Nationwide Building Society (Nationwide), the applicant in the second case, acquired a property in Dudley. The valuation list showed a rateable value of £4,138. In March 1976 the amount was increased by agreement to £4,305. Thereafter, construction of a new shopping centre led to a decrease in value of Nationwide’s premises. Prior to 15 February 1989, there was a reduction to £3,972. On 28 March 1990, after further development, Nationwide made a further proposal to reduce the assessment. On 31 March 1990 the rateable value shown on the list was £3,972. On 31 August 1990, on appeal, the rateable value was reduced to £3,763, and the old list was altered to show that the rateable value for 31 March 1990 was £3,763. On 25 November 1996 Nationwide requested a certificate of transitional value as at 31 March 1990 in the sum of £3,763. The valuation officer refused to issue a certificate and Nationwide sought judicial review of the decision.
The issue turned on the proper interpretation of Regulation 2(3) of the Non-Domestic Rating (Transitional Period) Regulations 1990, enacted in order to allow businesses a fair transition to the values of the new list required by the Local Government Finance Act 1988. Regulation 2(3) applied where there had been a change in any of the factors by reference to which the value shown for a hereditament for 31 March 1990 in an old list was ascertained. This would result in that value being affected if a notice of a proposal were given by a valuation officer on or before that day for the alteration of the list. The valuation officers claimed that Regulation 2(3) meant that, when asked for a certificate, an officer looked to the final value then shown for the hereditament in the old list for 31 March 1990. The final value was the value after all litigation had ceased. The officer then asked himself whether there had been a change in the factors by reference to which that final value had been ascertained, which would result in the value being affected, had a valuation officer proposal been made before 31 March 1990. If so, subject to other conditions, an officer would certify a value, and, if not, as in the applicants’ cases, he would not. The judge quashed the valuation officers’ decisions, holding that their interpretation would produce an adverse result and detriment that could hardly have been intended by the Act and Regulations. The officers appealed.
Held: The appeal was dismissed.
1. When applying Regulation 2(3)(a) it had to be asked whether there had been any change in any factors by reference to which the value shown on 31 March 1990 in the old list had been ascertained. It was clear in both cases that there had been such changes. The next question was whether those factors would result in the value being affected if notice of the proposal for alteration of the list had been given to the valuation officers on or before 15 February 1989. That question was partly hypothetical. Regulation 2(3)(a) worked on the hypothesis that there had not been such a proposal, but, if there had been, it posed the question of whether the proposal would result in the value being affected. It was clear from the language of Regulation 2(3)(a) that the phrase “on or before that day” referred to 31 March 1990. Therefore, as long as the hypothetical proposal made on or before 31 March 1990 would have resulted in the value being affected, that was sufficient for the operation of the regulation. There was no reason to read into the regulation a restriction on the date on which the valuer was required to look at the valuation. Accordingly, it could be concluded that the approach contended for by the valuation officers was wrong.
2. As a result of that conclusion, there might be a number of cases where applications for transitional certificates had been wrongly refused. However, the only obligation on the valuation officers under the statutory scheme was one that was triggered by an application for a certificate. Therefore, there was no obligation on the valuation officers to trawl through all the cases to which the conclusion might apply.
Timothy Mould (instructed by the solicitor to the Inland Revenue) appeared for the valuation officers; David Mole QC and Peter Village (instructed by JP Scrafton) appeared for the ratepayers.
Thomas Elliott, barrister
