Rating of licensed premises — Application by rating authority for judicial review in relation to decision by local valuation court on 17 appeals affecting licensed premises — ‘Part of a running battle between rating authorities and the licensed trade’ — The valuation officer in the present case had figures of actual trade carried out and had agreed valuations with ratepayers — Rating authority had not agreed the figures and complained that it had not seen actual trade figures, merely estimates — Role of rating authority, as established in Ellesmere Port and Neston Borough Council v Shell UK Ltd, recalled — Rating authority alleged inter alia that the proceedings before the local valuation court were characterised by a lack of natural justice — Submission to this effect rejected by judge — The mere failure to produce the actual trade figures did not amount to a breach of natural justice — The valuation officer has a power to obtain discovery, whereas the rating authority had not — The representative of the ratepayers before the local valuation court had not in fact refused to produce the actual trade figures — He had offered to produce them (with reluctance) provided that the court was cleared of all but interested parties — Observations by judge that an appeal to the Lands Tribunal would have been a more appropriate procedure than an application for judicial review to deal with the difficulty which had arisen — Application dismissed
This was an
application for judicial review by Oxford City Council in relation to a
decision of the Oxfordshire Local Valuation Court concerning 17 appeals
affecting licensed premises. There were three grounds of complaint as to the
proceedings before the local valuation court, namely (1) that the court came to
a decision based on no evidence, (2) that the hearing was conducted in a manner
contrary to section 76(5) of the General Rate Act 1967, and (3) that the
proceedings were conducted in a manner contrary to natural justice.
D
Micklethwaite (instructed by A P M Nixson, solicitor, Oxford City Council)
appeared on behalf of the applicant council; Alan Fletcher (instructed by the
Solicitor of Inland Revenue) represented the valuation officer; W Glover QC and
Miss S Hamilton (instructed by Lovell, White & King) represented Hall’s
Oxford & West Brewery Co Ltd and Morrell’s Brewery Ltd and they also
(instructed by Lovell, White & King, acting jointly with Cullum Smith, of
Watney-Mann & Truman Holdings Ltd’s legal department) represented Berni
Inns.
Giving
judgment WOOLF J said: This is an application by the Oxford City Council for
judicial review in relation to the decision of the Oxfordshire Local Valuation
Court given on January 10 1980 in respect of 17 appeals for proposals for
alteration to the valuation list with regard to licensed premises. It appears
that the application is part of a running battle between rating authorities and
the licensed trade in regard to the assessment of the gross value of licensed
premises.
Where a
question as to the valuation of premises for the purpose of rating arises,
there are three parties that are interested. First of all, there is the
valuation officer who is responsible for maintaining the valuation list, then
there is the ratepayer who will be the person who will be affected if the value
which is shown on the list is one which is excessive, and, thirdly, there is
the rating authority, who I do not say is concerned to see that the highest
value appears in the valuation list, but is concerned to see that a value does
not appear in the valuation list which is lower than the proper valuation.
In respect of
licensed premises, difficulties arise in relation to assessing the proper
valuation which is special to that type of premises. The problem has given rise
to proceedings before the courts in the past, and in particular the problem was
considered by Thompson J in the case of Watney Mann Ltd v Langley [1966]
1 QB 457. At p 462 of that report, Thompson J dealt with the position with
regard to valuation. He said:
It is
accordingly agreed that what a valuer has to do in valuing for rating purposes
any licensed premises is to estimate the rent upon which (applying the
hypothesis of section 68) the hypothetical tenant and the hypothetical landlord
would agree. It is further agreed that over the years certain principles have
been established in connection with this task of valuation to gross value and
that these are conveniently set out in Ryde on Rating (11th ed) at p
371.
Then the
learned judge sets out those principles as they appear in Ryde. I do not
need to read them all, but I will read no (4) which is:
The actual
rent at which a hereditament is let or the actual rents at which similar
hereditaments in similar economic sites are let so that they are truly
comparable are not necessarily conclusive evidence, but may be the best
evidence, of value.
Then I read
out no (8):
Where the
best evidence . . . is not available, the motive likely to induce potential
tenants to bid for the hereditament is a relevant factor in estimating what the
amount of such bids might reasonably be expected to be, for example, the making
of profit or the carrying into effect of a power or duty.
Then the judge
goes on:
These
principles are all of them important and are to be observed by the valuer. The
one which most closely relates to the problem with which I am concerned is,
however, no (8), for it is accepted on both sides that, since public-houses are
not nowadays generally let in the way that shops are let, the actual rent of
the particular public-house or of similar public-houses does not constitute the
best evidence of value, and the method of principle (4) would accordingly
seldom be a satisfactory or acceptable method. Instead, therefore, of finding
the gross value by reference to actual rents for which the hereditament or like
hereditaments are let, it is agreed that valuers have, in the case of licensed
premises, found the gross value by reference to their assessment of
profitability. Moreover, though valuation is a skilled business and the law
does not prescribe in detail the method a valuer has to follow in applying the
statutory hypothesis, it appears again to be common ground that a method known
as the direct method is now generally, if not indeed universally, used by those
who have to value licensed premises for rating purposes. That method has been
devised since the decision of the Court of Appeal in the case of Robinson
Bros (Brewers) Ltd v Houghton and Chester-le-Street Assessment Committee
[1937] 2 KB 445, which swept away as misconceived some well-established beliefs
and practices. The judgment of Scott LJ in that case was approved by the House
of Lords on appeal and has been since, and is before me, accepted as the modern
Bible on the subject and the authority for many of the principles I have
already cited from Ryde. That method is as follows: Take the premises in
the physical condition in which they are and suppose them to be vacant
and to let. Estimate the capability for trade of that house expressed as a
quantity. Multiply by a money figure for the brewer’s profit per unit of
quantity. To the money figure thus obtained add the estimated tied rent that
the brewer could expect to be paid by a tenant. From the total sum thus arrived
at estimate and deduct the amount the brewer would want to keep for himself, and
the balance resulting will be the rent he would be prepared to pay in order to
obtain a tenancy of the house.
At p 473 of
the same case, the learned judge says this:
With those
prefatory observations, I turn now to state my findings upon the evidence. I am
driven to the conclusion that an essential element in the assessment or
evaluation of capability for trade is the trade that is actually being done and
that has recently been done. I am satisfied that in all ordinary cases it is
what any actual bidder would want to know. What, as I understand it, the valuer
is seeking to do is to estimate what rent a hypothetical tenant would consider
it worth paying, having regard to the profit he could expect to make as
licensee of the premises. He will, as the prospective tenant would, endeavour
to estimate what trade could reasonably be expected to be done by the ordinary
tenant if he were the licensee in the premises as they now are, in the area in
which they are located. While I do not doubt that such a prospective tenant
would consider in his mind whether he could make as great or a greater success
of the house than his predecessor, the base from which he would ponder on his
prospects would, I have no doubt whatever, be the actual trade his predecessor
had in fact done. In spite of evidence I have heard to the contrary, I am
satisfied that knowledge of actual trade is necessary for the proper
performance of the valuation officer’s duty. I accept the defendant’s evidence
that in the ordinary case the trade actually being done will be the measure of
the capability for trade of the house and will correspond with the assessment
of such capability which the hypothetical prospective tenant will make when
considering what rent he would be prepared to pay. It is conceded that, if the
valuation officer did know the actual trade, the amount of that trade would be
a relevant and material factor which he could properly use in making his
estimate. It is acknowledged that, when a valuation is under attack by the
brewers as being too high, the figures of actual trade are invariably produced
by them as cogent support for the contention that the valuation officer has
estimated capability too high, a contention which he would ordinarily have to
admit in the absence of some special factor to which he could assign the
discrepancy between the capability he had assessed and the actual that had been
achieved.
That case
concerned the power which the valuation officer has been given under the Local
Government Act 1948 and then under the General Rating Act 1967 to require the
ratepayer to provide certain information to the valuation officer, and, in
consequence of the conclusions to which the learned judge came in that case, he
decided it was a perfectly proper exercise of that power for the valuation
officer to require figures as to the actual trade being performed in licensed
premises in order to perform his valuation functions.
No doubt
because of that authority in the cases with which I am concerned, the valuation
officer, prior to the hearing before the valuation court, was undoubtedly
provided with the actual figures in respect of the 17 premises which were the
subject of the appeal. No doubt also being able to perform his function in the
way indicated by Thompson J, the valuation officer, having been provided with
those figures, was able to come to a conclusion as to what was the proper
valuation of each of those premises in the valuation officer’s opinion. Having
come to that conclusion, he was able, in the case of each of the appeals, to come
to an agreement with the expert instructed by the ratepayers as to what was the
proper value.
Having
achieved that situation, the rating authority was also invited to agree the
valuations. Bearing in mind what was said by Thompson J in Watney Mann Ltd
v Langley it is not surprising that the rating authority, mindful of
their duty to the ratepayers as a whole, were not prepared to agree the
valuation without having what they regarded as necessary information, namely,
the actual figures for the trade of the licensed premises in question.
Accordingly, when the matter came before the valuation court the position was
one where the valuation officer and the ratepayers were in agreement as to what
the proper value should be, but the rating authority were in the difficult
situation that they really could not themselves form any proper assessment as
to whether in their view the agreed figures were right or wrong.
There can be
no doubt now that, having regard to the decision in the case of Ellesmere Port
and Neston Borough Council v Shell UK Ltd [1980] 1 WLR 205, the
proper role of a rating authority in valuation proceedings cannot be ousted by
an agreement made between the valuation officer and the ratepayer to which the
rating authority was not a party. According to the second ground of decision in
that case, set out in the headnote, it is implicit in the scheme of Part V of
the General Rate Act 1967 that the rating authority must be involved at all
stages of the proceedings and that no concluded agreement could be reached
without their co-operation; there was no ambiguity in section 76(4) of the Act
and thereunder the rating authority had a right to appear as a party to an
appeal and to require the ratepayer to prove his case; and that the Lands
Tribunal could make a higher assessment than that determined by the valuation
court so long as its assessment was not greater than that contained in the
proposal.
The status of
the parties being that indicated by the Ellesmere case, it is convenient
now to look at the evidence as to what happened before the valuation court. As
to that there is, first of all, an affidavit on behalf of the Oxford City
Council by Mr Magor, who is the chief revenue assistant employed by the Oxford
City Council, and who represented the council before the valuation court on
January 10 1980. He says in his affidavit that the chairman ‘introduced the
proceedings by saying that this was a very informal hearing, and would the
parties be happy to deal with it in the following way — Mr Seward for the ratepayers
to introduce his case and give background argument; Mr Wren’ — and I interpose
to say that he was the representative of the valuation officer and was the
deputy regional licensed property valuer — ‘then to comment on his side of the
case’ and then Mr Magor was to make the view of the rating authority known.
Mr Magor goes
on in his affidavit to say:
Mr Seward
began by submitting a document containing photographs and brief descriptions of
each of the hereditaments. He then gave a brief explanation of the valuation of
licensed property, and referred to the case of Watney Mann Ltd v Langley
[1960] 1 QB 457. He then produced a schedule . . . saying that this
contained the present values and the values that had been agreed between
himself and the licensed property valuer, and he asked the court to confirm
these agreed values.
Mr Wren then
spoke, endorsing the method of valuation outlined by Mr Seward, and confirmed
that in negotiations with the ratepayers they had arrived at the values in the
schedule.
I explained
to the court the role of the council as rating authority, and made it clear
that the rating authority had not agreed the figures in Mr Seward’s schedule. I
referred the court to the decision of the Court of Appeal in Ellesmere Port
and Neston Borough Council v Shell UK Ltd to show the status of the
rating authority in these proceedings. I also referred to Attorney General
v BBC [1978] 1 WLR 477, as showing that a local valuation court is a
perfect example of a court of summary jurisdiction, and submitted that the
court could not come to a decision without hearing any evidence, and that the
values agreed between two parties only did not constitute evidence. I referred
to section 76(5) of the General Rate Act 1967.
He says:
After some
consultation with his colleagues, Mr Bedwell [the chairman] asked me what
further information I wanted, and I said I wanted to see the figures of actual
trade, and to know the assumptions taken in arriving at the estimated figures
used in calculating the valuations. Mr Bedwell asked the other two parties
whether this information was available, and they held a conversation amongst
themselves about how their valuations were arrived at. When pressed by the
court, Mr Seward said that I already had the estimates (which was true), and
that the actual figures were confidential. The court then retired for about
half an hour.
On their
return, one of the members of the panel asked Mr Seward whether the actual
figures were available, and he replied that he had the figures but was not prepared
to give them to the court, because in doing so he would be breaching the
confidence of his clients. Asked the same question, Mr Wren said that he also
had the figures but was prohibited from disclosing them by the Official Secrets
Act. Mr Seward said that he would be prepared to disclose his estimated figures
(but not the actual figures) if the court were cleared of all persons other
than the interested parties; the member of the panel who had asked for the
figures said that there would be little point in the court hearing evidence on
estimated figures which would not be substantiated. After some further
discussion involving each of the parties’ representatives, the court again
retired for about half an hour.
When they
returned, the Chairman said that they accepted the schedule submitted by the
ratepayers and the licensed property valuer. He added that
expert opinion of two qualified valuers.
The court’s
written decision then followed, that written decision being in these terms:
Having
listened to all the submissions of the three parties concerned we consider that
no useful purpose would be served by the submission to us of the further
information proffered by the ratepayer’s agent. In the present circumstances we
feel that we can properly confirm the figures agreed between the licensed
property valuer and the ratepayers.
In addition to
that description of what happened there is also a description given by Mr
Seward, who was the person who appeared on behalf of the ratepayers, he being a
Fellow of the Royal Institution of Chartered Surveyors, and a person who has
had thirty years of experience in his profession concerned with valuation of a
wide variety of properties, particularly the valuation of licensed premises for
rating. His account of what happened is generally the same as that given by Mr
Magor. However, in certain important respects it differs from that of Mr Magor
and so I should set out the relevant parts of his affidavit. He said that he
explained to the court that the Watney Mann method was the method used
in arriving at the assessments of the 17 public houses in question, ‘I had
previously agreed with the regional licensed property valuer on a two-party
basis. A schedule of those agreed assessments was submitted in evidence.’ A copy of that schedule, he said, was
exhibited to the affidavit of Mr Magor.
He continued:
Mr Wren for
the Inland Revenue concurred in the use of the direct method of valuation of
licensed property in general and in these 17 cases in particular. Mr Magor, for
the rating authority, maintained its right to be a party to agreements seeking
to amend rating assessments within its area. In support of that contention he
quoted Ellesmere Port and Neston Borough Council v Shell UK Ltd and
argued that in these instances his authority was being asked to accept
two-party agreements arrived at by reference to trading information not
available to him, although he acknowledged having received from the regional
licensed property valuer estimates of trade passing in each case. However, he
maintained that these were inadequate for him to form an opinion as to the
correct level of assessment of each property, such as would enable him to
satisfy the district council and the district auditor.
Mr Magor
continued by referring to the then recent Court of Appeal decision in Attorney
General v BBC which he contended conferred on a local valuation
court the same status as that enjoyed by a court of summary jurisdiction.
Accordingly, he argued the former could no more reach a proper decision on
insufficient evidence than could the latter and thus the schedule of agreed
assessments submitted by me did not constitute sufficient evidence to enable
the court to decide the matters before it.
Mr Magor was
then asked by a member (Mr Burkitt) what in his view constituted proper figures
in support of the assessment agreed by the other two parties. He replied that
he would require actual trade figures in each case. Mr Wren interjected at that
point to remark that disclosure of actual trade to a third party without the
ratepayer’s consent would constitute a breach of both the Official Secrets Act
and the good faith established between the Valuation Office and ratepayers.
At this
juncture the court adjourned and on resuming some 20 minutes later the chairman
asked Mr Magor if he had been given the estimated trade figures in each case,
to which he replied affirmatively. The chairman then asked if I would disclose
the actual trade of the public houses involved, to which I replied that I would
only do so with the greatest reluctance provided the court were cleared of all
but the interested parties as this information was confidential to my clients.
Mr Magor was
then asked by the chairman if he had requested actual trade figures and if so
had they been refused. He replied affirmatively to both questions, citing his
letter of November 29 1979 as corroboration — a copy of which was produced and
in respect of which Mr Seward said — It will be noted that, in fact, the only
request was for ‘a profits basis valuation’ of but three of the subject
properties.
Mr Seward goes
on to say:
In response
to a direct request from Mr Magor for the actual trade figures I indicated that
to assist the court I would offer my several valuations in evidence but
emphasised that the trade used in each case was not necessarily the actual
trade in any given year but an estimate of what in my opinion as an experienced
licensed property valuer was a reasonably maintainable trade for each house.
Asked by a member (Mr Burkitt) if my valuations would assist him, Mr Magor
replied that they would be no use for the purposes of cross-examination unless
supported by the actual trade in each case. The member then remarked that there
would be little point in insisting on production of the valuations if Mr Magor
considered that they would serve no useful purpose and as the court had no
skill in valuation it could do no more than accept as expert the evidence of
the several assessments agreed between the regional licensed property valuer
and myself.
He said:
The court
then adjourned for a further period of 15 minutes and on its return announced
that no useful purpose would be served by seeking further information and
consequently the assessments entered in evidence by me on the ratepayers’
behalf . . . would be confirmed.
He adds:
At no time in
the course of these proceedings was any evidence submitted on behalf of the
Oxford City Council.
In so far as
there is a conflict between Mr Seward’s account of what occurred and Mr Magor’s
account, this court, only having the affidavits before it, cannot resolve that
dispute. The position is well established that as the applicants have the onus
of proof placed upon them to establish their case, in those circumstances the
proper course to adopt is to act on the evidence given on behalf of the
respondents — here that of Mr Seward — in so far as it is impossible from the
internal evidence to come to any conclusion as to which account is the more
credible.
In order to
assess the effect of that evidence it is necessary to look at the statutory
framework which governs valuation courts. Section 76 of the General Rate Act
1967, subsection (2) provides:
The procedure
of a local valuation court shall, subject to any regulations made in that
behalf by the Minister, and subject to subsection (3) of this section, be such
as the court may determine; and the court — (a) shall sit in public, unless the
court otherwise order on the application of any party to the appeal and upon
being satisfied that the interests of one or more parties to the appeal would
be prejudicially affected; and (b) may take evidence on oath and shall have
power for that purpose to administer oaths.
I draw
attention to the fact that subsection (2) makes it clear that a valuation court
is not bound to take evidence on oath and, secondly, that in general terms the
procedure to be followed is that which the court should determine.
Subsection (4)
provides:
On the
hearing of an appeal to a local valuation court — (a) the appellant; and (b)
the valuation officer, when he is not the appellant; and (c) the owner or
occupier of the hereditament to which the appeal relates, when he is not the
appellant; and (d) the rating authority for the rating area in which the
hereditament in question is situated, when that authority are not the
appellant; and (e) the objector, where he is not one of the persons aforesaid,
shall be entitled to appear and be heard as parties to the appeal and examine
any witness before the court and to call witnesses.
The reference
to ‘examine’ before me has been accepted, quite clearly correctly, as including
cross-examination of witnesses who give evidence.
Subsection (5)
provides:
Subject to
the provisions of this Act, after hearing the persons mentioned in subsection
(4) of this section, or such of them as desire to be heard, the local valuation
court shall give such directions with respect to the manner in which the
hereditament in question is to be treated in the valuation list as appear to
them to be necessary to give effect to the contention of the appellant if and
so far as that contention appears to the court to be well founded; and the
valuation officer shall cause the valuation list to be altered accordingly.
The
regulations made pursuant to section 76 of the Act are the Rating Appeals
(Local Valuation Courts) Regulations 1956. Regulation 4 deals with the date and
place of the hearing; regulation 5 provides for representation and allows the
rating authority to appear by clerk or other officer duly appointed, or by
counsel or solicitor, and it says that any other person entitled to appear may
appear in person or by counsel or solicitor or by any other representative.
Regulation 11 provides that non-compliance with any of the regulations other
than regulation 3 shall not render any proceedings in the appeal void unless
the court shall so direct, but the proceedings may be set aside either wholly
or in part as irregular, or
court thinks fit.
It is of
significance when considering the powers of the valuation court to have in
mind, firstly, that the valuation court is not an inferior court for the
purpose of contempt proceedings, and, secondly, that the valuation court has no
power to order parties to give discovery, nor is there any method available to
it whereby it can compel witnesses to give evidence before it, or answer
questions if they decide to give evidence.
The grounds
relied upon in support of the application by the Oxford City Council are three
in number. First, complaint is made that at the hearing of the appeal, despite
the protest from the rating authority, the local valuation court decided to
accept the figures agreed between the licensed property valuer and the
ratepayers without hearing any evidence whatsoever. As I understand it, the
effect of that ground is that the valuation court came to a decision which is
based on no evidence.
The second
ground is that such a manner — and that is a reference back to what happened at
the hearing before the valuation court — of conducting the appeals was contrary
to the provisions of section 76(5) of the General Rate Act. I read that
subsection earlier. The significance of it is that it says that after hearing
the persons mentioned in subsection (4) of the section, or such of them as
desire to be heard, ‘the local valuation court shall give such directions with
respect to the manner in which the hereditament in question is to be treated.’
The third
ground is that the manner of conducting the appeal was contrary to natural
justice.
Of those three
grounds it seems to me that the most important one is the third ground, namely,
that the manner of conducting the appeals was contrary to natural justice.
However, I will deal with the other two grounds shortly as well.
First of all,
with regard to what I would describe as the ‘no evidence’ ground, it appears to
me that that ground is one without substance because what happened before the
valuation court is that the valuation court had, in an informal manner, placed
before them a schedule of figures which two experts were saying, in effect,
were their opinion as to the value of the premises. It is true that no material
was placed before the valuation court as to the basis upon which that opinion
as to value had been reached. However, even though the manner in which the
evidence was tendered was informal it was, in my view — if the matter rested
only on that point — evidence upon which the local valuation court was clearly
entitled to act. Indeed, if that was all that was involved in the application
before me, then the position would be one where it would be difficult to see
any basis whatsoever for criticising the valuation court. The only evidence
they had had was the evidence of the opinion of the two experienced valuers
and, in the absence of any evidence to the contrary — as the chairman indicated
— there was little else that the valuation court could do apart from accept
that evidence.
So far as the
second ground is concerned, it seems to me that that is linked to the third
ground. The position on the evidence is this. The rating authority made no
request to give evidence itself. There was no refusal by the valuation court to
receive any evidence from the rating authority. So far as the evidence advanced
by the appellants and the valuation officer is concerned, there was no
application made by the rating authority to question the persons responsible
for giving the evidence as to valuation. All that there was was the request
made on behalf of the rating authority to be provided with the actual trade
figures which had undoubtedly played a part in forming the conclusion to which
the valuation officer’s expert and the appellants’ experts had come as to
value. It does not seem to me that in the absence of any direct request by the
rating authority to question a witness, or to give evidence themselves, it can
be said that there is any contravention of the provisions of subsection (5) of
section 76.
It is the
third ground of appeal, namely, the question of natural justice, which gives
rise to the greatest difficulty. So far as that ground is concerned, it does
seem important to me that one does not approach the evidence in too technical a
manner. The parties before the valuation court were not represented by lawyers
and the proceedings were clearly being conducted in an informal manner. In
considering the question of natural justice it therefore seems to me to be
appropriate to look at the effect of the evidence as a whole. In doing that, the
conclusion which I have come to is that what the rating authority were saying
is this: ‘Without the actual trade figures we are unable to conduct our case.
We want to have those figures because with them we will be able to decide what
submissions we should put before the court as to value.’
In considering
that situation it is important, in deciding whether there has been a
contravention of natural justice, to look at the statutory structure of the
body concerned. This particular statute is one which gives to the valuation
officer a power to obtain discovery under the provision considered by the court
in the Watney Mann case. A similar power is not given to the rating
authority and when one examines the underlying objection of the rating
authority it really comes to this, that there should be a power available to
the rating officer for it to obtain the same information which is available to
the valuation officer. If there had been such a statutory power then the
difficulty that this case has thrown up — undoubtedly a genuine difficulty —
which is in the way of the rating authority, would not have arisen.
However, I
have got to approach the question as to whether or not there has been a breach
of natural justice on the basis that there was an express power given to one
party and no power given to another party. I have also got to approach it on
the basis that the valuation court has no means for forcing the parties, if
they do not want to do so, to produce figures. The situation is one where the
valuation officer’s representative indicated a reason for not producing the
actual trade figures which is not supported before me. I emphasise that he had
no opportunity to obtain legal advice and had no legal advice, but certainly
whereas other questions of privilege might arise Mr Fletcher has made it clear
that no question of the Official Secrets Act, or other public interest
privilege, could arise which would prevent him from producing the information.
However, whatever his reasons for not producing the figures the situation was
that if he was not prepared to do so the court could not force him to do so.
Again, so far as the appellants were concerned, assuming for the moment they
were refusing to produce the figures, the position was that the court could not
force them to do so.
That being the
situation, it seems to me that it cannot be said, in relation to this
particular body, that the mere failure to provide the figures amounted, in
itself, to a breach of natural justice.
It may well be
that in many cases an authority will be protected because a valuation court
will not attach any, or at best only minor, importance to evidence produced by
experts which is not supported by the background material when that material is
required by a rating authority so that it could be tested. The valuation court,
like any other sensible tribunal, will take into account in its assessment of
the evidence the fact that the witnesses concerned have refused to answer
questions that are put to them or have failed to make themselves available for
cross-examination. But although a tribunal will take that into account, it
cannot be said that if they attach weight to evidence which is put before them
an informal body of this sort has contravened the rules of natural justice
merely because one of the parties to the appeal has not the power to test that
evidence, bearing in mind the fact that they have no method of securing to that
party a power of cross-examination in the absence of any statutory provision
enabling them to make that procedure available.
It is right,
however, before departing from the question of natural justice that I should
make it clear that on the actual evidence of Mr Seward, in this case, there was
no refusal in terms to provide the actual figures. He did offer to disclose
them, with reluctance, provided the court was cleared of all but the interested
parties, because he regarded the information as confidential. Clearly, the
figures as to actual trade may be confidential and the requirement that those
figures should be treated as being confidential was not unreasonable. It would
not be necessary for the court to be cleared, using the words Mr Seward used.
It would be possible for him to write the figures down, and one can see many
ways in which the confidential nature of the figures could be protected and yet
they could be disclosed. But that matter does not seem to have been taken up by
Mr Magor and, bearing in mind that it was not taken up by Mr Magor and, bearing
in mind that it was not taken up by
valuations in evidence, even if I had come to a different conclusion from that
which I indicated earlier, it would be my view that there had been no refusal
in this case to make available the material which was being sought by the
rating authority.
Quite apart
from the conclusion which I have come to about the merits of this case, I do
regard it as one which raises, in very clear terms, the question as to whether
or not judicial review is the appropriate form of procedure to deal with the
difficulty which has arisen. From the local valuation court, in relation to the
17 appeals, there was an appeal in turn to the Lands Tribunal. That appeal is
by way of rehearing and is an appeal both into facts and the law. The Lands
Tribunal is a body which is peculiarly familiar with questions of valuation and
it is also a body which has got considerably wider powers than the local
valuation court. In particular, it has got powers for ordering discovery. Those
powers are contained in the Lands Tribunal Rules, rule 40 of which provides
that a party to proceedings shall deliver to the registrar, at his request, any
document or other information which the tribunal may require and which it is in
the power of that party to deliver, and shall afford to every other party to
the proceedings an opportunity to inspect those documents, or copies of them,
and to take copies, provided that nothing in this rule shall be deemed to
require any information to be disclosed contrary to the public interest.
In addition,
the provisions of section 12 of the Arbitration Act 1950 apply to appeals to
the Lands Tribunal, and section 12 of the Arbitration Act enables the High
Court to make orders in respect of discovery of documents and interrogatories,
and also gives the court power to order subpoenas duces tecum to issue in
respect of appeals to the Lands Tribunal. Before the Lands Tribunal, therefore,
the rating authority would be able, if it was proper to do so, to obtain
discovery either under the rules to which I have referred or under section 12
of the Arbitration Act 1950.
The extent of
the tribunal’s powers to order discovery are, as I am informed, the
subject-matter of proceedings now before the courts. There has been a decision
in relation to that matter which is under appeal.* For present purposes it is not necessary for
me to go into the question as to the extent of those powers. It is sufficient
if I indicate the powers because, if it should be held that the powers are
limited, then in my view if they would not cover the complaint of the rating
authority in this case that would be the clearest indication that the intention
of the legislation under consideration is that the rating authority should not
be able to obtain the information which they require. If, on the contrary — as
I am bound to say I anticipate will be the position — the rating authority can
obtain disclosure of the actual figures then in proceedings before the Lands
Tribunal they will be able, by way of discovery, to obtain the information
which they now seek.
*See City
of London Corporation v Watneys London Ltd (1980) 258 EG 561, [1981]
1 EGLR 191.
I do recognise
that from the rating authority’s point of view, always to have to go to the
Lands Tribunal to obtain discovery if that information is not provided before
the valuation court would be a considerable burden. However, once the present
conflict as to the extent of the powers of the tribunal to order discovery is
resolved, I would expect the effect on the practice of the experts engaged in
valuation exercises of the sort that was involved in this case to be the same
as that which arose in consequence of the Watney Mann case. Once it is
clearly decided either that the disclosure has to be given of the actual trade
figures, or the disclosure need not be given of the actual trade figures,
before the Lands Tribunal, the valuers will follow that guidance and in
reaching their decision as to whether or not to make disclosure to the rating
authority will follow the practice laid down by the Lands Tribunal. For them to
do otherwise would be pointless, since it would merely result in appeals before
the Lands Tribunal which would result in substantial costs being incurred for
which their clients would be responsible.
I also
recognise the fact that before the Lands Tribunal the rating authority would be
in a position where it would be the appellant whereas previously it would be in
the position that it need not prove anything. It was entitled to sit back and
allow the other parties to establish their contentions. In my view, this is not
a real handicap to the rating authority because in situations where the value
has been agreed between the representative of the ratepayer and the valuation
officer, in practice the onus will be on the rating authority because where two
valuers are agreed as to the figure, that figure will normally be accepted in
the absence of evidence to the contrary, and if the situation is one where the
rating authority is going to challenge that agreement it will have to do so on
the basis of the material which it obtains as to the trade figures, and the
onus will be on it as a matter of practice to do so.
The third
matter relied upon by the rating authority for saying that an appeal is not a
satisfactory solution for the difficulties which it says arose in this case
before the valuation court is based upon the judgment of Megarry J (as he then
was) in the case of Leary v National Union of Vehicle Builders [1971]
1 Ch 34. That judgment of Megarry J was considered by the Privy Council in the
case of Calvin v Carr [1979] 2 All ER at page 440. In the course
of delivering the opinion of the Board in Calvin v Carr Lord
Wilberforce dealt with the position as to whether a breach of natural justice
in an inferior body could be cured by the decision of an appellate body which
conducted its proceedings in a manner which was free from the defect of natural
justice. Lord Wilberforce indicated that there were categories of cases and the
result depended upon which category of case the matter under consideration
fell.
I have no
doubt that, approaching the problem in the way indicated by Lord Wilberforce,
if a fair and proper hearing takes place before the Lands Tribunal, where all
the material which the rating authority requires is available to it, then that
would cure a breach of natural justice, if there be such a breach, which took
place in a valuation court because of the rating authority’s being deprived of
material which should have been made available to it before that court.
All parties to
the proceedings before the valuation court have a right of appeal, which is
unfettered, to the Lands Tribunal. The appeal is one that, as I have already
indicated, involves a complete rehearing and as long as the rating authority
obtains a full and fair consideration of its case at that stage it is difficult
to see how it can be prejudiced, particularly bearing in mind the fact that the
Lands Tribunal has got power to protect the rating authority in relation to
matters as to costs.
In favour of
disputes of the sort which arise in cases of this kind being dealt with before
the Lands Tribunal is the fact that in any event the proceedings may have to go
to the Lands Tribunal. If this court intervenes, then all that it can do is to
quash the decision in question. It has no power to compel the ratepayer, or the
valuation officer, to make available to the rating authority the actual trade
figures of a particular appellant before the valuation court. There is no way
that this court can decide what is the proper decision to which the valuation
court should come. All it can do is to return the matter to the valuation court
where the result, so far as the parties are concerned, could be equally as
unsatisfactory as the result which has previously taken place. The problem can
only properly be resolved before the Lands Tribunal and, therefore, in my view
it is much better that a problem of the sort thrown up by this case should be dealt
with by an appeal to the Lands Tribunal rather than by way of judicial review.
If, therefore, I had taken the view, contrary to the conclusion to which I have
come, that this case was a proper case in which to order the quashing of the
decision of the valuation court, I would have followed previous authority and,
as a matter of discretion, refused to intervene. This is a course which was
adopted by the Divisional Court in the case of R v Hackney Borough
Council [1968] 19 P & CR 87 and is clearly the more convenient course
where questions of the sort which have arisen in this particular application
arise.
This is a
typical example of a situation where, in my view, there are two alternative
remedies and the more convenient remedy is the remedy provided by statute of an
appeal to the Lands Tribunal. I would, therefore, in any event, have, as a
matter of discretion, refused relief in this case.
The applications were dismissed, the applicants to
pay half the costs of each of the respondents.
