Rating–No relief for disabled solicitor’s Kensington flat–‘Predominant purpose’ of person providing accommodation is relevant to the interpretation of section 45, General Rate Act 1967–Here the predominant purpose was the provision of a home
This was an
appeal by a valuation officer against a majority decision of the Court of
Appeal holding that a flat occupied by the respondent, Neville David Vandyk, a
disabled person, at 7 Addisland Court, Holland Villas Road, London W14,
qualified for derating under section 45 of the General Rate Act 1967, as being
a structure provided for the care or after-care of a person suffering from
illness.
G Rippon QC
and A Fletcher (instructed by the Solicitor of Inland Revenue) appeared for the
appellant, and D Widdicombe QC and M Horton (instructed by N D Vandyk)
represented the respondent.
In his speech,
LORD WILBERFORCE said that the respondent was the lessee of a large flat on the
second floor in a building in Kensington, London. It had five rooms, two
bathrooms, a dining hall, kitchen and balconies. The present appeal related to
the rateable value of this hereditament. The respondent in 1968 and again in
1971 made proposals for alteration in the valuation list so as to show the
value as nil, as against the previous gross value of £500, rateable value £388.
Objection was taken to both proposals, and on December 30 1971 the local
valuation court ordered that the assessment should be amended to £425 gross,
£326 net. Both sides then appealed to the Lands Tribunal, which on June 28 1973
fixed the assessment at site value, making £80 gross, £50 net. Then a case was
stated for the Court of Appeal which by a majority dismissed the present
appellant’s appeal [1975] 2 WLR 797. The appellant sought to have the original
assessment restored. There was an alternative contention on the part of the
respondent that in any event the assessment should be reduced as regards two
rooms in the flat.
The respondent
was a severely disabled person, as the result of poliomyelitis suffered in
1947, which had left him paralysed in both legs and his left arm. He was
confined to a wheel-chair, and it was not disputed that he was in need of
after-care, both in an ordinary sense and within the statutory meaning of those
words. In plain terms he needed constant attention; this was provided by his
wife, who lived in the flat, and, when she was away, by professional
attendants. The respondent acquired the hereditament in 1968, having previously
lived in another flat. Among the reasons why he chose it were the facts that
the doorways were wide enough to allow easy passage for his chair and that a
lift, porterage and central heating were all available. After moving in, he had
certain adaptations made to his bedroom and one bathroom (the two rooms that
had been mentioned above), adaptations that were necessary or suitable for a
man suffering from his disability. In general, it was fair to say that the flat
was a normal residential flat which suited the circumstances and requirements
of Mr Vandyk.
Should he, in
these circumstances, be relieved from rates in respect of his hereditament
except as to the site value? The answer
must be found in statute, but before he (his Lordship) entered the labyrinth,
he thought it advisable to state some general considerations. Everyone had to
live somewhere, but there were alternatives. A man might find his own
accommodation, or he might go to a housing authority and ask it to provide a
house; or if he was seriously ill–mentally or physically–he might go to a
health authority and ask to be put in accommodation where he could be looked
after. Health authorities had special powers as to persons requiring care or
after-care and these would have to be considered. If a man provided his own home,
but had to spend more on it because he was ill or because he needed after-care,
one might expect to find in the legislation provision for relieving him from
having to pay more rates on account of the extra expense. If, for example, he
had to provide a garage for an invalid chair, it would be very unfair to charge
him rates on it, and the same principle could be applied to adaptations. One
might go so far as to expect that if, exercising his choice, a man, on account
of a disability, selected a dwelling which was more expensive than one which he
would acquire if he were not disabled, he should get some relief on account of
this excess.
Apart from
this type of case, however, one might question whether a man in need of care or
after-care should be relieved from rates on his residence altogether. This
seemed to introduce a different principle, and if it were to be admitted one
would expect to find clear words. The consequences of giving such relief would
be very considerable. It would mean relieving from rates all hereditaments (ie
buildings) occupied by persons in need of care or after-care, and this whether
or not the particular hereditament needed any adaptation. The relief could not
be confined to persons like the respondent, but would equally have to be available
for persons suffering from heart disease, or mental illness, if they could
claim to be in need of care, and regardless of whether their condition made
adaptation necessary. This was pointed out by MacKenna J in the Court of
Appeal, and he (his Lordship) could see no answer to it. The majority in the
Court of Appeal saw the difficulty and tried to meet it, but he did not think
that they succeeded. Cairns LJ said:
I do not
consider that the physical characteristics of the structure can be wholly
disregarded.
This was a
negative formula, and it was not clear what positive test it intended to apply.
If it was saying that rating relief depended on some physical characteristics,
it created a distinction, for which no justification appeared in the
legislation, between those who needed a specially-adapted residence and those
who did not. Moreover, it could not be enough, in order to entitle the occupier
to relief, merely that the hereditament had some physical
characteristics, but if these had to be specially relevant to the illness or
disability, it was difficult
a different test:
In order to
attract rating relief a structure must be of a size and type reasonably
suitable for the ratepayer’s needs for after-care.
These were very
general words, and it was hard to see how they excluded any residence the
ratepayer might reasonably choose. To say that he might not choose a castle was
hardly a significant restriction, and he (Lord Wilberforce) did not think that
the present respondent could succeed without the decision carrying with it the
consequence that anyone in need of after-care who acquired a residence could
claim total tax exemption for the building so long as he could say that it was
suitable for the purpose of after-care being provided.
Did Parliament
intend so far-reaching and indiscriminate a bounty at the expense of other
ratepayers? Though Parliament could, if
it wished, have gone so far as this, one must look carefully at the provisions
relied on. The relevant provision was section 45 of the General Rate Act 1967,
first enacted as section 9 of the Rating and Valuation (Miscellaneous
Provisions) Act 1955. There were several things that struck one about the
section. First, the introductory words did not suggest the total derating of a
hereditament. They suggested that there was a hereditament, but that in valuing
it for rates you were not to take account of special features related to
illness or disability, in other words that the purpose was to grant the limited
relief of the kind he (his Lordship) had mentioned, relief for special features
needed on account of the disability. Secondly, the section throughout referred
to ‘structure’; that was no doubt a general enough word, but the fact that it
was used after a reference to the hereditament suggested that the structure was
not itself the hereditament but was something added to the hereditament. It was
this addition which was to be ‘disregarded,’ but one was then left with the hereditament
to value. Thus in paragraph (a) ‘structure’ clearly referred to a garage for an
invalid chair.
Thirdly, the
section referred to section 28 of the National Health Service Act 1946 and
section 29 of the National Assistance Act 1948, and neither of these sections
referred to accommodation. So far as the first Act was concerned, it was
pointed out that this had now been replaced by the Health Services and Public
Health Act 1968, section 12 of which (replacing section 28 of the 1946 Act) did
now refer to the provision, equipment and maintenance of residential
accommodation for after-care, and it was said that section 28, through more
general language, had the same effect. But what was relevant was the
interpretation of the words used in the General Rate Act 1967, the question
being whether, when section 45 (b) referred to structures, it included
residential accommodation. Even if the earlier Act covered residential
accommodation as well as ‘structures,’ it seemed a non sequitur to say
that the later Act (that of 1967) when it referred to structures referred to
residential accommodation. As for the Act of 1948, it seemed clear that section
29 did not authorise the provision of residential accommodation. Section 21 of
the same Act did so authorise, and the reference in paragraph (c) to section
29, not to section 21, seemed significantly to suggest that ‘structures,’ at
least in that paragraph, did not include residential accommodation.
One would thus
so far be inclined to accept a restrictive interpretation of the word
‘structures,’ and that was what, in the dawn of innocence, all three members of
the Court of Appeal did in Jewish Blind Society Trustees v Henning
[1961] 1 WLR 24. In Almond v Birmingham Royal Institution for the
Blind [1968] AC 37 the approval of the House was given to an unrestricted
meaning of ‘structure’ and that must be accepted as the law. But the very fact
that ‘structure’ now bore a wide meaning might make their Lordships more
inclined–it certainly permitted them–to find some limitation on the width of
the section in other provisions. The fact that Parliament for its own purposes
chose to legislate in an obscure manner did not force their Lordships to be the
blind led by the blind. Moreover, it was at least arguable that even through the
literal approach, a result less far-reaching than that contended for by the
respondent might follow. Assume, as was required by paragraph (d), an identical
or similar hereditament supplied by the respondent instead of by the local
health authority. In accordance with section 45 paragraph (b) and the
incorporated legislation, accommodation could only be supplied if the dominant
purpose of the supply was to provide after-care or to enable after-care to be
given. But the dominant purpose for which this hereditament was supplied was to
provide a residence for the respondent.
He (his
Lordship) agreed with this argument, but whether right or not it was clearly a
maintainable argument, and he rested on the principle that if one possible
interpretation of a statute led to a result contrary to the evident general
purpose, one should prefer to it an interpretation also reasonably possible
which did not lead to such a result. He would therefore hold that the
respondent did not bring himself within paragraph (d) and that his claim
failed. He was also of opinion that the alternative claim for relief in respect
of the two rooms failed for the reasons given in the opinion of Viscount
Dilhorne. He would add that if the scope of section 45 was to be extended far
beyond local authorities and charities to many thousands of citizens, many of
them ill or handicapped, or if the contrary was the case, Parliament really
ought to make its dispositions intelligible. He hoped, too, that it might make
them fair and rational. He would allow the appeal.
LORD DILHORNE
said that the object sought to be secured by the enactment of section 9 (1) of
the Rating and Valuation (Miscellaneous Provisions) Act 1955, now replaced by
section 45 of the General Rate Act 1967, appeared to him to have been to secure
that the occupier of a hereditament should not have its gross value increased
in consequence of it containing a structure put there for the use of someone
suffering from a disability or illness. Paragraph (a) of the section told a
valuation officer to ignore a structure belonging to the Minister of Health and
supplied by him or (before August 31 1953) by the Minister of Pensions for the
accommodation of an invalid chair or other vehicle constructed or adapted for
use by invalids or disabled persons. So, to decide whether a structure came
within this paragraph, a valuation officer must not only ascertain to whom the
structure belonged and who supplied it, but also its function or purpose. It
would have been very unfair if an occupier of a hereditament who supplied such
a structure for such a purpose at his own expense were to have the gross value
of his hereditament increased in consequence, when that would not have happened
if the structure had belonged to and been supplied by a ministry; and paragraph
(d) when read with paragraph (a) operated to prevent such unfairness. Similarly
it exempted by paragraph (b) any structure belonging to a local authority, or
to certain voluntary organisations, supplied for the use of any person in
pursuance of arrangements made under section 28 (1) of the National Health
Service Act 1946, those arrangements being for the prevention of illness, for
the care of persons suffering from illness or for the after-care of such
persons. In relation to this paragraph, a valuation officer had again to
determine not only to whom the structure belonged and by whom it was supplied,
but also that it was supplied for use by a person in pursuance of the
arrangements mentioned. If so supplied, it was to be inferred that the
structure was supplied for use for the prevention of illness or for care or
after-care; and the valuation of the hereditament was not to be increased in
consequence of the presence of a structure which would not be there but for a
person’s disability or infirmity.
Examination of
the section led him (his Lordship) to the conclusion that the first question to
be considered in relation to its application was whether there was any
structure in or
disability or infirmity or if it was not required for the prevention of
illness. The section did not define ‘structure,’ but it followed from Almond
v Birmingham Royal Institution for the Blind [1968] AC 37 that a
structure however large and however constructed might be regarded as coming
within the section. It might be something in or on the hereditament; it might
indeed constitute the hereditament. The respondent claimed that if his main
argument as to the flat as a whole failed, the bathroom and his bedroom as
altered should be regarded as a structure to which the section applied. He (his
Lordship) regretted that he could not come to the conclusion that by reason of
these alterations, the bedroom and bathroom were to be regarded as a
‘structure’ which would not be there but for his incapacity. Even if they were
to be so regarded, he (Lord Dilhorne) doubted very much if the alterations made
would increase the gross value of the flat, and it was the increase in the
gross value due to the presence of a structure to which the section applied
which had to be ignored. In his opinion, the respondent’s claim in relation to
these two rooms failed.
As to the
respondent’s main claim that in ascertaining the gross value of the
hereditament the value of the flat must be ignored as being a structure to
which paragraph (b) or (c) or (d) of the section applied, he (his Lordship)
could not regard the flat as a structure for the purpose of care or after-care
or for the prevention of illness or for the welfare of a handicapped person. It
appeared to be a perfectly ordinary flat of five rooms, two bathrooms and
dining-room, similar to the other 37 flats in the building. The flat was the
respondent’s home. In it he received after-care, but it was not a building or
structure designed for his after-care or welfare. It was not a hereditament of
which the gross value would, if the section did not apply, be increased due to
the presence there of a structure required for his after-care or welfare as a
handicapped person. If it had been the intention of Parliament that persons in
the position of the respondent, and other handicapped and ill persons, should
be relieved of liability for rates in respect of their homes, he (his Lordship)
would have expected that to have been clearly stated. The appeal should be
allowed.
LORD SIMON OF
GLAISDALE agreed with the speech of Lord Dilhorne.
In a
dissenting speech, LORD EDMUND-DAVIES said that in Almond v Birmingham
Royal Institution for the Blind [1968] AC 37 Lord Reid said of section 9
(1) (d) of the Rating and Valuation Act 1955 that ‘it raised . . . difficult
problems.’ That observation was equally
true of its successor, section 45 of the General Rate Act 1967, as the present
appeal amply demonstrated. He (his Lordship) could find no warrant for the
appellant’s submission that to get rate relief, accommodation had to be of an institutional
character. Furthermore, he thought that the proper question was not whether a
local health authority or voluntary organisation would be likely to provide such
private accommodation for private after-care as the flat with which the House
was presently concerned, and still less whether any local authority or
voluntary organisation had in fact made such provision. The relevant question
was whether the authority or organisation could lawfully provide it. The Lands
Tribunal and all three members of the Court of Appeal held that they could, and
in his (Lord Edmund-Davies’s) judgment that conclusion was correct. He did not
think it correct to say that a local health authority could do no more than
provide care (defined by Denning LJ in Minister of Health v Royal
Midland Counties Home for Incurables [1954] Ch 530 at 547 as ‘the homely
art of making people comfortable and providing for their well-being’), or that
if this care was provided by members of the family of the person being cared
for ‘accommodation’ could never be provided.
Then did the
foregoing conclude the inquiry? In other
words, if the local health authority could have supplied this flat to Mr Vandyk
for the purpose of his after-care by members of his family, did that
automatically entitle him to rating relief?
Or were (a) his own purpose in taking the flat, and (b) the purpose for
which it was being used, of relevance?
As to (a), Cairns LJ in the Court of Appeal rejected the submission for
the valuation officer that the relevant question was whether Mr Vandyk’s ‘sole
or dominant purpose’ was for the purpose of after-care, and added:
Now there is
not in the legislation any adjective qualifying the word ‘purpose.’ This may be contrasted with the Rating and
Valuation (Apportionment) Act 1928, the proviso to section 3 (1), where an
industrial hereditament is defined so as not to include a factory if it is
primarily used for non-industrial purposes.
In similarly
rejecting the dominant purpose test, Lawton LJ said:
The question
which should be asked is this: why did the ratepayer provide himself with this
flat, being a structure for the purposes of section 45 of the General Rate Act
1967?
He (Lord
Edmund-Davies) thought that such inquiry was relevant, and in his opinion both
purposes for which the hereditament was at the date of the proposal being used
bore upon the entitlement to be derated. MacKenna J considered that Mr Vandyk’s
dominant purpose ‘was to provide a home for himself and his family,’ and
accordingly held against his claim to be derated. As such a purpose was
inevitably of considerable importance whenever accommodation was being sought,
and might indeed have chief prominence and importance, the adoption of the
dominant purpose test would (as counsel for the valuation officer candidly
conceded) for all practical purposes mean that no person seeking private
accommodation for himself and his family would ever establish entitlement to be
derated under section 45, whatever the type of accommodation sought and however
specialised his needs. He (his Lordship) could not accept this, and thought
that the proper way of looking at this case was that adopted by Lawton LJ in
dealing with the question he had posed:
On the
evidence the answer is clear. He wanted somewhere to live which was not an
institution; and if he was to live outside an institution his place of abode
would have to have certain physical characteristics or be capable of being
adapted to have those characteristics which would enable him to receive
after-care, for example, the absence of steps, doors wide enough to take a
wheelchair, wall or ceiling devices to enable him to move in bed, washbasins at
a convenient height, specially adapted wc seats, and reasonable accommodation
for his personal attendant, without whose help he could do very little.
The appeal
should be dismissed.
LORD FRASER OF
TULLYBELTON said that the purposes which qualified under paragraph (b) of
section 45 were those specified in section 12 of the Health Services and Public
Health Act 1968. They were three in number: the prevention of illness, the care
of persons who were ill, and the after-care of persons who had been ill. The
provision of residential accommodation must be for one of those purposes if it
was to be intra vires a local health authority or voluntary organisation
acting under section 12, and it was implicit in the section that one of them
must be the predominant purpose in the mind of the authority making the
provision. Though the word ‘predominant,’ or any equivalent, did not appear in
the section, it was necessarily to be implied in order to give effect to the
scheme of the section. Section 12 was dealing, as the side-note showed, with
‘prophylaxis, care and after-care,’ and subsection (1) began by conferring on a
local health authority a general power to make arrangements for those three
purposes. Then it proceeded, without prejudice to the generality of the opening
provision, to confer some more specific powers, one of which was the power to
make arrangements for the provision of residential accommodation. All the
specific powers were intended to be used for one of the three purposes, and
there could be no doubt of that so far
was expressly so stated (section 12 (1) (a)). If those were not intended to be
the predominant purposes, the powers of a local health authority would be
extended far beyond the bounds of public health.
He (his
Lordship) agreed with the statement of MacKenna J in the Court of Appeal that
nothing less than a dominant purpose of the supplier to prevent illness or to
provide for the care or after-care of persons suffering from illness would
suffice to bring a structure within paragraph (b) of section 45 of the Act of
1967. If that was the meaning of paragraph (b), then when paragraph (d)
referred to a structure which was of a kind ‘similar to’ that mentioned in
paragraph (b), it must refer to one which was supplied for the predominant
purpose of care or after-care. The predominant purpose must in each case be
that of the supplier, who in this case was the respondent himself. The
suggestion that the respondent’s flat had been ‘supplied’ for his use by the
owner who let it to him seemed quite untenable. It was supplied for the use of
the respondent by himself when he took a lease of it. It was therefore the
predominant purpose in his mind that was material, and it seemed clear that the
predominant purpose of the respondent in taking this flat was to have
somewhere, other than an institution, for himself and his family to live. He
chose this particular flat, after a long search, because it suited his
requirements by having, among other things, wide doors through which he could
pass in a wheeled chair, and he had made some alterations in it to make it more
convenient. But it was not possible to treat these matters as showing that his
main reason for taking it was to obtain after-care. His main reason was to have
a home. The claim for derating under paragraph (d) read with paragraph (b) must
accordingly fail.
The appeal
was allowed. The valuation officer had previously undertaken to bear the costs
in any event.
