The ratepayer challenged the rateable value of his business premises. A business park had been erected within an enterprise zone nearby. Because properties in the enterprise zone were subsidised, the rental value of his own premises was reduced. It was said that this should be allowed for in valuing the property under section 20. The Lands Tribunal had held that the presence of the enterprise zone were a change in the state of the locality and adopted the lower valuation. The valuation officer appealed, submitting that the valuation was only concerned with ‘physical factors, or at least factors which affect the physical use and enjoyment of the hereditament’, as distinct from ‘benefits or disbenefits that are merely financial or economic’. The ratepayers rejected ‘the distinction which counsel for the valuation officer still draws between physical and non-physical factors.
Held: The court recognised the dstinction raised by the valuation officer.
Woolf LJ said: ‘In general, and I emphasise the words ‘in general’, I accept the approach of counsel for the valuation officer that s 20(1)(b) is limited to physical factors or factors which affect the physical enjoyment of a hereditament. In broad terms the way s 20(1)(b) is intended to operate is that you value the hereditament and any building upon it as it exists at the date of proposal in the setting in which it is situated (with that setting having the actual characteristics of the locality as they would be observed at that date if the locality was to be inspected) on the basis of its 1973 value. For the purposes of carrying out that valuation, it is the economic climate, both local and national, of 1973 which has to be considered and not that at the date of the proposal except to the extent that alterations in the economic conditions result in changes in the locality which are capable of being observed ‘on the ground’ in the locality.’
However: ‘I should however emphasise that I do not accept counsel for the valuation officer’s submission that because a consideration is of a financial nature it cannot be considered as it exists at the date of the proposal because it is incapable of being converted into 1973 values. I would therefore regard it as perfectly appropriate in considering the quality of transport services as this could materially affect an assessment of the quality of the service. Likewise if the existence of a development zone affects the prosperity of an area in a manner which is manifest and can be observed, this should be taken into account. The features which demonstrate a change in prosperity in this way could be properly taken into account as part of the setting in which the valuation at 1973 values is to be made.’
Lord Woolf discussed what amounted to such physical factors: ‘new public sewers, the opening of a street market, no waiting restrictions on an adjacent highway or a change in the Heathrow flight path bringing aircraft directly overhead.’ As to the affect of localamenities: ‘ . . in relation to both amenities and facilities I do recognise that the effects of an area being designated as a development zone, as happens with a smokeless zone, can result in changes in the facilities and the amenities of the locality which can be taken into account.’
Sir George Waller discussed the language of the section dealing with local amenities: ‘In interpreting the section it is necessary to consider the matters which Parliament provided should be taken into consideration. Occupation would be part of the physical state and use would be associated with the physical state. Similarly transport services and other facilities in the locality, although not a physical part of the locality, would be associated physically with the locality. This would also apply to ‘other matters affecting the amenities of the locality’.’
Judges:
Woof LJ, Sir George Waller
Citations:
[1987] RA 1
Statutes:
Jurisdiction:
England and Wales
Cited by:
Appeal from – Clement (VO) v Addis Ltd HL 1988
The ratepayer complained that an enterprise zone set up near his property had depressed the value of his property which should have been reflected in a reduced rateable value. He appealed a decision that section 20 related only to physical changes . .
Cited – Chilton-Merryweather v Hunt and others CA 19-Sep-2008
The council tax payers sought to reduce the banding for his house saying that it was adversely affected in value by being located so close to the motorway as to be affected by noise.
Held: The House of Lords decision in Addis had been reversed . .
Lists of cited by and citing cases may be incomplete.
Rating
Updated: 05 May 2022; Ref: scu.276415