The court considered correct approach to determination of the rateable value of an office building, in circumstances where the evidence showed at the relevant time a general demand in the area for comparable office buildings, but no actual tenant willing to pay a positive price for the building itself.
Held: (Briggs, Black LL dissenting) The rating officer’s appeal succeeded and the valuation was restored.
The Court endorsed the distinction between a property which is unoccupied merely because of a surplus between supply and demand in the market, and a property which has ‘reached the end of its economic life’.
Whether the building is occupied or unoccupied, or an actual tenant has been identified, at the relevant date is not critical. Even in a ‘saturated’ market the rating hypothesis assumes a willing tenant, and by implication one who is sufficiently interested to enter negotiations to agree a rent on the statutory basis. There is no reason why, in the absence of other material evidence, the level of that rent should not be assessed by reference to ‘general demand’ derived from ‘occupation of other office properties with similar characteristics’
Judges:
Lord Reed, Deputy President, Lord Carnwath, Lady Black, Lord Lloyd-Jones, Lord Briggs
Citations:
[2019] UKSC 23, [2019] 4 All ER 219, [2019] 1 WLR 3262, [2019] RA 315, UKSC 2018/0031
Links:
Bailii, Bailii Summary, SC, SC Summary, SC Summary Video, SC ’19 Feb 21 am Video, SC ’19 Feb 21 pm Video
Statutes:
Rating Lists (Valuation Date) (England) Order 2008, Finance Act 1988
Jurisdiction:
England and Wales
Citing:
At UTLC – Hewitt (VO) v Telereal Trillium UTLC 16-Jun-2016
Entry of nil valuation on list
UTLC RATING – Valuation – non- domestic hereditament – Local Government Finance Act 1988 schedule 6 – appeal to Upper Tribunal raising a point of law upon agreed facts – agreement that had the subject office . .
At CA – Telereal Trillium v Hewitt (Valuation Officer) CA 19-Jan-2018
The land owner appealed from a finding that the offices which it could not let for lack of commercial demand had a rating list valuation of pounds 370,000.
Held: The valuation was set aside and replaced with a value reflecting the market value . .
Cited – Smith v The Churchwardens and Overseers of the Poor of the Parish of Birmingham QBD 22-Nov-1888
The appellant was assessed to the poor-rate as owner of a small house let by the week to artisans, the landlord paying all outgoings. On appeal against the rate to quarter sessions the appellant claimed that in arriving at the gross estimated rental . .
Cited – Robinson Bros (Brewers) Ltd v Houghton and Chester-le-Street Assessment Committee CA 1937
Scott LJ said: ‘The rent to be ascertained is the figure at which the hypothetical landlord and tenant would, in the opinion of the valuer or the tribunal, come to terms as a result of bargaining for that hereditament, in the light of competition or . .
Approved – London County Council v Erith (Churchwardens and Overseers of Parish Of) and similar HL 8-Sep-1893
The London County Council were owners of land and premises consisting of a pumping-station and works, which they occupied and used
as a necessary part of the metropolitan sewage system and to enable them to perform statutory duties. So long as . .
Cited – Hoare and Another v National Trust CA 13-Oct-1998
The rating hypothesis must be interpreted to allow for the actual policies of the tenant. Where the tenant would not overbid despite the finding that properties of this type could not be managed to produce a profit. Nil rating was appropriate. Peter . .
Cited – Jones And Others v The Mersey Docks And Harbour Board HL 1865
. .
Cited – Regina v School Board of London CA 23-May-1886
In assessing to the poor-rate schools occupied by a School Board, which can make no profit in a commercial sense as tenant of the schools, the School Board itself ought to be considered as a possible tenant, and the gross and rateable values . .
Cited – Mersey Docks and Harbour Board v Birkenhead Assessment Committee HL 25-Apr-1901
In estimating for the purposes of a poor-rate assessment the rent at which premises may be reasonably expected to let, the circumstances of the actual occupation are matters to be considered, including the receipts and expenses of the business . .
Cited – Ladies Hoisery and Underwear Ltd v West Middlesex Assessment Committee 1932
An important principle of the law of rating is that ‘each hereditament should be independently assessed’: ‘The appellants here, however, say that besides the principle of independent valuation, there is another vital principle: that as between . .
Cited – Gray v Inland Revenue Commissioners CA 24-Feb-1994
Partnership interests in a tenanted freehold estate can be valued together. The court considered the ‘statutory hypothetical sale’ when valuing property for Inheritance Tax purposes: ‘The property must be assumed to have been capable of sale in the . .
Cited – Lambeth London Borough v English Property Corpn Ltd and Shepherd (Valuation Officer) LT 1980
The Tribunal was concerned with the annual value for rating of a warehouse (Bridge House) which was purpose built in 1933 with seven storeys which was unoccupied at the relevant date. The ratepayers were of the view that at the relevant date the . .
Cited – Tomlinson v Plymouth Argyle Football Co Ltd CA 1960
The Court considered the rateable value of the respondent’s football ground, for which the Football Club was the sole potential tenant. Henderson LJ cited Pearce LJ’s warning against assuming hypothetical tenants for the hereditament ‘if there is in . .
Cited – Dawkins (Valuation Officer) v Ash Brothers and Heaton HL 1969
The House considered the statutory principle of valuation for rating purposes: ‘But one excludes human realities to a limited and necessary extent, since it is only the human realities that give any value at all to hereditaments. They are excluded . .
Cited – Shiel (Valuation Officer) v Borg-Warner Ltd LT 1985
A large factory was no longer required by the original occupiers and was empty because an alternative occupier had yet to be found. The valuation court had reduced the assessment of rateable value to pounds 50,000. The Valuation Officer contended . .
Cited – Newbigin (Valuation Officer) v SJ and J Monk (A Firm) SC 1-Mar-2017
The court was asked: ‘Does a commercial building which is in the course of redevelopment have to be valued for the purposes of rating as if it were still a useable office? ‘
Held: Appeal from decision of CA granted. On the facts found by the . .
Lists of cited by and citing cases may be incomplete.
Rating
Updated: 06 February 2022; Ref: scu.637000