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The Upper Tribunal (Lands Chamber) has dismissed an appeal made by the ratepayer of a shop in the Touchwood shopping centre in Solihull, seeking a reduction in its rating assessment for the effect of the opening of the new Resorts World complex at the National Exhibition Centre, about six miles away. In its decision in Fabulous Collections Limited v Smith (VO) (2017 UKUT 0452 (LC) the Upper Tribunal considered evidence as to whether the opening of the 50,000 square metre Resorts World complex, in 2015, had affected rental values, and hence rateable values, in the Touchwood Shopping Centre in Solihull. The decision considers the types of evidence that may be needed in such cases.
A preliminary issue arose which was that, after the ratepayer had lodged its appeal, but before the Upper Tribunal came to hear the case, the Valuation Officer had split the rating assessment that was the subject of the appeal, between the ground floor shop and a first floor storage area. The Valuation Officer had re-linked the appeal made against the original single assessment to the new ground floor shop assessment. The ratepayer was content that the appeal be relinked in this way and the Tribunal was content to hear the matter on the basis of this re-linking, without giving a view as to whether the “material day” of the original appeal (the date by reference to which the circumstances of the appeal are to be assessed) should continue to apply to the relinked appeal.
The ratepayer contended that the effect of the opening of the new complex was to reduce the rental value of the appeal property by 10%. Initially the ratepayer sought to support this figure by reference to its trading performance before and after the opening date of the new scheme, but it became apparent that trading performance had been affected by other matters than the opening of the new scheme, particularly the loss of the right to sell a particular brand of goods at that time. In addition to this trading evidence the ratepayer also referred to the evidence of rents in the Touchwood shopping centre; changes in the occupation of units in Touchwood; and to retail studies undertaken before, and after, the opening of Resorts World.
The Tribunal found that no weight could be placed upon the ratepayers trading figures, because they were affected by the loss of the right to sell certain goods, and because no evidence of any other retailers’ trading performance was available to support the figures. The Tribunal also found the ratepayer’s reference to rents in Touchwood, in relation to rateable values there, to be unreliable because there was no evidence to show whether the rateable values were agreed and because of the long period of time between the dates of the rents and the valuation date for rating purposes. In this respect the Tribunal commented that a table of rents. showing specific changes in rental levels before and after the relevant date, might have been of more assistance.
The Valuation Officer submitted only limited evidence rebutting the ratepayer’s assertions. The Valuation Officer considered that only a single set of trading figures was unreliable, and that the evidence of rents was unclear. The Tribunal commented that it would have been assisted by an attempt by the Valuation Officer to seek definite conclusions from the available evidence, rather than simply seeking to rebut the ratepayer’s case. That said, it was clear to the Tribunal that, whilst some retail studies showed a possible impact from the opening of Resorts World, the absence of any support for this conclusion from either the evidence of rents or the evidence of a range of trading figures, meant that the ratepayer had not “achieved anything approaching the required level of evidence to show that there has been any effect of rental levels at Touchwood as a result of the opening of Resorts World”. As a result, the ratepayer’s appeal was dismissed.
The Tribunal was also critical of both parties’ expert witnesses for their failure to comply properly with the RICS Practice Statement “Surveyors acting as expert witnesses” (4th edition), and reminded all those acting as expert witnesses that the practice statement is an important document, and one to which the Tribunal expects full compliance.
The Tribunal’s decision shows the importance of seeking a range of evidence to show the effects of changes such as the opening of a new shopping centre. Where trading figures are used it is important to have a range of different trades represented, and for the figures not to be affected by extraneous external changes. Rental evidence, too, should be presented in a way so as to best judge the effect of the factors under consideration. Evidence of these types can then be supported by retail studies, footfall figures, vacancy rates and other matters so as to show a range of different sources of evidence pointing towards a similar conclusion.
