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The Upper Tribunal (Lands Chamber) has determined that the rating assessment of a property should be increased above the figure determined by the Valuation Tribunal for England on an appeal made by the ratepayer seeking a reduction in the assessment. The decision in Trevor Sorbie v Dunlevey (VO) (2016) UKUT 0167 (LC) concerned a hair salon in Covent Garden in London.
The ratepayer had originally appealed against the assessment of Rateable Value £130,000 appearing in the 2010 Rating List. That appeal was heard by the Valuation Tribunal for England which determined that the assessment should be reduced to RV £108,000. The ratepayer appealed further to the Upper Tribunal (Lands Chamber) contending that the assessment should be reduced to RV £71,000. The ratepayer contended that the property should be valued on an overall basis at £250 per square metre, rather than by zoning from the frontage, and that an end allowance of 15% should be applied to reflect the disability of raised floors and steps up. The ratepayer argued that the rent agreed for the appeal property in 2008, which was on a stepped basis rising from £185,000 per annum to £207,500 per annum, was not reliable evidence of value for rating purposes because the rent under the lease was based on a restaurant use, rather than the actual use.
The Valuation Officer originally entered a Statement of Case seeking a value of RV £108,000 as determined by the Valuation Tribunal for England. However, at the hearing in the Upper Tribunal the Valuation Officer contended that the assessment should be RV £130,000, the figure originally entered in the 2010 Rating List. The valuation first put forward by the Valuation Officer was on the basis of an office use, but a later valuation introduced by the Valuation Officer, which assumed similar relativities as those used by the ratepayer, adopted £394 per square metre, to arrive at the same figure. The Valuation Officer considered that it was not appropriate to make any end adjustment for steps and raised floors because the overall basis of valuation already reflected these matters. The Valuation Officer considered that the rent being paid for the property was relevant evidence of value and that the ratepayer had produced no evidence to show that there was a difference between restaurant values and values for retail properties.
The Tribunal first considered the rent agreed for the appeal property and concluded that this was a good guide to its true open market value and should not be disregarded. The Tribunal placed more weight on the other comparables relied upon by the Valuation Officer than on those relied upon by the ratepayer. The Tribunal considered that the steps up to the property were indeed a disability that warranted an end allowance of 15%, but that the starting point for application of such an allowance should be a much higher figure of £500 per square metre. On this basis the Tribunal determined that the correct assessment for the appeal property should be RV £140,000.
The Valuation Officer had not made any appeal against the decision of the VTE and had initially sought a figure of RV £108,000 in his statement of case. However, at the hearing, the Valuation Officer contended for a value of RV £130,000 and had given the appellant notice of this change of position by email, albeit only a week before the hearing. The Tribunal noted that its powers allow it to make any order that the VTE could have made. This included determining that the original assessment of RV £130,000 was correct. On that basis the ratepayer’s appeal was dismissed and the Tribunal ordered that the original assessment of RV £130,000 should be reinstated into the rating list.
The valuation points in this case are relatively straightforward and confirm that, where there is a rent passing on the appeal property, the Tribunal is likely to have regard to that rent. But the procedural points are of some interest. Despite the fact that the Valuation Officer had made no appeal against the VTE decision, and despite the Valuation Officer’s original statement of case seeking confirmation of the figure determined by the VTE, the Upper Tribunal was able to determine that the original assessment should be reinstated because its powers allow it to make any order that the VTE could have made.
The lesson for ratepayers who have had some success at the first-tier Tribunal is to bear in mind that a further appeal, because it will be a de novo hearing, does carry risks as well as potential rewards. The case also raises a question as to the significance of statements of case where a party’s contentions can, apparently, be altered so significantly and so late in the day. Because the case was heard under the Tribunal’s simplified procedure there was no costs regime applicable, and it would normally be this that would ensure that parties do not change their contentions late in the day. Litigants should be entitled to rely upon the opposing party maintaining a consistent position.
