Daniels v Monmouth School

This is an appeal by the Listing Officer against a series of decisions of the East Wales Valuation Tribunal made on 13^th March 2009. It relates to orders of the Tribunal that various buildings forming part of Monmouth School should have their entries in the Council Tax Valuation List amended, which entries were made by the Listing Officer. The appeal is brought under Regulation 32 of the Council Tax (Alteration of Lists and Appeals) Regulations 1993, (Footnote: ¹) which allows for an appeal on a question of law only. The question of law here is whether the Valuation Tribunal erred in law in failing properly to apply regulation 7 of the Council Tax (Situation and Valuation of Dwellings) Regulations 1992. (Footnote: ²)

Regulation 7 (1) reads:-

Regulation (2) then defines the "relevant amount" as follows:-

The Listing Officer submits that the Valuation Tribunal, having found that Monmouth School was not in itself a single hereditament, could not thereafter if applying regulation 7 properly determine the domestic element based on an apportionment of the total value of the school. He submitted that the Valuation Tribunal should have considered the domestic and non-domestic parts of each individual hereditament rather than apportioning to them a part of the overall value of the school as a whole. There is no doubt that that is what the Valuation Tribunal did in fact do.

The factual background to the appeal is that Monmouth School owns and occupies a large number of individual premises in Monmouth. Some of the individual premises are partly domestic and partly non-domestic (such as boarding rooms and cottages).

The Listing Officer entered a number of individual premises in the 2005 Council Tax Valuation List, and valued them by valuing each of the individual premises and then apportioning those values between the domestic and non-domestic parts of each. The method he used can be seen from the summary of his case at page 6 of the Tribunal’s decision at page 32 in the bundle. The Listing Officer considered that the properties could clearly be seen as separate hereditaments. He referred to the case of Gilbert -v- Hickinbottom, [1956] 2 All ER 101. This case establishes (and I am reading from the "Held" passage in the headnote of the report) that:-

This indicates that the question whether there is one or more than one hereditament is a question of fact for the Tribunal.

In its decision, the Valuation Tribunal found that Monmouth school did not comprise a single hereditament. Now that is a decision taken by them on the facts, and there could be no appeal from that decision which is entirely on the facts.

At page 35 in the bundle (Footnote: ⁴) the Listing Officer summed up his approach. The school's appeal to the Valuation Tribunal against his entries in the Valuation List was based upon the contention, as an alternative to their main contention that the whole school comprised but a single hereditament, that the value of the domestic parts of these properties should be determined by apportioning the value of the whole school estate, which led to a lower value. Doubtless they were right and it did; but the question is whether, having held that the school was not a single hereditament, the tribunal was entitled to follow that approach. That they did follow this approach is clear from the decision. They say that they had to consider the 'relevant amount' – which is clearly correct - and went on to say that the value of the whole school needed to be considered because the value could only be ascertained as part of the overall value of the school.

It is of course tolerably clear at once that the Valuation Tribunal was doing the very thing that they were not allowed to do by regulation 7. What Mr Beattie, who was acting for the school, invited the Valuation Tribunal to do was something which was entirely inconsistent with their earlier decision that the school as a whole did not constitute a single hereditament.

As the Court of Appeal in Atkinson -v- Lord, [1997] RA 413, 419 - accepting the submission of Counsel for the Listing Officer - said, what the regime of the regulations was concerned to prevent was valuation on the basis of "lotting" of the hereditament. As submitted to the Court of Appeal and accepted by them:

“It is an established valuation experience that at times the sum of the valuation of the parts can exceed the value of the whole.”

Regulation 7 prevents valuation on this basis. It requires a valuation of the whole and apportionment of the relevant amount between the domestic and the non-domestic parts (an individual valuation is not necessary, merely a conclusion as to what range of valuations is appropriate). I accept the submission of Mr Morshead that that was the extent of protection to which the taxpayer was entitled. The Valuation Tribunal went further and took all the individual composite hereditaments and combined them with other parts of the school with which they were connected as a result of their being parts of the same business. I am satisfied that that was, effectively, treating them as one composite hereditaments, the school, rather than applying regulation 7 to them individually.

I am satisfied that the Listing Officer's approach was correct. The Valuation Tribunal was seduced by the school's representative into following a wrong approach.

I have considered the letter from the representatives of the school of the 1^st July 2009. The matters in that letter do not go to the fundamental point argued before me although they may be relevant on a reconsideration by the Valuation Tribunal.

I therefore quash the Valuation Tribunal's decision, and remit the matter to them to re-determine the appeals on a proper basis.