Wilson v Josephine Coll (Listing Officer)

This is an appeal under regulation 43 of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009. An appeal to this court under that provision lies on a point of law only. The decision under appeal is that of the Valuation Tribunal for England (VTE), dated 30 September 2010.

The appellant has appeared in person ably assisted by her husband, Mr Wilson. I am grateful both to him and to counsel for the respondent for their helpful submissions in this court.

The essential facts of this case, at least so far as material for present purposes, are not in dispute. The property concerned is a two bedroom semi-detached house dating from the 1930s. It has appeared in the valuation list, to which I will make reference, since its commencement in 1993 and has been valued at band B. That banding is not under challenge in this case if the property is to remain in the list at all.

The property has been vacant since June 2007 and is in a state of disrepair with no work having been carried out to it since it became vacant. So far as appears to be the case for present purposes, it was, for a period after it became unoccupied, designated as an exempt dwelling under what is known as class A of the Exempt Dwellings Order, which is something to which I will return. It is important to note at this juncture that such an exemption may only last for a maximum of 12 months.

The Listing Officer's primary statutory duty in the present context is imposed by section 22 of the Local Government Finance Act 1992, and is to compile and maintain a valuation list for each local billing authority area. By section 23 of the same Act that list must show, for each day for which it is in force, each dwelling which is situated in the billing authority's area and which of the valuation bands is applicable to that dwelling. A "dwelling" is defined for the purposes of Part 1 of the 1992 Act by section 3. It is any property which, by virtue of the definition of a hereditament in section 115(1) of the General Rate Act 1967, would have been a hereditament for the purposes of that Act if that Act remained in force. Secondly, it is not for the time being required to be shown in a non-domestic rating list. And thirdly, that it is not exempt from non-domestic rating.

It is unnecessary, for present purposes, to go to the underlying definition of hereditament in section 115 of the General Rate Act 1967. It is important, however, to recall an authority which has provided a definition of what is hereditament. That is the decision of the Court of Appeal in Post Office v Nottingham Council [1976] 1 WLR 624.

In the principal judgment, which was given by Browne LJ, there appear the following helpful passages. At page 635B:

The decision under appeal in this case was made by the Valuation Tribunal for England sitting at Maidstone. The hearing took place on 17 August 2010 and the decision was promulgated on 30 September 2010. For present purposes it is important to read the part of the tribunal's decision which is headed "Decision and Reasons" in full, at paragraphs 36 to 42:

For the appellant there was a simple and straightforward submission made both to the tribunal and to this court. It was to the effect, as recorded, for example, at paragraph 35 of the tribunal's decision, that although the property was capable of repair the question was: "At what price?" The appellant submitted that the appeal property was not a hereditament as it was not in reasonable repair.

For the appellant it was submitted that the concept of a hereditament continuing to exist necessarily imports a requirement in law that any repair that may be needed in order to remedy defects in it must be a repair which is economic to carry out. For the appellant it was eloquently submitted that the man on the Clapham omnibus, the reasonable person would surely not embark upon a programme of repairs if it would be uneconomic to do so and, in particular, if it would not enhance the underlying value of the property in a way such as to make the repairs economically worthwhile to undertake.

For the respondent Listing Officer it was submitted that the question of whether a property continues to be a hereditament, according to the relevant legal regime, does not depend on whether any repairs which may be needed can be economically carried out. It was submitted that a dwelling that is capable of repair remains a hereditament even if it would not necessarily be economic to carry out those repairs. In particular, it was drawn to my attention that there are two legislative provisions which would appear not to make sense, unless the existence of a hereditament is taken for granted.

The first of those legislative provisions is regulation 6(2)(e) of the Council Tax (Situation and Valuation of Dwellings) Regulations 1992, which I will abbreviate as "the Valuation Regulations". That provision requires that in conducting a valuation exercise for a relevant property certain assumptions are to be made, and by regulation 6(2)(e) one of those assumptions is "that the dwelling was in a state of reasonable repair."

For the respondent it was observed that this court has previously held that the presumptions in regulation 6 are irrebuttable: see R v East Sussex Valuation Tribunal, ex parte Silverstone [1996] RVR 203 at 205. That is a decision to which I will return.

The other legislative provision upon which the respondent relies, as providing a statutory indication that the legislator has proceeded on the assumption that a hereditament continues to exist, even if repairs to it are required which may not be economic to undertake, is Article 3 of the Council Tax (Exempt Dwellings) Order 1992. This sets out a number of classes which are exempt from liability to pay council tax for a limited period of time of 12 months. Class A, which is material to the present case, provides a follows:

In essence, therefore, the submission on behalf of the respondent is that those legislative provisions would simply make no sense if the underlying assumption was not implicit in them, namely that a hereditament continues to exist, even though repair to it may not be economic to undertake.

Nevertheless, the position does not stop there, according to the respondent's submissions. The respondent accepts, and indeed it appears that this was the way in which submissions were made to the tribunal, that there may come a point at which a property is so derelict as to be incapable of repair. The important distinction which the respondent seeks to draw is not between economic repair and uneconomic repair, but rather a distinction between repair, or at least a reasonable amount of repair, which is still repair, as distinct from a complete reconstruction or replacement of a building. The latter, submits the respondent, will mean that the original hereditament no longer continues to exist. The former, even if repairs which are uneconomic are required, will mean that the property is not derelict because it is capable of being rendered suitable for occupation for its purpose by some repair, even if in fact that is a repair which it would be uneconomic to undertake.

It is also important to emphasise that the respondent submitted, correctly in my view, that there is a crucial distinction in law between the valuation of a hereditament and the prior question of whether a hereditament exists. The respondent submitted that confusion has sometimes entered this area of law between those two legally distinct concepts. The respondent submitted, and I accept, that the key authorities which exist on this area of law to date are concerned with the question of valuation of a hereditament and not with the distinct question of whether a hereditament exists in the first place. I will turn to those two authorities now.

The first is Silverstone, to which I have already made brief reference. This was a decision by Carnwath J, as he then was. I should mention that the wrong procedure had been adopted in that case. It should not have been brought by way of Judicial Review as it was, but rather by way of a statutory appeal on a point of law. Nevertheless the judge decided not to rule out the case on that score and acknowledged that there was a residual jurisdiction available by way of Judicial Review, and he was satisfied that there had been genuine oversight and there had been no prejudice to other parties in that case.)

The case concerned two flats, which the applicant bought with a view to carrying out extensive repairs and converting into one unit. This appeared to be a fairly slow process, the work being done by the applicant himself. The applicant had in fact been living in the property, although he said it was vacant for about three months after he bought it. The property concerned was included in the initial valuation list as two separate dwellings, both of which were placed in band C, but in July 1993 the applicant made a proposal to alter the list on the basis that the dwellings should have been included in the valuation list as one entry.

For present purposes what is important is that the applicant in that case submitted that the dwelling did not, at the relevant date, comply with the statutory assumptions which are set out in Regulation 6, which I have already quoted from. Carnwath J at page 205 stated that the simple question before the court was one of law, namely whether the assumptions in that legislation are rebuttable. He concluded that they were not rebuttable. He said that an assumption is by definition a hypothesis which may be adopted whether or not it is in fact true. He noted that the making of such assumptions is a familiar concept in valuation law, for example in the Land Compensation Act 1961. He also was of the view that the whole purpose of such assumptions would be lost if it were open to individual owners, or indeed individual authorities, to rebut the assumptions by reference to evidence of individual cases. The statutory provisions, he concluded, were clear on this point, but he also derived some support for this conclusion from an earlier Scottish authority, Strathclyde Assessor v Rea, the Scotsman, 30 August 1995.

The other case, to which I will make reference, is

That case concerned various grounds of appeal, which included an assertion that the tribunal had wrongly interpreted the valuation evidence presented to it in arriving at its decision. In particular, it was alleged that the tribunal had found that the dwelling was repairable at reasonable expense when the unchallenged evidence of experts proved otherwise.

It is important to note that at paragraph 15 of her judgment, HHJ Kirkham said that it was not disputed in that case that the property was a hereditament. Furthermore, at paragraph 16 the learned judge noted that the applicant had not suggested that the property was incapable of beneficial occupation. Indeed, it had been for many years occupied beneficially by him.

The actual ratio of the case can be found at paragraph 17 where HHJ Kirkham said that:

At paragraph 25 of her judgment she returned to this theme and noted that in dealing with questions of whether the likely cost of repair were economic or not, the tribunal had in fact gone further than it needed to in order to determine the matters which had been put in issue.

Nevertheless, it is clear from the rest of the judgment, and the underlying tribunal decision in that case, that questions of evidence going to whether repairs were economic or not were addressed in that case. There is one particular part of the judgment which needs to be read with care in the future because, as was acknowledged in the exchange between counsel and the learned judge after the judgment was delivered, an error crept into a citation of a textbook which is set out at paragraph 15 of the judgment in Burke. At that passage it is suggested that the quotation which appears there was from the well-known textbook in this area of law, Ryde on Ratings. In fact, as I have been informed by the respondent, that was wrong.

The passage which is quoted there states as follows:

It is clear, as the respondent has submitted, in my view, that regulation 6(2), and therefore the passage in Askhart commenting upon it, should properly be regarded as going to the question of the valuation of a hereditament and not the distinct legal question of whether a hereditament exists, or continues to exist. Read in its proper context the passage is no doubt correct. However, this is an example, as the respondent submits, and I accept, of the risks of confusion entering this area of law, unless one keeps a careful distinction in mind between the existence, or continued existence, of a hereditament and the distinct legal question of the proper valuation of that hereditament, including what assumptions, indeed irrebuttable assumptions, must be made when conducting that valuation exercise.

In essence, I accept the submissions, advanced on behalf of the respondent, as to the correct approach which should be adopted as a matter of law in cases of this kind. However, I do not accept that the tribunal adopted that approach in the present case.

I must now go back to the details of the tribunal's reasoning at paragraphs 36 to 42 of its decision, which I have already quoted in full.

It is clear from the express terms of the tribunal's decision, for example at the beginning of paragraph 37, that the tribunal regarded the question before it as being a point of law and not turning upon the individual facts of a given case. It is also clear from paragraph 41 of its decision that the tribunal returned to what it identified as "the key issue" and gave that question what it regarded as being an answer as a matter of principle, in other words an answer in law which did not turn upon the individual facts of the case before it.

In paragraph 41 I quote againthat the Panel concluded that:

It seems to me that the tribunal fell into precisely the error of law which the respondent has stressed before me ought not to infect this area of law. They confused the two concepts which the respondent has been at pains to stress to me ought not to be confused, namely the concept of the existence, or continued existence, of a hereditament on the one hand, and the distinct question of the proper valuation of a hereditament on the other hand.

So much is plain, it seems to me, from the passage in paragraph 40 of its decision where the tribunal refers to the other decision of this court, to which it does make reference, namely Silverstone. As counsel for the respondent has correctly submitted before me, the Silverstone case does not go to the question of whether a hereditament exists or continues to exist. When Carnwath J said in Silverstone that certain assumptions are irrebuttable, he was referring to the assumptions which are to be made under regulation 6(2), and in particular paragraph (e), as to the state of reasonable repair. Those assumptions are all to be made for the purpose of an exercise of valuation. They are, on the respondent's own submissions before me, not assumptions which help to answer the question of whether there is, or continues to be, a hereditament in the first place.

Finally in the reasoning of the tribunal itself, it is troubling, in my view, that having referred to the statutory assumption at paragraph 39 it regarded that as being "so absolute". It clearly fell into error therefore, in my view, in regarding that statutory assumption as answering the question which was the question before it in this case. It is clear from the use of the word "because" at the beginning of paragraph 39 that the tribunal regarded that statutory assumption in regulation 6(2)(e) as being the answer to the question of law, which it had identified for itself in the present case.

Finally in this context I should make reference to the contrast in the regime for non-domestic rating, to which the tribunal itself made express reference at the end of paragraph 37 of its decision. The relevant legislation is to be found in the Local Government Finance Act 1988 in Schedule 6, which concerns the valuation of non-domestic rating properties.

At paragraph 2 of Schedule 6 it is provided that:

I accept the respondent's submission before me that that is another statutory indicator that, in the context of the council tax for domestic properties, regulation 6(2)(e) does not import any concept of what repairs a reasonable landlord would consider economic. The absence of such a phrase in contrast to the appearance of that phrase in the provision I have quoted from in Schedule 6, paragraph 2 to the 1988 Act, makes it plain, in my view, as the respondent has submitted, that no such qualification or implication was intended in the present context. However, what is important in considering the tribunal's reasoning in the present case is that all of that again goes only to the question of the valuation of a hereditament and the assumptions to be made for that purpose. It does not answer the question, as the tribunal appears to have thought that it did, of whether a hereditament exists or continues to exist.

In answering that question correctly the respondent submitted to me that what in fact should be asked is a question which is posed for Listing Officers to consider in a practice note to the Council Tax Manual, practice note number 4. The question is as follows:

I accept the respondent's submission as a general matter in that respect. I accept that as a general matter of law the crucial distinction for the purposes of deciding whether there is, or continues to be, a hereditament should focus upon whether a property is capable of being rendered suitable for occupation (in the present context occupation as a dwelling) by undertaking a reasonable amount of repair works. The distinction, which is correctly drawn by the respondent, in my view, is between a truly derelict property, which is incapable of being repaired to make it suitable for its intended purpose, and repair which would render it capable again of being occupied for the purposes for which it is intended.

The crucial distinction in that regard is not between repairs which would be economic to undertake or uneconomic to undertake. As I have already indicated, that submission, and my conclusion in accepting it, draws force from the fact that the concept of the reasonable landlord considering something to be uneconomic is simply absent from the present legal regime, whereas it is present in the legal regime which governs non-domestic rating.

However, for reasons I have already set out, none of that saves, in my view, the particular decision which is under appeal before me. That decision was, in my view, clearly tainted by errors of law which I have already mentioned.

The respondent submitted before me, correctly, that even if a tribunal's decision is in some respect erroneous in law, this court is not always bound to allow an appeal. It has wide discretionary powers conferred upon it by the relevant procedural rules, to which I will now turn.

Regulation 43 of the Procedure Rules, to which I made reference at the beginning of this judgment, provides in paragraph 1 that:

The respondent submitted before me that even if I were to conclude, as I have done, that the tribunal's decision fell into legal error, nevertheless the outcome in this particular case would have been inevitable on its facts and that I should dismiss the appeal or make an order of my own, such as the tribunal could have made, namely that the appeal be dismissed on its facts.

In essence, the respondent submitted that this was the right course to take because it was said the appellant accepted (see particularly paragraph 35 of the Tribunal's decision) that the property was capable of repair. What was in dispute was a different question of whether it is capable of being repaired economically, or whether that was not economically viable.

I have considered carefully these submissions. However, I have come to the view, at the end of the day, that I should not exercise my discretion except in the normal way. The normal course in administrative law proceedings would be for this court to set aside a decision of a lower body or tribunal which is erroneous in law, and to remit the case for redetermination in accordance with law. In my judgment the outcome is not necessarily inevitable, although it would not be right for me to comment further on the particular facts of this case as it will have to be redetermined by the Tribunal.

Justice requires, in my view, that the parties should again have the opportunity to present their cases in accordance with a correct understanding of the law, rather than an erroneous one. It also requires, in my view, that the tribunal should have the opportunity to focus upon the correct questions in law, rather than be distracted, as it appears to have been so far, in my view, by focusing on the wrong legal questions.

I have also borne in mind, as a subsidiary point in the exercise of my discretion, that this was regarded by the tribunal itself as being an important case which raised a question of law. I have already referred to that express point being made at the beginning of paragraph 37 of its decision. It is also important to note in this context that a number of other cases concerning Mrs Wilson, as I understand it, have been stayed by the tribunal pending the determination in this particular case. I do not know, and do not have before me, the facts of those other cases. This again, however, leads me to exercise my discretion in favour of remitting the case so that the tribunal can correctly determine the case again in accordance with this judgment and then consider what, if any, relevance that may have to other cases which have been stayed by it.

For the reasons I have given this appeal is allowed and the case will be remitted to the tribunal for redetermination in accordance with the law.

MR JUSTICE SINGH: Would you like to say anything, Mr Wilson?

MR WILSON: Thank you very much, Sir. This raises the question of costs.

MR JUSTICE SINGH: I have seen a schedule of costs from each side, but there is a question of principle, it seems to me, and I would certainly welcome any assistance counsel can give me from the respondent's point of view on that. Do you want to sit down for a moment?

MR WILSON: Surely, thank you.

MR JUSTICE SINGH: Can I just ask you, Miss Lean, if you have seen a schedule of costs that was submitted by the appellant in this case?

MISS LEAN: Yes, my Lord.

MR JUSTICE SINGH: It is for a very large amount, if I may say so. Apart from amounts, what do you say about the principle as to costs, because we are dealing here with a litigant in person? As far as I am aware, and I will be corrected if I am wrong, the indemnity principle applies to this case, as it does normally to costs issues. In other words, the successful litigant to a case can only claim those costs which have actually been incurred, so, for example, if you have had to go to a solicitor or a barrister then you can claim the cost of that legal service. But as far as I am aware you cannot just conjure up a figure and say, "That is my costs, even though I am not a lawyer".

MISS LEAN: No, my Lord, I believe the provision is in CPR 48.6 and provides that if a litigant in person wishes to claim for costs they have to be able to prove financial loss occasioned by bringing the proceedings, and proved by evidence. I have certainly not --

MR JUSTICE SINGH: One way of dealing with this might be to cut through this. The reason why the Schedule of Costs was produced, I think, for both sides is that it was envisaged that I might give judgment in less than a day, which I did not do. Normally this court does not make a summary assessment of costs itself if a case has lasted longer than a day, and normally what this court would do is decide the question of principle and then the quantum of costs. If it is in dispute, then it would have to be resolved by detailed assessment by a costs judge. Would you invite me to take that normal course here because it seems to me that these are matters which a cost judge is very well suited to resolve? If there are some costs properly claimed, and no doubt the travel costs are, then no doubt they will be agreed. If, however, something is claimed which your side does not accept is payable, then if you cannot resolve that by agreement, you will have to have that assessed by a costs judge.

MISS LEAN: If will briefly take instructions. (Instructions taken) My Lord, if I may answer that query in two parts: the first is on principle. Whilst obviously you have indicated that you are going to remit the case back to the tribunal and the appeal has succeeded, I would obviously note that you did not do so on the basis which was advanced by the applicants, the primary issue being whether or not the question was one of economic repair, and the respondent had succeeded on that issue and the applicant had not succeeded. So in terms of principle, I would submit that the respondents resist an award of costs to the applicant, because though they have succeeded it was not on the case they have advanced.

MR JUSTICE SINGH: Yes, but they have had to come to court and they have succeeded in the outcome. You could have conceded, even on Tuesday. One course would have been for Miss Ward to say that she accepted that the tribunal's reasoning was wrong in law, even on her own submissions.

MISS LEAN: Yes, my Lord.

MR JUSTICE SINGH: She did not do that.

MISS LEAN: No, my Lord. That was the submission made in principle.

MR JUSTICE SINGH: I understand the submission.

MISS LEAN: In respect of the approach suggested, my Lord, I am told that is the usual approach. However, unfortunately no information has been provided as to how that figure has been calculated, or where it has been produced from, but the rules are quite clear that unless the applicant has produced evidence not less than 24 hours before the hearing (evidence supporting any financial loss he or she claims to have suffered), then the hourly rate for a litigant in person is provided for in the CPR itself. In my submission it would be appropriate to assess the costs based on the litigant in person rate, which I am instructed is £18 an hour.

MR JUSTICE SINGH: Would that be 18 times £92.05?

MISS LEAN: We would not take issue on the £92.05.

MR JUSTICE SINGH: And the travel costs?

MISS LEAN: We would not take issue with the travel costs.

MR JUSTICE SINGH: Do you have a figure for me that this comes to?

MISS LEAN: Yes. That is £1,727.

MR JUSTICE SINGH: Is that the total including the travel costs?

MISS LEAN: That is the total. I have the document which has been produced by those instructing me on that basis.

MR JUSTICE SINGH: It would be £1,660 something for the hourly rate. Instead of the £12,000 it is £1,665. You accept that you are liable to pay costs in these figures. Have you shown these to Mr Wilson?

MISS LEAN: We have not.

MR JUSTICE SINGH: Can I ask those to be shown to Mr Wilson, please? (Same handed). Shall I hear Mr Wilson on that? Mr Wilson, do you want to address me on this? What is said is that in principle the other side are prepared to pay costs because you have succeeded on this appeal, but they do not accept the figure of £12,950 that you have claimed.

MR WILSON: If I may address you, your Honour?

MR JUSTICE SINGH: Yes.

MR WILSON: As I mentioned on Tuesday, I've never been to the High Court before, but the last time I had to appear in court is what's called a "multi-track" in the County Court where I succeeded. Again, the opposition counsel, if I can call them that, came up with exactly the same argument, that I should be restricted to £18 per hour because of some rule in the White Book, I think it's called.

MR JUSTICE SINGH: Yes, it is.

MR WILSON: But the circuit judge, the trial judge, actually said, "No, this isn't the case" and he referred to some piece of legislation where we can claim back our costs. He did send it off, Sir, for what's called a detailed assessment (I believe it's called), but basically it does seem so to me that - I appreciate this is a higher court from a County Court, but it does seem to me that if in a County Court I am allowed more than £18, then perhaps, Sir, that should apply here also. So I can't give you the authority, or anything, but I can tell you that's what happened in June.

MR JUSTICE SINGH: Thank you for that. What I am going to do --

MR WILSON: One last thing: we've had two trips, we had to come again today. It's another five hours on (inaudible) you know two, two and a half hours to get here and back. So if my friend here hasn't disagreed with the 92 and a half hours, I am hoping she will agree with 97 and a half hours.

MR JUSTICE SINGH: Let us just see.

MR WILSON: And my wife's point is total travel costs including parking, would be £133.

MR JUSTICE SINGH: Sit down for a moment, if you would. Can I just ask you if those behind you have done a calculation. If it is 97.5 times £18, what does that come to? It is another 90, is it not? It becomes £1,745, I think. Five times 18 is £90. That is the way I make it. I do not have the calculator.

MISS LEAN: I make it £1,755.

MR JUSTICE SINGH: It is interesting that those of us who were taught in the old-fashioned methods can still get there before a computer.

MISS LEAN: I have £1,755.

MR JUSTICE SINGH: What about travel costs being £133. Do you accept that?

MISS LEAN: We do not dispute that, my Lord.

MR JUSTICE SINGH: The total would therefore be £1,888. I have done it in the old-fashioned arithmetic on paper. What I am going to do is order the respondent to pay the appellant's costs in the sum of £1,888 to include your travel costs. I make it clear that the hourly rate, which I have allowed for this litigant in person, is £18 per hour, in accordance with the normal regime in Part 44. I am not persuaded, in the circumstances of this case, that even if I do have the power to award a larger figure I should do so in the exercise of my discretion.

Is there anything else?

MISS LEAN: My Lord, if I might, in terms of permission to appeal, ask for seven days for the application to be made in writing to you, so that those instructing me, who have been substantively involved, can consider their position and whether it is desirable to make an application.

MR JUSTICE SINGH: Presumably you will send that application to Mr Wilson and Mrs Wilson?

MISS LEAN: Yes.

MR JUSTICE SINGH: If necessary they should have seven days, it seems to me. There is no application for permission to appeal today, but they just want to have seven days, if they want to think about an appeal to the Court of Appeal.

MR WILSON: It is effectively not served when it goes back to the tribunal. Is that not effectively their opportunity to--

MR JUSTICE SINGH: No, because they may not be happy with my judgment.

MR WILSON: Surely not, sir.

MR JUSTICE SINGH: It is not for me to say, Mr Wilson. I have done my best in this case. What I will order in this case is that what should happen next is the respondent should have seven days from today's date, if so advised, to file a written application for permission to appeal to me. That does not mean that they will get it. It just means that they can apply. If that happens it must be served at the same time on Mr and Mrs Wilson. I direct that Mr and Mrs Wilson, if they wish to, can make any written response to that application to me within seven days after that. That will be 14 days from now. If all of that does happen, then I will make a decision on the papers without the need for any further hearing on whether there is to be an appeal or not to the Court of Appeal.

Mr Wilson, what I should emphasise to you is that even if I do not grant permission to appeal, if that eventuality occurs, then it is open to the other side to go to the Court of Appeal and ask for permission to appeal. I stress that I have not made any decisions about any of this. There may not be an application for me to consider, but there may be in due course, and I have to look at it on its merits. Is there anything else? If not can I thank you all very much for your kind assistance.