SIMMONDS V HEXTER AND OTHERS (1996)
FARMHOUSES - EACH A PART OF A COMPOSITE HEREDITAMENT - METHOD OF VALUATION OF DOMESTIC PART OF WHOLE
NOTE: This case proceeded, on a question of law, from the valuation tribunal to the High Court (as 'Atkinson and Others v Cumbria Valuation Tribunal (1996]'] and then, as a further appeal, to the Court of Appeal. The judgments of the High Court and the Court of Appeal are summarised below.
The point of law for decision by the court in respect of these appeals turned on the construction of regulation 7 of the Council Tax (Situation and Valuation of Dwellings) Regulations 1992 [see above]. The issue was whether, in valuing a dwelling which formed part of a composite hereditament, the whole of that hereditament fell to be valued so that the value of the domestic part could then be arrived at by deducting the value of the non-domestic part.
Each of the appeal dwellings was a farmhouse and a part of a composite hereditament consisting of agricultural land and buildings. It was accepted by the listing officer that in none of these cases was a valuation made of the composite hereditament before the valuation band for the dwelling was determined, though he argued that the procedure he had adopted was nonetheless in compliance with regulation 7.
It was contended for the appellants that there could be no valuation of the domestic 'portion' of a composite hereditament (as referred to in regulation 7) without there having first been a valuation of the whole, They said that there must be deducted from the value of the whole "the value of all it comprises save for that part which represents the value of the domestic use of the dwelling".
In the High Court, Jowitt J cited examples where great difficulty would be encountered if the appellants' view of the matter were to be upheld. He referred to the situation of a caretaker's flat in a large industrial complex, and a farm worker's cottage on a very large farm, and said that, if the appellants were correct in their belief, a very substantial exercise would have to be undertaken in some cases just to arrive at the value of the dwelling concerned, He considered th at he was entitled to conclude that the intention of the regulation was to "provide a practical and not unduly cumbersome or onerous way of isolating from a composite hereditament the dwelling element and placing a value on if',
It was submitted for the listing officer that the regulation provided a formula for valuation but did not lay down a method, and that the regulation did not impose a mandatory requirement that the whole should be valued as part of the exercise. As to the question of why the regulation should refer to the composite hereditament at all if no obligation to value it was imposed, counsel for the listing officer suggested that this was to remind valuers that they had to take into account, in assessing the value of the domestic part, that it is part of a composite hereditament, and that it is not to be valued as though it were a separate hereditament.
Jowitt J perceived the underlying complaint of the appellants to be that the listing officer had produced valuation bandings which approached too closely to the market value of dwellings assessed as separate domestic hereditaments, and which were higher than would have been the case had they been treated as parts of a whole. The listing officer asserted, however, that the nature of the dwellings as parts of composite hereditaments was reflected by way of adjustments to the preliminary assumptions that had been made as to which capital value price bracket they would fall into.
Jowitt J said that he was persuaded that the listing officer's approach was a tenable view of the method of valuation envisaged by regulation 7, and he concluded that the regulation was not to be construed as meaning that a valuation of the domestic element of a composite hereditament cannot lawfully be made unless there has also been a valuation of the composite hereditament.
The appeals were dismissed.
The taxpayers appealed to the Court of Appeal against the decisions of the High Court, and Schiemann LJ there set out the method of valuation that had been used by the valuer, and which had been endorsed by both the valuation tribunal and the High Court.
It was said that the valuer determined the amount the various farmhouses might reasonably have been expected to rea lise, making the appropriate valuation assumptions, if they had been sold as separate lots in the open market by a willing vendor on the relevant date (1 st April 1991 ). The valuer had then established that such farms sold for between £300,000 and £500,000 and that they were sold for 10% more when sold in several lots than when they were sold as one lot. A deduction of 10% was consequently made from the figures for the farmhouses in order to establish the value for the purposes of regulation 7.
Counsel for the appellants submitted that regulation 7[1] required the determination of the portion of the relevant amount for the composite hereditament which could reasonably be attributed to the domestic use of the dwelling. In order to establish that portion, he said, it was firstly necessary to establish the relevant amount of the whole, and this had not been done.
Counsel for the listing officer accepted that the 'relevant amount' of the whole was never determined, but he advanced the arguments that it was not necessary to do so in every case and that, in any event, the failure to do so here was of no consequence to the final banding. He said that regard was had to the value of each of the hereditaments as a whole, in that it was judged that each would have sold for an amount in the range £300,000 to £500,000.
Schiemann LJ said that, in his judgment, the valuer was required always to have regard to the relevant amount of the composite hereditament, and a failure to consider it would amount to an error in law. The valuer was not, however, required always to actually determine that amount. He saw no legal error in the method of valuation, and he concluded that no reason had been advanced for suggesting that the technique employed by the valuer was "forbidden by the legislator, was one which failed to achieve the legislator's objective or resulted in any unfair treatment of the taxpayer".
The appeals were dismissed.
SINGLE PROPERTY INCLUDING ANNEXE - SEPARATE LIVING ACCOMMODATION - SELF CONTAINED UNIT - ONE DWELLING OR TWO
Four cases were dealt with together by the High Court on the question of whether an annex to a property fell to be treated as a separate dwelling for the purposes of council tax. The appeals turned on the construction of the term "self contained unit" and the issue of what considerations were material to a determination of that definition in its application to the facts.
It was the decision of the valuation tribunal in each instance that the annex should be treated with the principal dwelling as one dwelling, and therefore should not be liable to separate council tax assessment. The High Court, however, allowed the appeals of the listing officers concerned and remitted th e cases to the tribunals for re-hearing.
The cases were all concerned with accommodation of the type which is commonly called "granny flats", and the Listing officers concerned had determined that each of the four flats was a self contained unit. Consequently, and in accordance with article 3 of the Order, these fell to be treated as comprising dwellings distinct from the other accommodation contained in the property.
The reasons provided by the tribunals as justification for their contrary view that the annexes were not separate dwellings were, in each case, found to disclose errors of law in the decision-making process. The High Court, in quashing these decisions, found
[a] in the first case, that any use of the annex in breach of the terms on which planning consent was given could not, of itself, be determinative of the question of whether it fell to be treated as a separate unit of living accommodation;
[b] in the second case, that to take account of the level of communal living was to introduce a consideration which was not relevant to the question of whether the annex was constructed or adapted for use as a separate dwelling;
in the third and fourth cases, that a view that the annex could not be sold separately on the open market could not assist in deciding whether it fell to be treated as self contained, and that it was wrong to treat practicability of sale as a separate factor.
[c] NOTE 2: Subsequent to the determination of this case, a new class of 'exempt dwelling' was created [see the Council Tax [Exempt Dwellings] Order 1992, 51 1992/558, as amended by the Council Tax (Chargeable Dwellings, Exempt Dwellings and Discount Disregards] Amendment Order 1997, 511997/656] to deal with the situation where a dwelling forms part of a single property including at least one other dwelling and is the sole or main residence of a dependent relative of a person who is resident in that other dwelling. The Batty/Burfoot case was, of course, only concerned with the actions of the listing officer in concluding that an annexe was a separate dwelling from the other dwelling included in the property, but the existence of this new class of exemption suggests that cases of this sort may only arise in future where the person living in the annexe is not a dependent relative.
BUILDING CONTAINING TEN FLATS WITH COMMUNAL FACILITIES - WHETHER FLATS SELF-CONTAINED UNITS AND THEREFORE SEPARATE DWELLINGS WHETHER CONSTRUCTED FOR USE AS SEPARATE LIVING ACCOMMODATION DEGREE OF CONTROL, AND CRITERIA FOR RESIDENCY, IRRELEVANT CONSIDERATIONS
A building owned by the YMCA, and known as 'Pinder House', contained ten flats and certain communal facilities, and was operated in connection with a scheme providing accommodation, education and training for homeless young people. Each flat had its own individual door lock and its own kitchen and shower/toilet facilities, and the communal accommodation in the building comprised two meeting rooms, a kitchen, a laundry, a toilet for disabled people, a bicycle store and a refuse room. There was also a management office, a staff bedroom and two storerooms.
The building was constructed in 1995, and the office and staff bedroom were assessed for non-domestic rates, but the flats were shown in the council tax valuation list, from the outset, as ten separate dwellings, each with a valuation band 'A'. The ratepayers made a proposal in 1998 to delete these separate entries and to create a single entry in the list, but the listing officer did not agree with the proposal and the matter proceeded as an appeal to the valuation tribunal.
The listing officer contended before the tribunal that each flat would have been a separate hereditament for the purposes of the General Rate Act 1967 and that each was therefore, in accordance with section 3 (2] of the Local Government Act 1992, a dwelling for the purposes of council tax. Further, he said, each flat was a part of a building that had been constructed for use as separate living accommodation, as described in Article 2 of the Council Tax (Chargeable Dwellings] Order 1992 Order [see above].
The valuation tribunal agreed with the taxpayers that there should be a single entry in the council tax valuation list, with a valuation band 'E'. The tribunal's reason for reaching this conclusion was that the flats were considered not to constitute separate dwellings or separate self contained units, bearing in mind, it was said, "the limited facilities enjoyed by each unit, the communal areas within Pinder House and the fact that Pinder House is controlled by one body with strict rules, including the criteria applied for residency".
The listing officer appealed against the decision of the valuation tribunal and, in the High Court, it was contended on his behalf that the evidence clearly indicated that it was not open to the tribunal reasonably to conclude, on the facts, that the flats had not been constructed for use as separate living accommodation. Counsel said that the tribunal had erred in focusing not simply upon the question of construction but in also bringing in an irrelevant consideration as to the manner in which the flats were used.
Counsel for the YMCA submitted that the limited facilities enjoyed by each unit, and the fact that there were communal areas within the building, were relevant considerations in deciding whether or not parts of it had been constructed for use as separate living accommodation. He conceded, however, that the further point relied upon by the tribunal, that the building was controlled by one body with strict rules which included criteria in relation to residency, was a factor that was difficult to relate to the issue of the construction of flats, but he argued t hat it was appropriate to consider the extent to which those residing in the building lived as a community.
Sullivan J said that, when looking at Articles 2 and 3 of the 1992 Order, one had to focus not upon the use actually made of the building or its parts, but upon whether they had been constructed for use as separate living accommodation such that they were self contained units. He agreed with the listing officer's view that whether the building was controlled by one body, and whether that body had criteria for residency, had nothing to do with whether the flats had been constructed for use as separate living accommodation.
Sullivan J went on to say that he could accept that it would often be a relevant consideration in cases such as these to consider the extent of the communal facilities provided, and he referred to student hostel accommodation, where all that may be available in a student's unit is a bedroom and all the other facilities are provided communally, as being at "one end of the spectrum". On the facts in the present case, however, he found it quite impossible to conclude that these flats had not been constructed for use as separate living accommodation, and he determined that the valuation tribunal had come to a conclusion to which no reasonable tribunal could come.
It was held that the tribunal had erred in law, and the listing officer's appeal was allowed.
BEACH HUTS ON SANDBANK - DWELLINGS FOR COUNCIL TAX - TRIBUNAL DELETED FROM VALUATION LIST - THE HEREDITAMENT - USE FOR THE PURPOSES OF LIVING ACCOMMODATION
The listing officer included 340 beach huts in the council tax valuation list as separate dwellings, and the borough council appealed to the valuation tribunal against that decision. The valuation tribunal accepted the view of the council that the huts were not "dwellings", and the 340 entries were deleted from the list.
The listing officer appealed, and the High Court first considered the meaning of "hereditament", as applied from the General Rate Act 1967, in relation to the beach huts. It was established that each was in the sole occupation of the licence holder, who held a licence from the borough council, and that each stood on its own particular plot of sand. These facts, it was said, pointed to a conclusion that either the plot of sand or the plot with the hut upon it comprised the hereditament.
The tribunal had concluded that the huts were "movable dwellings" and, on that basis, found that it was not the huts, but the sandbank on which all of them stood, that was the hereditament. This contention, supported as a secondary issue by the borough council, was rejected by the High Court as being wrong in law.
In order to determine whether the hereditament was a dwelling, it was necessary to deal with the other requirements of section 3(2) of the 1992 Act, and it was accepted, in this context, that paragraph Ie) [that the property "is not for the time being exempt from local non-domestic rating -"] did not, in any event, apply.
Paragraph (b) of section 3(2) of the 1992 Act left the question of whether the hereditament should be shown in a local or central non-domestic rating list, and this led to consideration of section 66(1) of the 1988 Act and to the issue of whether the hereditament was used wholly for the purposes of living accommodation.
Jowitt J pointed to the fact that the definition of a domestic property does not require that a hereditament is used for all the purposes which might be said to be the purposes of "living accommodation". Although some of the beach huts contained bunk beds, it did not follow that, in order to be considered as being used for such accommodation, a property had to be slept in.
The beach huts were found to be individual "dwellings", and the appeal of the listing officer was allowed, The High Court ordered that the inclusion of the huts in the valuation list be reinstated.
HOUSE AND FLAT IN ONE BUILDING - ACCESS TO FLAT THROUGH HOUSE CONSTRUCTED OR ADAPTED FOR USE AS SEPARATE LIVING ACCOMMODATION - SELF CONTAINED UNITS
This case concerned a three-storey building comprising accommodation on the ground and first floors, which was occupied by the owner, and further accommodation on the first and second floors, which was occupied by tenants. The ground and first floor unit was, throughout the case, referred to as the 'house', and the first and second floor unit was referred to as the 'flat'. Access to the entrance to the flat was by way of the front door to the house, and then through the hall, staircase and landing of the house.
The appeals to the High Court arose from two decisions of the valuation tribunal, one in respect of the house and the other in respect of the flat, to the effect that the building comprised two separate dwellings for the purpose of council tax. These decisions were based upon the findings of the tribunal that each was a 'self contained unit', as provided for in the Council Tax [Chargeable Dwellings) Order 1992
The appellant, the owner of the building, contended that there should only be one entry in the valuation list to cover both the house and the flat. There was no disagreement that the whole building satisfied the definition of a 'single property' set out in article 2 of the Council Tax [Chargeable Dwellings) Order 1992, and the only issue brought before the valuation tribunal and, ultimately, the High Court, was whether that single property fell to be regarded as more than one dwelling in accordance with article 3 of the Order.
The valuation tribunal's reasons for its decision in relation to the flat, as considered by the High Court, included a finding that the flat contained all the usual features of a self contained unit, including a lockable door, and that the need to gain entry via the house did not prevent it from being self contained. The tribunal also found support for this view in the fact that the flat was let.
)As to the decision in relation to the house, the tribunal accepted that t he right of the tenants to pass through the hall, stairs and landing of the house would be inconvenient to the owner, but it was not felt that this factor prevented the house from being a self contained unit. The house also contained all the usual features that one would associate with a self contained unit, and it had a front door which would prevent access to any persons that the appellant did not wish to enter.
Before the High Court, counsel for the appellant contended that neither the flat nor the house could be regarded as being 'separate living accommodation', as would be required to satisfy the definition of a 'self contained unit' in article 3 of the Order, in that, as regards the flat, there was no separate access to it and, in relation to the house, persons seeking access to the flat had to pass through the living accommodation of the house. He asserted that one cannot have 'separate living accommodation' for the purpose of the Order unless there is either an independent access to that accommodation or access from common parts that does not involve passing through the living accommodation of another unit.
Counsel for the listing officer submitted, in response, that there was no reason to read the Order as requiring separate access without passing through the accommodation of another unit in order to arrive at a conclusion that there is self contained accommodation. That, he said, was not a decisive or conclusive consideration, and he stressed that the question of access did not form part of any statutory definition on the notion of 'separateness'.
Sir Christopher Bellamy, sitting as a Deputy High Court Judge, observed that the flat contained cooking and bathing facilities and sleeping and living areas, and that it had a lockable door. Those facts, he said, gave rise to a conclusion that the flat was to be regarded as separate living accommodation or, more accurately, to a situation where part of the building has been constructed or adapted for use as separate living accommodation. He further considered that the tribunal had not fallen into error in taking into account that the flat had been let to tenants, notwithstanding the need to focus on the question of whether the property had been constructed or adapted for use as separate living accommodation.
Sir Christopher further said that he was not persuaded that the fact that one had to pass through the house in order to access the flat deprived the flat of its character as a separate self contained unit, and he found that the considerations to be taken into account were those identified by the tribunal. He accepted the listing officer's submission that the question of separate access, whilst being a highly material factor, was not an essential condition of 'separateness' for the purposes of the construction of the Order.
As to the house, Sir Christopher said that it followed that if the flat were to be separate from the house then the house must be separate from the flat. He gave consideration to the question of whether the house ceased to be 'separate' because the appellant had granted the tenants of the flat a licence to pass through her hall, stairs and landing, and he agreed with the view of the tribunal that this fact did not, of itself, undermine the conclusion that the house, also, fell to be treated as a self contained unit.
The house and the flat were each held to be separate living accommodation, and therefore self-contained units, for the purpose of the Order, and the appeals were dismissed.
FLOATING HOME - HEREDITAMENT - A BOAT OR A CHATTEL - DEGREE OF PERMANENCE - ARGUMENT NOT RAISED BEFORE VALUATION TRIBUNAL
The premises concerned in this appeal were described by the appellant as a floating home. It comprised a floating structure moored to an island in a waterway, and it was acknowledged as being the place where he lived.
The appellant argued before the valuation tribunal that his home did not comprise a boat because it had no means of propulsion by oars, pedals, sailor motor, and he further contended that it was not liable to council tax because there was no specific mention in the legislation of structures of this kind.
The matter proceeded to the High Court by way of further appeal, and there it was determined that the only question to be decided was whether the subject property fell within the definition of "hereditament" in section 115(1] of the General Rate Act 1967.
The appellant said that the property was a chattel and was not, therefore, real property. Buxton J concluded, however, that "the mere fact that a structure can be described on one view as a chattel and not real property is not in any way conclusive of whether it is a hereditament". He went on to say that the legislation clearly envisaged that boats could be hereditaments and that this structure must fall under the same rule.
It was further stated by counsel for the appellant that the previous authority which section 115(1] of the 1967 Act applied required a chattel, before it could form part of a rateable hereditament, to be placed on land with a degree of permanence sufficient for it to be regarded as being in one occupation with the land. This degree of permanence was alleged not to be present in this case.
Buxton J said that he was not prepared to rule on that point, as this was a question of fact which had not been raised in evidence before the valuation tribunal, and the High Court had, in consequence, no power to consider the matter on appeal. He did say, however, that it was far from clear that the necessary degree of permanence was not present.
The tribunal was found to be right in its decision and on the points of law that were argued before it, and the appeal was accordingly dismissed.
HOUSEBOAT - VALUATION BAND - HEREDITAMENT - CHATTEL - LAND
This appeal concerned a houseboat moored to a plot of land on a river bank. The listing officer considered that the mooring, together with the boat, comprised a dwelling, and he accordingly entered it in the valuation list with a valuation band "E".
The occupier of the boat made a proposal objecting to this entry, and he sought a reduction of the valuation band to "C" on grounds related to the last sale price of the property and the sale price of similar properties.
The listing officer did not accede to the occupier's proposal, and the matter came before the valuation tribunal as an appeal. The appellant, at this stage, introduced the contention that a boat was not a hereditament within the terms of the General Rate Act 1967, and he further argued that neither was it a dwelling for the purposes of council tax liability under the Local Government Finance Act 1992.
The tribunal determined that the property had been properly included in the valuation list as a dwelling, and that the valuation band was correctly set as "E".
The matter proceeded to the High Court as a further appeal, and the appellant sought from that court a declaration that the boat was a chattel and that the plot of land to which it was moored was not a dwelling but was, in fact, non-domestic.
The point was submitted for the listing officer that the appeal from the tribunal was made after the appropriate time limit of 28 days had elapsed, and that it was, thus, out-of-time. The High Court considered this to be a valid point. given the circumstances of the appellant's actions, but, as a concession, it was decided that the appeal would proceed and that the substance of the case would be dealt with.
The High Court was further acquainted with the fact that the appellant did not make his case regarding the property not being a dwelling in his application to the valuation tribunal. His assertion that this was only because of lack of space on the form was found to be an inadequate answer, but Buxton J said that he was not prepared to "shut him out" on that basis.
Buxton J concluded that, although the boat might be regarded separately as a chattel, it was clear that a chattel enjoyed with a unit of land in such a degree of permanence so as to form a single unit of occupation constituted a hereditament together with that land. He went on to say he was quite satisfied that, on the true construction of the council tax provisions, "the mooring, together wit h the boat moored at it, was properly regarded as a hereditament for the purposes of charge of council tax; and that it was, for those purposes, not a property which should have been included in a non-domestic rating list".
The appeal was dismissed, as was the taxpayer's further appeal to the Court of Appeal.
MAISONETTE OVER SHOP - COMPOSITE HEREDITAMENT - DWELLING - BIAS TRIBUNAL CHAIRED BY MEMBER OF COUNTY COUNCIL
A maisonette comprising two floors above a shop was held to be a composite hereditament, and to be properly entered in the council tax valuation list, notwithstanding the taxpayer's contentions that it was not self-contained and that the only access to it was through the shop.
The appellant said that parts of the maisonette were used in connection with the business carried on in the shop, and that one room in the maisonette was partly used as an office and another was occasionally used for storage purposes. Four out of the six rooms, he contended, had a shared use.
The valuation tribunal had dismissed the taxpayer's appeal against the listing officer's decision on the basis that the question to be determined was whether the maisonette could be separately occupied. This approach was found by the High Court to be in error, since the valid issue is whether any part is used as living accommodation.
It was further asserted that the valuation tribunal was biased because it was chaired by a member of the county council which had a financial interest in maintaining the council tax income from the property.
The complaint of bias was rejected, since the disqualification from sitting on a tribunal only applies to members of the relevant billing authority, and since regulation 23[4] of the Council Tax [Alteration of Lists and Appeals] Regulations 1993 [511993/290] provides that a person is not disqualified by reason only of the fact that he is a member of an authority which derives revenue directly or indirectly from council tax payments.
)The High Court, in dismissing the appeal from the decision of the valuation tribunal, determined that it was immaterial whether the maisonette was capable of separate occupation, and that the property was composite because there was at least one room which was occupied or used exclusively for the purpose of a dwelling.
Clement (LO) v Bryant & Others HC [RA 2003]Clement (LO) v Bryant & Others HC [RA 2003]
The Listing Officer’s appeal against the West Wales Valuation Tribunal’s decision, that 11 bedsits occupied by elderly people comprised a single property, was upheld by the High Court. The High Court decided that the Valuation Tribunal had erred by placing too much importance on the elderly nature of the residents, the absence of a shower/bath facility and the degree of communal living. Instead, the only factor the Tribunal needed to consider was whether or not the bedsits were self-contained units of accommodation. In this case, it was clear from the facts that the bedsits were constructed or adapted for use as separate living accommodation. The absence of a bath or a shower did not negate the fact that the bedsits were self-contained.
Stubbs v Hartnell (LO) CA [RVR 2002]Stubbs v Hartnell (LO) CA [RVR 2002]
The appellant’s plot of land, mooring, and the houseboat moored to it, in which he lived, constituted domestic property and a hereditament for Council Tax purposes.
The property had therefore correctly been treated as a dwelling and included in the Valuation List.
