Curzon Berkeley Ltd, R (on the application of) v Valuation Officer & Ors [2001] EWHC Admin 1130 (19th December, 2001)

Neutral Citation Number: [2001] EWHC Admin 1130 IN THE HIGH COURT OF JUSTICE Administrative Court Ref:CO/2940/01 QUEEN’S BENCH DIVISION ADMINISTRATIVE COURT MR JAMES GOUDIE QC (Sitting as a Deputy Judge of the High Court) IN THE MATTER OF AN APPLICATION TO APPLY FOR JUDICIAL REVIEW AND IN THE MATTER OF THE LOCAL GOVERNMENT FINANCE ACT 1988 AND REGULATIONS THEREUNDER Royal Courts of Justice Strand London WC2A 2LL 19th December 2001 B e f o r e : Mr James Goudie QC ____________________ THE QUEEN on application of CURZON BERKELEY LIMITED - and - S P BLISS (VALUATION OFFICER, LONDON WESTMINSTER GROUP INLAND REVENUE) ____________________ (Transcript of the Handed Down Judgment of Smith Bernal Reporting Limited, 190 Fleet Street London EC4A 2AG Tel No: 020 7421 4040, Fax No: 020 7831 8838 Official Shorthand Writers to the Court) ____________________ Mr David Holgate QC and Mr Timothy Morshead (instructed by Lipkin Gorman) for the Claimant Lord Silsoe QC and Mr Rupert Warren (instructed by the Solicitor of Inland Revenue) for the Defendant ____________________ Crown Copyright © INTRODUCTION This is an application by the Claimant ratepayer, an operator of self-contained serviced apartments, to quash decisions of the Defendant Valuation Officer (“the VO”) on 20 March 2001 to make alterations to the public domain Non-Domestic Rating (“NDR”) Lists for Westminster City Council (“the Council”) for the years 1995 and 2000 in respect of buildings at 39 Hill Street and 56 Curzon Street in the Council’s area. The Claimant may stand to lose over £½ million if the entries are ultimately fully upheld. The judicial review claim form was lodged on 25 July 2001. That is over 4 months later. It was more than a month out of time. On 5 September 2001 Maurice Kay J ordered that the claim be listed as an oral application for permission on notice. The parties subsequently agreed that the hearing be treated as a hearing on the merits, rather than for permission only. There are 2 remaining grounds. In relation to both the Defendant takes points in relation to alternative remedy and delay. The alternative remedy is the Valuation Tribunal, and from there by way of appeal to the Lands Tribunal and, on questions of law, to the Court of Appeal. The Claimant has already appealed to the Valuation Tribunal in respect of the quantum of the new entries. The first ground of challenge relates to the descriptions in the decisions of the units of rateable occupation, the hereditaments. The Claimant submits, first, that the descriptions are wrong; and, secondly, that the error in the description makes the entries incurably invalid. This ground applies to both buildings. Its practical significance is that the VO cannot now make substitute decisions to like effect. He acted just before a cut off date on 31 March 2001 in relation to retrospective decisions. The second ground applies only to 39 Hill Street. It arises from the fact that the Claimant is the freehold owner of 39 Hill Street, but the long leasehold owner of 56 Curzon Street. BACKGROUND 39 Hill Street has 9 floors and a basement. 56 Curzon Street has 8 floors and a basement. Each building consists principally of residential apartments of various sizes. Each also has a restaurant in its basement, which is demised to restaurant operators, and separately rated. Additionally, there are administrative offices on the ground floor of 56 Curzon Street, used by the Claimant. There are 63 apartments at 39 Hill Street. 35 are let to third parties on long leases. There are 86 apartments at Curzon Street. 34 are let to third parties on long leases. It is the apartments that it retains (27 at 39 Hill Street and 50 at 56 Curzon Street) that the Claimant puts to use in its business as an operator of self-contained apartments. These retained apartments are serviced. Services are available to the long leaseholders. Prior to 20 March 2001, the only hereditament shown on NDR lists for the Council, maintained by the Defendant, in relation to either building (above the basements), was in relation to the administrative office at 56 Curzon Street. This was described by its detailed address (“7 Curzon Court, 56 Curzon Street”), with the description “Offices and premises”. The Claimant did not pay any NDR in relation to any of the apartments that it retains. Instead, all of them were treated as domestic properties, as, of course, were, and are, the apartments let on long leases. All the apartments were separately assessed for Council Tax. This the Claimant paid in respect of the apartments that it retains. It is, however, to be noted that the Claimant does not suggest that the serviced, short stay apartments, are not rateable. Moreover, the short stay apartments are spread throughout the two buildings, interspersed amongst those not available as such, so that both kinds are to be found on almost every floor. Further, any given apartment which is available may be dealt with in a way which switches it from domestic to non-domestic or vice versa. Like the NDR list, the council tax list is also a public domain document: see Sections 22 and 28 of the Local Government Finance Act 1992. In the council tax context, the unit of assessment is referred to as “the chargeable dwelling”. (Since 1990 rates no longer apply to domestic property.) PRESENT POSITION In July 2000, the Defendant contacted the Claimant. He indicated that he considered that NDR should be paid in respect of the apartments retained by the Claimant. Discussions took place. Then on 20 March 2001, shortly before a deadline expired on 31 March 2001, the Defendant made the decisions complained of. He altered the NDR lists for the years 1990, 1995 and 2000 by making new entries in each list. The Claimant is not, however, an interested person for the purposes of the 1990 list. The new entries were to the same effect in respect of each building. They described the building as “Serviced Apartments and Premises”. Rateable values were assigned to each new entry. STATUTORY FRAMEWORK The task of compiling and maintaining the NDR list is the responsibility of the VO. Pursuant to Section 41 of the Local Government Finance Act 1988 (“the LGFA 1988”) he had to compile a list on 1 April 1990 and on 1 April in every fifth year thereafter, ie thus far in 1995 and 2000. (Before 1 April 1990 rating had covered domestic and non-domestic property.) Section 41, which is in Part III: Non-Domestic Rating of the LGFA 1988, provides: “(1) In accordance with this part the valuation officer for a [billing authority] shall compile, and then maintain, lists for the authority (to be called its local non-domestic rating lists). (2) A list must be compiled on 1 April 1990 and on 1 April in every fifth year afterwards. (3) A list shall come into force on the day on which it is compiled and shall remain in force until the next one is compiled five years later. ... (5) Not later than 31 December preceding a day on which a list is to be compiled the valuation officer shall send to the authority a copy of the list he proposes (on the information then before him) to compile. (6) As soon as is reasonably practicable after receiving the copy the authority shall deposit it at its principal office and take such steps as it thinks most suitable for giving notice of it. (6A) As soon as is reasonably practicable after compiling a list the valuation officer shall send a copy of it to the authority. (6B) As soon as it is reasonably practicable after receiving the copy the authority shall deposit it at its principal office. (7) A list must be maintained for so long as is necessary for the purposes of this Part, so that the expiry of the five year period for which it is in force does not detract from the duty to maintain it. ...” In order to appear in the NDR list a building must satisfy conditions set out in Sections 41 and 42. These include that the hereditament is at least in part non-domestic. Section 42 provides:- “(1) A local non-domestic rating list must show, for each day in each chargeable financial year for which it is in force, each hereditament which fulfils the following conditions on the day concerned - (a) it is situated in the authority’s area, (b) it is a relevant non-domestic hereditament, (c) at least some of it is neither domestic property nor exempt from local non-domestic rating ... (2) For each day on which a hereditament is shown in the local list, it must also show whether the hereditament - (a) consists entirely of property which is not domestic, or (b) is a composite hereditament. (3) For each day on which a hereditament is shown in the list, it must also show whether any part of the hereditament is exempt from local non-domestic rating. (4) For each day on which a hereditament is shown in the list, it must also show the rateable value of the hereditament. ...” The rateable value must be determined according to the rules set out in Schedule 6 to the LGFA 1988. Section 43 relates to liability in respect of occupied hereditaments. Subsection (1) provides:- “A person (the ratepayer) shall as regards a hereditament he subject to a non-domestic rate in respect of a chargeable financial year if the following conditions are fulfilled in respect of any day in the year - (a) on the day the ratepayer is in occupation of all or part of the hereditament, and (b) the hereditament is shown for the day in a local non-domestic rating list in force for the year.” Section 55 of the LGFA 1988 relates to the alteration of lists, and authorises the promulgation of regulations to control the VO’s duty to maintain the list. It provides:- “(1) The Secretary of State may make regulations providing that where a copy of a list has been sent under section 41(5) or 52(5) above and the valuation officer alters the list before it comes into force - (a) the officer must inform the [billing authority] or Secretary of State (as the case may be), and (b) the authority or Secretary of State (as the case may be) must alter the deposited copy accordingly. (2) The Secretary of State may make regulations about the alteration by valuation officers of lists which have been compiled under this Part, whether or not they are still in force; and subsections (3) to (7) below shall apply for the purposes of this subsection. (3) The regulations may include provision that where a valuation officer intends to alter a list with a view to its being accurately maintained, he shall not alter it unless prescribed conditions (as to notice or otherwise) are fulfilled. (4) The regulations may include provision - (a) as to who (other than a valuation officer) may make a proposal for the alteration of a list with a view to its being accurately maintained, (b) as to the [manner and] circumstances in which a proposal may be made [and the information to be included in a proposal], (c) as to the period within which a proposal must be made, (d) as to the procedure for [and subsequent to the making of] a proposal, and [(dd) as to the circumstances within which and the conditions upon which a proposal may be withdrawn], (e) requiring the valuation officer to inform other prescribed persons of the proposal in a prescribed manner. (5) The regulations may include provision that, where there is a disagreement [between a valuation officer and another person making a proposal for the alteration of a list - (a) about the validity of the proposal; or (b) about the accuracy of the list], an appeal may be made to a [valuation tribunal] established under Schedule 11 below. ...” It is to be noted that subsection (5) is expressed in terms of the “validity” of the proposal and the “accuracy” of the list; and that subsection (6)(a) provides express Parliamentary sanction for Regulations to achieve a retrospective effect. The VO is appointed by the Commissioners of Inland Revenue: Section 61 of LGFA 1988. His prime role is to ensure that the NDR list identifies each hereditament and its rateable value. The Secretary of State sets the non-domestic rating multiplier; and billing authorities, such as the Council, calculate the amount of rates payable, collect them, and may remit them, on grounds of hardship or otherwise: see Sections 47-49, 56 and 62, and Schedules 7 and 9. Section 64 of the LGFA 1988 is the interpretation provision in relation to hereditaments. Referring to the General Rate Act 1967 as “the 1967 Act”, it provides:- “(1) A hereditament is anything which, by virtue of the definition of hereditament in section 115(1) of the 1967 Act, would have been a hereditament for the purposes of that Act had this Act not been passed. ... (4) A hereditament is a relevant hereditament if it consists of property of any of the following descriptions - (a) lands; ... (8) A hereditament is non-domestic if either - (a) it consists entirely of property which is not domestic, or (b) it is a composite hereditament. (9) A hereditament is composite if part only of it consists of domestic property. ...” Section 66 of the LGFA 1988 relates to domestic property. It provides:- ... (1) Subject to subsections (2), (2B) and 2E) below, property is domestic if - (a) it is used wholly for the purposes of living accommodation, ... (2) Property is not domestic property if it is wholly or mainly used in the course of a business for the provision of short-stay accommodation, that is to say accommodation - (a) which is provided for short periods to individuals whose sole or main residence is elsewhere, and (b) which is not self-contained self-catering accommodation provided commercially. (2A) Subsection (2) above does not apply if - (a) it is intended that within the year beginning with the end of the day in relation to which the question is being considered, short stay accommodation will not be provided within the hereditament for more than six persons simultaneously; and (b) the person intending to provide such accommodation intends to have his sole or main residence within that hereditament throughout any period when such accommodation is to be provided, and that any use of living accommodation within the hereditament which would, apart from this subsection, cause any part of it to be treated as non-domestic, will be subsidiary to the use of the hereditament for, or in connection with, his sole or main residence.] (2B) A building or self-contained part of a building is not domestic property if - (a) the relevant person intends that, in the year beginning with the end of the day in relation to which the question is being considered, the whole of the building or self-contained part will be available for letting commercially, as self-catering accommodation, for short periods totalling 140 days or more, and (b) on that day his interest in the building or part is such to enable him to let it for such periods. (2D) Subsection (2B) above does not apply where the building or self-contained part is used as the sole or main residence of any person ...” Schedule 9 to the LGFA 1988 (incorporated by Section 62) contains provisions about administration. Paragraphs 8 and 9 relate to inspection of the NDR list. In addition to the primary legislation, there are numerous relevant Regulations. These include the NDR (Miscellaneous Provisions) Regulations 1989, Statutory Instrument 1989 No 1060. Regulation 2 prescribes the information to be shown in the list. It includes “a description of the hereditament”, its address, and any reference number ascribed to it by the VO. Other Regulations include the NDR (Alteration of Lists and Appeals) Regulations 1993, as frequently amended (“the 1993 Regulations”), Statutory Instrument 1993 No 291. They control the VO’s power of alteration. Alterations are capable of having retrospective effect. This is, however, subject to important exceptions, especially in relation to decisions after 31 March 2001. Regulations 2 and 3 of the 1993 Regulations are interpretation provisions. They include definitions of “interested person”, “proposal” and “alteration”. Regulation 4A relates to the circumstances in which proposals may be made. Paragraph (1) provides:- “The grounds for making a proposal to alter a list are as follows - (a) the rateable value shown in the list for a hereditament was inaccurate on the day the list was compiled; (b) the rateable value shown in the list for a hereditament is inaccurate by reason of a material change of circumstances which occurred on or after the day on which the list was compiled; (c) the rateable value shown in the list for a hereditament by reason of an alteration made by a valuation officer is or has been inaccurate; (d) the rateable value or any other information shown in the list for a hereditament is shown, by reason of a decision in relation to another hereditament of a valuation tribunal, the Lands Tribunal or a court determining an appeal or application for review from either such tribunal, to be or to have been inaccurate; (e) the day from which an alteration is shown in the list as having effect is wrong; (f) a hereditament not shown in the list ought to be shown in that list; (g) a hereditament shown in the list ought not to be shown in that list; (h) the list should show that some part of a hereditament which is shown in the list is domestic property or is exempt from non-domestic rating but does not do so; (i) the list should not show that some part of a hereditament which is shown in the list is domestic property or is exempt from non-domestic rating but does so; (j) property which is shown in the list as more than one hereditament ought to be shown as one or more different hereditaments; (k) property which is shown in the list as one hereditament ought to be shown as more than one hereditament; (l) the address shown in the list for a hereditament is wrong; (m) the description shown in the list for a hereditament is wrong; and (n) any statement required to be made about the hereditament under section 42 of the Act has been omitted from the list.” Broadly, an “interested person” may make a “proposal” where he has reason to believe that any of the grounds set out in paragraph (1) exists; and a relevant authority may make a “proposal” in more limited circumstances. Regulation 4B relates to periods in which proposals may be made in respect of the 1995 list, and includes a reference to proposals “to correct an inaccuracy”; and Regulation 4C relates to periods in which proposals may be made in respect of the 2000 list (and subsequent lists). Regulation 5A relates to the manner of making proposals and information to be included. A proposal must identify the property to which the proposal relates. Regulation 7 relates to proposals which are to be treated as invalid. It provides:- “(1) Where the valuation officer is of the opinion that a proposal has not been validly made, he may within four weeks of its service on him serve notice (an ‘invalidity notice’) on the proposer that he is of that opinion, and stating - (a) the reasons for that opinion, and (b) the effect of paragraphs (3) to (6). (2) The valuation officer may at any time withdraw an invalidity notice by serving notice in writing on the proposer; and on such withdrawal any appeal against the invalidity notice shall be treated as having been withdrawn. (3) Unless an invalidity notice has been withdrawn in accordance with paragraph (2), the proposer may, within four weeks of its service on him, (a) subject to paragraph (4) make a further proposal in relation to the same property, notwithstanding the previous expiry of any period applicable under regulation 4 [regulation 4B], or (b) appeal against the notice to the relevant valuation tribunal. (4) No proposal may be made under paragraph 3(a) where the proposal to which the invalidity notice relates was made under paragraph 3(a) or made after the expiry of any period applicable under regulation 4 [regulation 4B]. (5) Where a proposal is made under paragraph 3(a), the proposal in respect of which the invalidity notice was served shall be treated as having been withdrawn. (6) An appeal against an invalidity notice shall be initiated by serving notice of disagreement on the valuation officer. (7) Unless the valuation officer withdraws the invalidity notice within four weeks of the service of the notice under paragraph (6), on the expiry of that period he shall inform the clerk of the relevant valuation tribunal of - (a) the entry in the list (if any) which it is proposed to alter, (b) the grounds on which the proposal was made, and (c) the reasons for his opinion that the proposal has not been validly made. ... (9) Until it is finally decided that the proposal to which an invalidity notice relates was validly made, regulations 8 to 12 shall not apply in relation to the proposal; and where it is finally decided as so mentioned, those regulations shall have effect as if the proposal had been served on the valuation officer on the date of that final decision. ... (11) Nothing done under this regulation shall be construed as preventing any party to an appeal under regulation 12 from contending for the purposes of that appeal that the proposal to which the appeal relates was not validly made.” Regulation 12(1) provides:- “(1) Where the valuation officer is not of the opinion that a proposal is well-founded, and (a) the proposal is not withdrawn, and (b) there is no agreement as provided in regulation 11, the disagreement shall, no later than the expiry of the period of six months [three months] beginning on the day on which the proposal was served on him, be referred by the valuation officer, as an appeal by the proposer against his refusal to alter the list, to the relevant valuation tribunal.” Regulation 13 relates to the time from which alteration is to have effect in respect of pre-2000 lists; and Regulation 13A to the time from which alteration is to have effect generally. In the case of a new entry into the rating list by a VO, the date from which an alteration is to have effect is the date when the event giving rise to the insertion occurred, but:- (1) If the alteration was made before 1 April 2001, no earlier than 1 April 1992 but otherwise without limit; (2) If the alteration is made on or after 1 April 2001, as a general rule, no earlier than 1 April 2001. Prior to 1 April 2000 the 1993 Regulations enabled new entries to be added by the VO to the rating list effective from any date, but no earlier than 1 April 1992. The 2000 Amendment Regulations (introduced with effect from 1 April 2000) continued this regime up until 1 April 2001, but thereafter largely removed the ability of the VO to make a new entry effective from a date earlier than 1 April 2001. In effect the 1990 and 1995 rating lists were to become closed to the VO in this context. Regulation 18 requires the VO, within four weeks of effecting an alteration, to serve notice on the ratepayer stating (inter alia) the effect of the alteration. IDENTIFICATION The Claimant submits that in the present case there is a necessity to know which parts of the buildings remain under the Council Tax regime, as in the past, and which parts have been moved into the NDR regime. Yet, submits the Claimant, the entries made by the Defendant equally describe (at least) these two different hereditaments:- (1) a hereditament relating to the whole building at each address, on the basis that the whole property only includes serviced apartments; and (2) a hereditament being something less than the whole building, consisting of just the parts which are serviced apartments - in which case the entries are further ambiguous (in fact, silent) as to which apartments are said to be “serviced” and so within the hereditament, and which are not. The Claimant relies especially on the decisions of the Court of Appeal in R v Northamptonshire LVC, ex p Anglian Water Authority [1990] RA 93 (“ Anglian Water ”) and Westminster City Council v Woodbury [1992] RV1 (“ Woodbury ”); on the principle (derived from those authorities) that, subject only to the plentiful application of common sense principles of construction, the list should normally be self-speaking; and on evidence as to some confusion. The Claimant submits that the Defendant has wrongly supposed that the concept of a “composite hereditament” defined by Section 64(9) of the LGFA 1998, ie an hereditament which contains a mix of uses, entitles him to treat property which has more than one rateable occupier/owner as a single “composite hereditament”, and absolves him from his duty to identify what the hereditament actually is. The Claimant’s case is that what the Defendant ought to have done was to identify in the lists those parts of the two buildings which are said to be hereditaments in the Claimant’s rateable ownership or occupation, whether composite or otherwise; and that the Defendant’s failure to do so (as it alleges) means that the entries are invalid, and incurably so. The Defendant’s main case is that the list entries clearly indicate that the hereditaments are the serviced apartments in the two buildings (rather than other elements present); that the fact that some of the serviced apartments in each building are not liable to rates is recognized by the designation of the hereditament (by the letter “C”) as “composite”; and that, in any event, any inaccuracy in description is curable through the statutory machinery. Essentially two questions arise on this limb of the case. Are the descriptions of the hereditaments accurate? If they are not, are they invalid and incurable? The question whether the descriptions are accurate itself raises two questions. What is the true interpretation of the descriptions? (As to that, see Anglian Water at 101-103 and Woodbury at 7-15). Are the descriptions, on that interpretation, accurate? In my judgment, there is no doubt what the description “Serviced Apartments and Premises”, in conjunction with “C” for “composite”, means. It means all the apartments in the building, and nothing but the apartments. (The Anglian Water and Woodbury cases are very different. In the former, the reference was to a sewage works which no longer existed. In the latter, it included property (floating vessels) that was not rateable.) It does not distinguish between apartments on long leases, which remain domestic, and subject to council tax, and apartments available for short term occupation, and subject to NDR. The hereditament cannot, however, be all the apartments without distinction, unless it can be regarded as indeed being a composite hereditament. The Claimant objects that it is not a composite hereditament. True there are both domestic and non domestic parts. But they are not in the same ownership/ occupation. The non-domestic parts, the retained apartments, subject to NDR, are in the ownership/occupation of the Claimants. The domestic parts, the apartments on long leases, subject to council tax, are in the ownership/occupation of the various long lessees. Is this difference of occupation fatal to there being a composite hereditament? Lord Silsoe QC, for the VO, accepts that, as a general rule, if a whole building is rated for NDR, under one entry in the list, as an indivisible hereditament then an exclusive occupier of one part of it cannot be made liable for the rate liability of the whole. This is because there is nothing shown in the rate, or the list upon which it is based, to show that is the value of that part: see the decision of the Court of Appeal in Verrall v Hackney LBC [1982] 1 QB 445 (“ Verrall ”) and of the Divisional Court in Ford v Burnley Magistrates’ Court [1995] RA 205. Given, however, that in the case of a composite hereditament, the rate on the hereditament is attributable to the non-domestic use, that there is no NDR rate on the whole and that the value of the whole, or that of the domestic part, does not appear in the list, he submits that the rationale for the “general rule”. and the ratio of Verrall , have no application to this situation. I do not accept this submission. In my judgment any hereditament, including a composite hereditament, must be in single rateable occupation or ownership; and cannot be described so as to embrace parts of the building which are in different ownership or occupation, whether non-domestic or domestic. What then is the significance of there being (whether by an error of law, or fact, or both) an inaccurate and/or ambiguous identification/description of the hereditament? In my judgment, this does not make the entry in the NDR list a nullity. Rather, it can (as in the Anglian Water and Woodbury cases) be corrected, by the Valuation Tribunal , under the statutory scheme. Such a correction is within the wide ranging grounds in Regulation 4A of the 1993 Regulations. I reject the Claimant’s first ground of challenge. DOMESTIC OR NON DOMESTIC Section 66 of LGFA 1988 distinguishes between domestic property, which is not subject to NDR, and non-domestic property, which is (subject to exemptions). Section 66(2B) identifies when a building or a self-contained part of a building is not domestic property. It does so by reference to the state of mind of the “relevant person”, as defined by Section 66 (2C). The Claimant’s short point, in relation to 39 Hill Street, is that, being the freeholder, it cannot be the relevant person. The Defendant’s case is that there is a patent drafting error in Section 66(2C), and that the Court should, in accordance with the approach of the House of Lords in Inco Europe v First Choice Distribution [2000] 1 WLR 586 (“ Inco ”), insert extra words, so that it would read “Where the property in question is a building or a self-contained part of a building and is not subject as a whole to a relevant leasehold interest, the person having the freehold in the whole of the building or self-contained part ” The Defendant also relies on Section 3 of the Human Rights Act 1998 (“the HRA”), and Article 14 (the prohibition of discrimination) of the European Convention of Human Rights (“the ECHR”), in conjunction with Article 1 of the First Protocol (peaceful enjoyment of possessions). Section 3 is a strong interpretative obligation: see Lord Steyn in the rape shield case, R v A (No 2) , [2001] 2WLR 1546 at 1562-1563. In my judgment, this is a plain case of a drafting mistake. Mr David Holgate QC for the Claimant was unable to find any rationale for the distinction. In Inco , at 592, Lord Nicholls of Birkenhead said that before adding (or omitting or substituting) words the court must be “absolutely sure” of three matters: (1) the intended purpose of the statute (or provision) in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision parliament would have made had the error in the Bill been noticed. I am satisfied as to these three matters. Lord Nicholls, however, continued:- “Sometimes, even when these conditions are met, the court may find itself inhibited from interpreting the statutory provision in accordance with what it is satisfied was the underlying intention of Parliament.” Lord Nicholls instanced when:- “... the subject matter may call for a strict interpretation of the language ...” He gave as an example “penal legislation”. The issue before me is whether another example of the subject matter calling for a strict interpretation of the statutory language is taxation. In my judgment, it is. There is a strong constitutional convention which maintains an exclusive Parliamentary control over the levying, and the expenditure, of public money. In particular, it is well established that nothing less than clear, express and unambiguous language is effective to levy a tax. I am not persuaded that this position has changed. No doubt taxation statutes should be construed purposively. But there is a limit to what can properly be done by purposive construction by the courts, which must confine themselves to interpretation and not stray into legislation. Nor, in my judgment, can the Defendant, who is in any event not the “victim”, invoke the HRA and the ECHR in order to impose a tax burden on A, even so as to avoid discrimination as between A and B. Again, the solution to the problem is within the province of the legislature. I would uphold the Claimant’s second ground of challenge. It is therefore necessary to consider whether there are any bars to the Claimant obtaining relief (limited to 39 Hill Street). OTHER ISSUES The Defendant raises two bars to the Claimant obtaining relief. These are the availability and effectiveness of alternative remedies, under the 1993 Regulations; and delay. As regards alternative remedy I have in mind especially, R v Leeds City Council, ex p Hendry (1994) 6 Admin LR 439 at 443 D-F; ex p Waldron [1986] QB 824 at 852F; Harley Development Inc v Commissioner of Inland Revenue [1996] 1 WLR 727 at 736B; and Lord Denning R v Paddington VO ex p Peachey Property Co [1966] 1 QB 380. I regard the Administrative Court, rather than the Valuation Tribunal, as having been the appropriate forum for determination of the legal and constitutional issue as to whether or not words should be implied into a taxing statute. As to delay, the Claimant submits the delay has not caused any prejudice, which is common ground, and that there is a good explanation for it, which is disputed. Mr Vickery, of Healey & Baker, provides the explanation. His firm was retained by the Claimant in the matter from July 2000. It appears that he knew of the entries that are now challenged by not later than 9 April 2001. Indeed, on 11 April 2001, he lodged appeals against the assessments, ie submitted proposals, in respect of both the 1995 and 2000 lists to the Valuation Tribunal, praying in aid paragraph (c) of the 14 grounds in Regulation 4A(1) of the 1993 Regulations, as amended. Mr Vickery then made various enquiries. These were completed by 18 May when he received a Schedule showing which of the apartments remained in the Council Tax List. There was then just over a month to run until 3 months were up. Instructions were not, however, sent by the Claimant’s solicitors to Counsel until 15 June 2001, to put it mildly dangerously late, given a deadline of 19 June. To compound matters they chose Counsel who was at that time extremely busy. Even if promptness could be said in this case to equate with 3 months, the deadline was missed. The Claimant’s Solicitor has made a witness statement which does not, however, deal with the delay. I very much doubt whether choice of Counsel who is not able to deal with the matter timeously is a sufficiently good explanation for delay. That point, however, is of very limited relevance. The problem was not so much how long it took Counsel to turn the papers round. The problem rather was how late it was that they were sent to him. All in all I do not find that there was good reason for the delay, even if the Claimant did not receive before the end of March notices of deletion of the entries in the Council tax list. It appears that, before Counsel was instructed, the Claimant’s professional advisers were not focussing upon the possibility of judicial review at all. It is also the case that the Claimant has an alternative appeal route. No relevant time limit has yet expired. Nonetheless, I consider that the public interest in the point which I would determine in favour of the Claimant is such that they should not be barred by delay. CONCLUSION I make an Order quashing the alterations made by the Defendant on or about 20 March 2001 to the Non-Domestic Rating Lists for Westminster City Council compiled in each of the years 1995 and 2000 whereby the Defendant made entries on those Lists for “serviced apartments and premises” at 39 Hill Street, London W1X 7FG. I refuse such an order in respect of the list compiled in the year 1990. I refuse any like or any Order in respect of 56 Curzon Street, London W1Y 7PF. - - - - - - - - - - THE DEPUTY JUDGE: For the reasons given in the judgment, a draft of which has been handed down, I make the order indicated in the concluding paragraph and I have copies here of the judgment in its perfected form and I am grateful for the list of corrections from the parties. MR FORSDICK: My Lord, I appear on behalf of the claimant in this case and I have an application for costs on an alternative bases. My Lord, I apply first of all for a full award of costs and alternatively for a partial award of costs to reflect the overall merits of the bringing of this application. I have a number of points in support of my application. First of all, this case as my Lord indicated in the judgment is of significant financial importance to the claimant. It also raised points which my Lord considered of public interest. Indeed, that was the reason why delay was not sufficient to stop the Judicial Review being granted. My Lord, in my submission, when a public authority levies taxation inappropriately and incorrectly and where a claimant succeeds in showing that to the court, as a matter of principle, that claimant should not suffer the cost consequences of bringing the matter before the court, even if not wholly successful in every argument that is raised. That is my first point. The second point is that in relation to 39 Hill Street the claimant, as I understand it, achieved that which was sought to be achieved, namely the quashing of the alteration in respect of that entry for those premises with the indication that there can now be no retrospective alteration for this for that period. So in respect of 39 Hill Street, in my submission, an unarguable application for costs insofar as that takes us. The third point is that it follows from the success in relation to 39 Hill Street that the claimant was right to bring this case before the courts rather than before the Valuation Tribunal. And therefore, this costs application is based upon the supposition that an application for Judicial Review was appropriate, at least to that extent so therefore we were going to be here anyway. Fourthly, even on the first substantive ground of challenge, ultimately in respect of which my client was unsuccessful, even in respect of that first ground of challenge, the claimant has been successful in showing that the VO adopted a wrong approach, failed to look at the first logical step in the analysis: namely what is the nature of the land holding for the purposes of the nature of the hereditament. The end result was that my client lost that point on a very narrow point, I will deal with this in a moment, as to the appropriateness of alternative remedies when you go to the Valuation Tribunal. However on the wide-ranging point of law as to how you approach hereditament and composite hereditament and so on, wholly successful, notwithstanding numerous and detailed arguments on behalf of the valuation officer. The consequence of that, my Lord, is that now, if this case were to go in front of the Valuation Tribunal, there is clarification from this court as to the correct approach to composite hereditaments and my Lord, in my submission, without that clarification the Valuation Tribunal would have had some difficulty in knowing how to approach the matter. So even to that extent the Judicial Review has served a purpose. Therefore, I ask the court to take a step back and say: yes, of course, my client was unsuccessful in relation to one part of the Judicial Review, however it obtained a substantial reduction in its liability to taxation, it has achieved clarification as to its position in relation to the one outstanding alteration, and in respect of both buildings the public authority has been shown to have acted inappropriately and incorrectly. In those circumstances, I seek a full order for costs. If I am wrong on that, my Lord, I seek a percentage to be assessed by the courts. We would put it at least at three-quarters of the total cost on the basis that first of all we had to be here anyway. Secondly, in relation to half the case, and on the point of constitutional importance my client won. Thirdly, my client only fell at the final hurdle on the last issue. Fourthly, my client overcame the arguments on delay, and fifthly my client established through my Lord's judgment some points of general application which the VOA was not willing to concede. In my submission in those circumstances, it would be entirely right for this court to make a substantial percentage award in my client's favour, if not a consent award. That is my application. THE DEPUTY JUDGE: Thank you very much. Yes, Mr Warren? MR WARREN: My Lord, I resist those two alternative applications. In my submission, either there should be no award of costs in this case or, at the most, costs to be assessed on the detailed basis but restricted to those incurred in relation to ground 3, the ground in respect of which the claimant was successful. The reasons for those submissions are as follows: certainly the claimant should not have any costs awarded which reflect any work on ground 2, that which was withdrawn in the skeleton argument. That goes without saying. Secondly, contrary to my learned friend's submissions, your Lordship rejected the claimant's first ground of challenge and it does not necessarily follow that any particular result would obtain in the Valuation Tribunal despite your Lordship's judgment. Leaving that aside, these are costs in relation to the Judicial Review and on that ground the claimant was not successful because there was plainly an alternative remedy which went to the heart of the first ground of challenge. So no costs in my submission should be ordered to reflect that ground. In relation to ground 3, the point was delayed and it was only the public interest in section 66. 2C of the act which merited relief being granted in the public interest. The claimant, this particular claimant had unduly delayed, save but for that point and this claimant should not in my submission be awarded costs for those reasons. So, as I say, My Lord, I submit that either no order of costs on those bases or at the most costs restricted to ground 3. I would only add that the financial outcome for the claimant is not relevant to a consideration of costs on either ground 1 or ground 3, in the circumstances of the case. THE DEPUTY JUDGE: Thank you. MR FORSDICK: Just two points: in relation to the Judicial Review in respect of one of the premises, my client achieved that which he set out to achieve, was successful in that and achieved reduction in rates bill as a result. In that context, there is clearly the costs of a Judicial Review, of a full Judicial Review, even if limited to that ground 3 point, that should be awarded. THE DEPUTY JUDGE: My recollection is that the ground 3 point took up a lot less time than the ground 1 point. MR FORSDICK: Of course, my Lord, I was not here so I am unable to assist the court on that. The second point in relation to delay, my Lord, is that delay has no cost consequences for anybody in this case. THE DEPUTY JUDGE: You were seeking to pray it in aid? MR FORSDICK: No, what I was seeking to pray in aid, my Lord, was that there have been arguments raised against my client, a whole host of argument raised against my client, that my client was able to successfully rebut and only on one issue did not successfully rebut the arguments raised by the VOA. In those circumstances, we say full award of costs but in any event, at the very least, an award of costs to reflect the substantial success of my client’s overall . . . THE DEPUTY JUDGE: The claimant has been only partially successful. This seems to me to be an order where they should be awarded part, but by no means the whole, of the costs and I will order that the valuation officer pays the claimant one third of the claimant's costs. MR FORSDICK: My Lord, there is one further application. My client wishes to ask this court for permission to appeal against the one paragraph of my Lord's judgment, paragraph 55, which deals with the alternative remedy point. I make the application on the two alternative bases in part 52, first of all that there is reasonable prospect of success and secondly that, in any event, there is some other compelling reason why the appeal ought to be heard and considered by the Court of Appeal. In my submissions to my Lord, I will submerge the two grounds on which permission ought to be granted into one. My Lord, at paragraphs 50 to 54 of the judgment, it has been held that the description and identification of the hereditaments is wrong and the VOA's submissions to the contrary are roundly rejected in paragraph 54 along the lines of the submissions of my learned friend Mr Holgate to the court and those submissions were accepted. THE DEPUTY JUDGE: In the event of an appeal, no doubt there will be a cross-appeal in relation to that. MR FORSDICK: Perhaps my Lord, but the position we say is that the description and identification of the hereditaments is simply wrong. That is the first point. The second point is that the error arises from a failure to undertake the first logical step in the analysis, which is to identify the areas of rate of occupation and ownership within each building. So a fatal flaw, we say, at the outset of the assessment of the appropriateness of the alteration and the existence of that flaw has been accepted by the court. Thirdly, it follows that the approach of the VO to composite hereditament was misconceived, an important point of principle established in this court in my Lord's judgment. Fourthly, and this is where obviously my clients depart from the judgment to an extent. The claimant submitted that it was entitled to be put back in the position it would have found itself in if the wrong entries had never been made. My Lord will recall, as I understand it, that the submissions were made on the Hoffman and Roche test. Fifthly, none of the statutory grounds of appeal to the Valuation Tribunal achieved the same result as a quashing order in Judicial Review. In paragraph 55, my Lord has referred to regulation 4A of the 1993 regulations. But we say that none of those have the impact of putting my client back in the position as if the fundamentally misconceived alterations were never made. Sixthly, if the VO had made an invalid entry we say the claimant is entitled to a remedy which recognises that it is now too late to make a valid alteration. Of course, my Lord, I do want to reargue the merits of that proposition. The purpose of me raising these points again is to show that there is an arguable point of general interest that is raised by this point. My Lord has then relied on two cases, Anglian Water and Woodbury to show that an invalid alteration can be remedied by the Valuation Tribunal. But of course those two cases were in relation to invalid proposals and in both cases, as I understand those cases, the Valuation Tribunal had declined jurisdiction to deal with them on the basis that they were invalid and therefore the consequence of those cases is simply to show that a Valuation Tribunal can decline to deal with invalid proposals. Those cases do not give rise necessarily to an implication that an alteration that has had effect can be undone by a Valuation Tribunal as a matter of its general powers. My Lord, it follows, we say, that those cases are not authority and this is the essential proposition that is sought to be established. Those cases are not authority, the proposition that the Valuation Tribunal can strike out an entry in the list on the basis it was invalid. Next, the judgment does not say that, as a matter of law, the Valuation Tribunal can delete a entry in the list on the basis of invalidity. My client is therefore left in the position where we have an entry which is misconceived. We are entitled, we say, as a matter of a public law to be put in a position as if that entry had never been made. The judgment, we say, does not state that the Valuation Tribunal is in a position to recognise the invalidity of the alteration and effectively declare it of no effect. The Valuation Tribunal only has the power set out in regulation 4A. And therefore, we say, we cannot be put back in the position that we could have been put in by a successful Judicial Review and that means that, in the circumstances of this case, an application for Judicial Review on that matter was an appropriate course of action. Even if my Lord is against me on all of that, we say that the circumstances in which it is appropriate to apply for Judicial Review in the rate in context, and the circumstances in which these courts will intervene in respect of misconceived alterations, is of general interest and therefore there is a compelling reason why this matter ought to be considered by the Court of Appeal. My Lord, the listing officer has a duty to maintain the list. He sought to do so this way, in a way which was just wrong. We say that it is at least arguable, and certainly a matter of general interest, as to whether these courts will require the LO to comply with that duty. If the listing officer fails to declare, their actions are invalid and should be quashed. In those circumstances, my Lord, I ask for permission to appeal on that limited point. THE DEPUTY JUDGE: Mr Warren? MR WARREN: My Lord, again, I resist that application. Your Lordship's judgment is clear in paragraph 55 that ground 1 fails and an appeal has no reasonable prospect of success because of the wide ranging hours of the Valuation Tribunal in regulation 4A, that is a clear finding which is not unsettled by any reading of Anglian Water or Woodbury for, as your Lordship points out, they were both examples where the Valuation Tribunal can and has attempted to correct or put the ratepayer in both of those cases back in the same position within the statutory scheme and the VO submits that that is, in line with your Lordship's judgment, exactly what the Valuation Tribunal can do here. For that reason, there is no further compelling reason for any further stage of the Court of Appeal to consider this matter but that in the interests of the over riding objective this should proceed to the Valuation Tribunal. THE DEPUTY JUDGE: In terms of the wider significance, I am bound to say that it seems to me that this is not a case which would likely have arisen but for the cut-off date, 31st March last. The reality is likely to have been that matters would have taken their course in the Valuation Tribunal without anyone suggesting that it had no jurisdiction, if it found an error, to correct that error with whatever consequences followed and that therefore in a sense, the decision has a limited shelf life unless there are quite a number of cases in the pipeline arising from consequences of the 31st March cut-off date. I have no idea whether there are or not, but you may. MR WARREN: I do not have any instructions on that, my Lord, I apologise, I cannot assist. THE DEPUTY JUDGE: Otherwise what may be said is that my conclusion that on the proper interpretation of the 1993 regulations and in particular regulation 4A, one is talking about a curable defect rather than an annulity, which is the nub of the matter, may be said to be a conclusion of some general importance. MR WARREN: Insofar as it is a judgment on the facts of the case, it is restricted as a matter of fact to the terms of the particular case and whether something is an error of law, invalidity depends of course on whether the particular words disclose such an error when set against the factual context. THE DEPUTY JUDGE: Yes, but is it not a point that, if right, is applicable generally to cases where there is either a misdescription of the hereditament or an ambiguity in the description of the hereditament? MR WARREN: It is, but in my submission it is the kind of decision, wrong rather than void, which one comes across in the VO and ratepayers come across all the time. It does not in my submission add anything new to the law in this area. It is not, as it were, a novel legal principle which has emerged. It has been an application of long established principles as to invalidity and incorrectness and the grounds that one finds in the 1993 regulations are recastings of regulations for appeal which go back to the previous act, so this is a distinction that has been within the rating system for a very long time. THE DEPUTY JUDGE: But there has been no previous case, has there? Therefore this case might be regarded as authority on the question of whether a misdescription and/or ambiguity in the description of the hereditament gives rise to an incurable nullity or, as I have concluded, on the proper construction of the regulations something that is capable of being corrected in accordance with those regulations. MR WARREN: My Lord, I accept that it is an example of that distinction being drawn but it would be, in my submission, difficult to refer to this case or rely on it as establishing that principle. It is merely an example of a distinction being employed by the court. And so to that extent, taking it a stage further to the Court of Appeal would not be marching in the vanguard of the law in distinguishing between nullities and error in the list, merely applying the general law. So for that reason, I would resist the suggestion that this case carries with it a general principle which requires the case to go further. THE DEPUTY JUDGE: Thank you. Mr Forsdick? MR FORSDICK: My Lord, just a very short point: we say this case is a stark example of a clear misdescription on the fact of the document. The issue as to curable defect rather than nullity has not been considered by the higher courts. This case raises that issue starkly both in terms of the cut-off date and in terms of where one gets, where there is clear misdescription of the face of the document. In my submission, that is a matter which is worthy of consideration by the Court of Appeal. THE DEPUTY JUDGE: I refuse permission to appeal. It does seem to me that there are, in this case, a number of points of general public interest and importance. Not just the one in respect of which Mr Forsdick on behalf of the claimant has sought permission to appeal, but also other issues which, in the event of an appeal, might very well come to be canvassed. I nonetheless refuse permission to appeal because I, for my part, have no doubt as to the correctness of my conclusion in paragraph 55 of my judgment and I think before the Court of Appeal is troubled with the case, that court or a member of it should be persuaded that the point is sufficiently arguable to merit being reventilated in that forum, so I refuse permission for appeal. MR WARREN: My Lord, may I raise one further point? THE DEPUTY JUDGE: Yes. MR WARREN: It follows from the way that I have resisted the application for permission to appeal, as your Lordship has anticipated, there will be be a cross-appeal on the earlier point. THE DEPUTY JUDGE: On composite hereditament and quite possibly on 39 Hill Street? MR WARREN: Indeed. Not necessarily on 39 Hill Street, but certainly it follows that the earlier consideration in paragraphs 50 through 54 would have to be ventilated and simply to avoid any procedural difficulties later on, I flag the point before your Lordship that that would form part of a cross-appeal, were permission to be given by a single member of the Court of Appeal. I do say that simply to have that on the record, were there to be any suggestion that I should have made that point at this stage. THE DEPUTY JUDGE: Yes. Mr Forsdick? MR FORSDICK: Yes, of course My Lord, if notice of an application of permission to appeal is lodged with the Court of Appeal, then the Inland Revenue will be informed in the normal way and then obviously a cross-appeal would be pursued. My Lord, as in the previous case – THE DEPUTY JUDGE: You want 28 days? Do you have a problem with that, Mr Warren? MR WARREN: None. THE DEPUTY JUDGE: Very well. © 2001 Crown Copyright BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII