Boffey v Dyer (LO)

Council tax – Liability – hereditament – Appeal – Appellant owning domestic property subject to council tax – Appellant challenging refusal of respondent listing officer to de-list property – Valuation Tribunal for England striking out appeal – Appellant appealing – Whether VTE president having power to strike out appeal on own initiative without hearing – Whether property failing to meet definition of “hereditament” for council tax purposes – Appeal dismissed In 2018, the appellant purchased a Grade II listed detached Queen Anne house, in Petersham, between Richmond Park and the River Thames. The property had been entered into the council tax list at Band H on 1 April 1993. In April 2023, the appellant challenged his liability to pay council tax, and sought to de-list the property from the tax roll, effective from 2018 when he started paying the tax. The appellant contended that the property failed to meet the definition of “hereditament” for council tax purposes because he owned the property absolutely, it was only used for his family’s private accommodation and he had not sought permission to retain rents as a licenced provider. The proposal was rejected by the respondent listing officer and the appellant appealed to the Valuation Tribunal for England pursuant to regulation 10 of the Council Tax (Alteration of Lists and Appeals) (England) Regulations 2009. The appellant applied for the matter to be treated as a complex case within PS3 of the VTE’s Consolidated Practice Statement, on the basis that the appeal raised a novel, important or contentious point of law with national implications. The respondent objected on the basis that the point had already been considered and determined in Doyle v Roberts (VO) [2021] EWHC 659. The VTE president struck out the appeal on the basis that it had no reasonable prospect of success and it was in the interests of justice to do so. Held: The appeal was dismissed. (1) The president of the VTE had the express power to strike out the appeal on his own initiative and without a hearing, providing that pursuant to regulation 10(4) of the CT Regulations he afforded the appellant the opportunity to make representations, which he did. There was no error of procedure. The president also correctly directed himself as to the appropriate test to apply on an application to strike out. The court was afforded a wide discretion in the context of case management decisions and, accordingly, a party seeking to overturn such a decision had to overcome a high threshold. The ambit of discretion entrusted to the judge was generous. An appellate court would only interfere with a discretionary evaluation where an appellant could identify one or more of the following errors: (i) a misdirection in law; (i) some procedural unfairness or irregularity; (iii) that the judge took into account irrelevant matters; (iv) that the judge failed to take account of relevant matters; or (v) that the judge made a decision which was “plainly wrong”: Azam v University Hospital Birmingham NHS Foundation Trust [2020] EWHC 3384 followed. (2) The appellant accepted that he was person liable to pay council tax within section 6(2)(a) of the Local Government Finance Act 1992 as “resident of the dwelling with a freehold interest in the whole or any part of it”. However, he argued that the property was not a “dwelling” under section 3(2) of the 1992 Act (and not a ‘chargeable dwelling under section 6(1)) because: it was not a hereditament for the purposes of the General Rate Act 1967, which implied a financial interest in the property beyond mere occupation; it was not rateable or chargeable because: where no permission to rent a property had been granted by the local authority, the property fell outside the “tax net” of the regulatory bodies; and/or there was no “beneficial occupation” of the property where it was not being used for some financial benefit. Beneficial occupation did not include using one’s own domestic property wholly for the purposes of living accommodation; and domestic property within section 66(1) of the Local Government Finance Act 1988 was not a dwelling. (3) The appellant had pressed upon the court the same conclusion as that contended for, and rejected, in Doyle, which dealt with materially similar facts. In Doyle the judge found in terms, that a unit of property used wholly for the purposes of living accommodation attracted council tax by reference to that use. That was true not only of a flat or house which was rented from a private landlord, but also of a flat or house with an owner-occupier.  They could all be hereditaments. Although that decision was not binding the court in the present case, it was correctly decided. (4) At the heart of the appellant’s argument was the submission that by deciding to use the word “hereditament” by reference to the 1967 Act, the word had become imbued with the necessary characteristics of a hereditament which was, itself, rateable under the 1967 Act. However, there was nothing in the 1967 Act which indicated that the general rate provisions were limited to a context in which the property was used for a financial gain (a “business” context).  It was wrong to say that a conventional dwelling (a privately-owned house or flat, occupied for the purposes of living accommodation with no element of financial reward or benefit) fell outside the scope of “hereditament” under section 115(1): Woolway (VO) v Mazars [2015] EGLR 56 considered. Nor was schedule 13 to the 1967 Act to be used to curtail the ordinary meaning of a “dwelling-house” from extending to include a standard, privately-owned house used for the purposes of living accommodation. Schedule 13 was obviously dealing with special or marginal cases (such as the letting of rooms), not for providing an exhaustive checklist to define what constituted a “dwelling-house”. (5) Neither the concept of “occupation” nor of “beneficial occupation” were relevant to the proper construction of “dwelling” under the 1992 Act. In any event, the concept of beneficial occupation was not a phrase that imported the need for a tangible financial benefit to derive from occupation. Thus, even if the phrase were relevant to the construction of the 1992 Act, in the context of a wholly domestic property, “beneficial occupation” might be derived from simply the domestic occupation of the property. (6) Accordingly, the president was correct to conclude that, as a matter of law, the appeal against the respondent’s refusal to delist the property stood no real prospect of success. Having formed that view, he was well within his case management powers to exercise the right to strike out the appeal without a hearing and right to do so.   The appellant appeared in person; Gareth Rhys (instructed by HMRC Legal Group) appeared for the respondent. Eileen O’Grady, barrister Click here to read a transcript of Boffey v Dyer (LO)