Bunyan (Listing Officer) v Patel

Council tax – Valuation list – Deletion – Valuation Tribunal allowing appeal by respondent property owner against decision of listing officer deleting entry in council tax valuation list for appeal property – Appellant listing officer appealing – Whether tribunal applying correct legal test in determining if property capable of beneficial occupation – Appeal allowed The property at 17 Mill Ridge, Edgware, HA8, was a 1930s three-bedroom semi-detached house. It had a gross external area of 103 sq m and was entered in the council tax valuation list as a band E dwelling on 1 April 1993. In July 2020, the respondent applied to the Valuation Office Agency (VOA) to delete the property from the council tax valuation list with effect from 28 August 2019 (the relevant date), when the property became unoccupied and was uninhabitable because of rising damp caused by the intrusion of weather. The application was rejected on the basis that a property was only uninhabitable for council tax purposes when it had deteriorated to the point when it was incapable of being made habitable again without large-scale works, often including substantial structural repairs and so was “beyond reasonable repair”. On the evidence, the works required to repair the property consisted of strip-out, dry-out and refurbishment works which were not so substantial as to warrant a deletion from the council tax list. The Valuation Tribunal found that the property was not capable of beneficial occupation at the relevant date. The appellant listing officer appealed to the High Court, pursuant to regulation 43 of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009, on the ground that the tribunal failed to apply the correct legal test as set out in Wilson v Coll (Listing Officer) [2011] EWHC 2824 (Admin); [2013] PLSCS 32. Held: The appeal was allowed. (1) Section 1 of the Local Government Finance Act 1992 established the duty for a billing authority to levy and collect council tax in respect of dwellings within its area. Under section 3, a dwelling was any property which, by virtue of the definition of hereditament in section 115(1) of the General Rate Act 1967, would have been a hereditament for the purposes of that Act if it remained in force. Section 115(1) of the 1967 Act materially provided that “hereditament” meant property which was or might become liable to a rate, being a unit of such property which was, or would fall to be, shown as a separate item in the valuation list. The tribunal correctly identified the issue in the appeal as whether or not, at the relevant date, a hereditament, and therefore a dwelling within the meaning of section 3(2)(a) of the 1992 Act, was in existence. The ingredients for rateable occupation were that there had to be actual occupation; exclusive for the particular purposes of the possessor; of some value or benefit to the possessor; and not be for too transient a period. In determining that issue, the tribunal was bound by earlier authorities on the essential elements of a hereditament, in particular, the element of beneficial occupation: John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area & others [1949] 1 KB 344 applied. Ravenseft Properties v Newham London Borough Council [1976] 1 EGLR 109 and Post Office v Nottingham City Council [1976] 2 EGLR 94 considered. (2) In Wilson v Coll, the court held that a hereditament would cease to exist for council tax purposes only if the property was “truly derelict”. The fact that a property was in need of repair was not sufficient, even if those repairs were expensive or uneconomic to perform. As a general matter of law, the key distinction was between, on the one hand, a property which would be capable of occupation for its intended purpose if a reasonable amount of repair work were undertaken, and on the other hand, a property which was truly derelict, and so required reconstruction or replacement in order to become capable of occupation for its intended purpose. It was only in the latter case that the element of beneficial occupation was not met, and so the hereditament had ceased to exist. That decision was directly applicable in the present case as it concerned council tax and disrepair. The test enunciated in Wilson v Coll was not limited to “derelict”, implying severely neglected properties. The question whether a building was incapable of beneficial occupation as a result of a programme of refurbishment was a matter of objective fact. A property might be incapable of beneficial occupation because it was currently undergoing major reconstruction works, or because major reconstruction works would be required before it could be occupied. Therefore, the respondent in this case was correct to concede that, once he decided to undertake major reconstruction works at the property in September 2020, the entry on the list should be deleted because the property was no longer capable of beneficial occupation: SJ & J Monk (A Firm) v Newbigin (VO) [2017] UKSC 14; [2017] EGLR 21 and Jackson (VO) v Canary Wharf Ltd [2019] UKUT 136 (LC); [2019] EGLR 31 applied. (3) Class A in article 3 of the Council Tax (Exempt Dwellings) Order 1992 provided a rateable exemption where a dwelling was vacant and required or was undergoing major repair work to render it habitable, which included structural repair work. Beyond the issue of economic repair, the Class A exemption played no part in the court’s analysis and conclusion on the test to be applied when determining whether a hereditament was still in existence, namely, whether a property is capable of being rendered suitable for occupation as a dwelling by undertaking a reasonable amount of repair works, or whether it is a truly derelict property, which required reconstruction or replacement to make it suitable for occupation as a dwelling. That test was consistent with the judgment of the Supreme Court in SJ Monk. Therefore, the abolition of the Class A exemption was not a valid reason for departing from Wilson v Coll. (4) The tribunal erred in not applying the test set out in Wilson v Coll. Instead, it applied a less stringent test, namely, whether “the property required major works to remedy the problems and make it fit for occupation as a dwelling”. If the tribunal had followed Wilson v Coll, as it was bound to do, it might well have reached a different conclusion on the facts of this case. The case would be remitted to a freshly constituted tribunal for re-determination. Isabel McArdle (instructed by HMRC Solicitor’s Office and Legal Services) appeared for the appellant; The respondent did not appear and was not represented. Eileen O’Grady, barrister Click here to read a transcript of Bunyan (Listing Officer) v Patel