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You are here: BAILII >> Databases >> England and Wales Lands Tribunal >> Truro College Haven, Re [2007] EWLands RA_74_2005 (10 April 2007) URL: https://www.bailii.org/ew/cases/EWLands/2007/RA_74_2005.html Cite as: [2007] EWLands RA_74_2005 |
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Truro College Haven, Re [2007] EWLands RA_74_2005 (10 April 2007)
RA/74/2005
LANDS TRIBUNAL ACT 1949
RATING — College premises — open learning centre — mode and category of occupation distinguished from office use — contractor's basis of valuation rejected — comparative rental basis preferred — appeal allowed
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE CORNWALL VALUATION TRIBUNAL
by
JOHN ERIC REEVES
(Valuation Officer)
Re: Truro College Haven House Quay Street Truro Cornwall TR11HE
Before: A J Trott FRICS
Sitting at Procession House, 110 New Bridge Street, London EC4V 6JL
On 13 December 2006
Timothy Buley instructed by the Solicitor's Office, HM Revenue & Customs, for the appellant The ratepayer did not respond to the appeal
The following cases are referred to in this decision:
Scottish and Newcastle Retail Limited v Williams (VO) [2000] 2 EGLR 1711
Williams (VO) v Scottish and Newcastle Retail Limited [2001] 1 EGLR 157
Robinson Brothers (Brewers) Limited v Houghton and Chester-le-Street Assessment Committee
[1937] 2 KB 445
Leeds University v City of Leeds and Burge (VO) [1962] RA 177
John Townend (Trading as John's Radio) and Terence John Goodall (VO) (2005) Lands Tribunal,
RA/48/2004
Fir Mill Limited v Royton Urban District Council (1960) 7 RRC 171
LTE v Croydon LBC and Phillips (VO) [1974] RA 225
Garton v Hunter (VO) [1969] 2 QB 37
Lotus and Delta Limited v Culverwell (VO) and Leicester City Council [1976] RA 141
DECISION
Introduction
Facts
Rating history of the appeal hereditament
The decision of the Valuation Tribunal
The Issues
(i) The mode or category of occupation of the appeal hereditament.
(ii) Whether the contractor's basis should be used to value all colleges.
(iii) Whether the evidence of the rent passing on the appeal hereditament is tainted and of no weight.
(iv) Whether evidence of rents and settled assessments from hereditaments in the same and/or different modes or categories of occupation should be considered.
Evidence
(a) Category A: Contractor's Basis Hereditaments – All those hereditaments consisting of purpose-built and other adapted buildings occupied by a Higher Education Institution (HEI) and for which as a hereditament an HEI was the only possible hypothetical tenant because of rebus sic stantibus or planning restrictions. HEI centres, complexes and campuses fell into this category.
(b) Category B: HEI Living Accommodation – not relevant in this appeal.
(c) Category C: Miscellaneous Hereditaments – All other non-domestic or composite hereditaments occupied by HEIs where a rental method of valuation was appropriate.
Submissions
"(2) Where the particular hereditament is let at what is plainly a rack rent or where similar hereditaments in similar economic sites are so let, so that they are truly comparable, that evidence is the best evidence, and for that reason is alone admissible; indirect evidence is excluded not because it is not logically relevant to the economic enquiry, but because it is not the best evidence."
Conclusions: rebus sic stantibus
"Truro College Open Learning Centres are places where you can learn at a time, place and pace to suit. They are places to learn new skills, find help for advice and guidance about jobs and improving career prospects. You don't need qualifications in most cases and there are no entry tests to complete. All you need is to want to learn: we are there to help. We will support and encourage you to progress in your everyday life or work. Open Learning Centres are relevant to you ....
The team have proven experience of enabling people to overcome barriers to learning, such as disability, dyslexia, child care, travel problems and benefit issues.
Whether you are in work or out of it they will help you make choices and move on."
Open learning centres are less structured and formal in their mode of operation than are HEIs or colleges of further education (at the material day Truro College also offered further education courses at its main college campus). Haven House was an open, accessible and less intimidating learning environment for those adults who wished to further their education and opportunities. At the material day Haven House contained classrooms, a library/resources centre, an IT training suite, a kitchen/refectory, a dark room, a staff room and ancillary offices and stores. It did not have a lecture hall.
"[The second assumption] is that the mode or category of occupation by the hypothetical tenant must be conceived as the same mode or category as that of the actual occupier. A dwellinghouse must be assessed as a dwellinghouse; a shop as a shop, but not as any particular kind of shop; a factory as a factory, but not as any particular kind of factory."
Walker LJ said at 164H that:
"I would certainly not treat that [the formulation in Fir Mill] as a statutory text. But Parliament's adoption of the expression 'mode or category of occupation' must be taken as recognising that the formulation in Fir Mill is on the right lines, even if its precise scope has to be worked out on a case-by-case basis."
"While it is perfectly true that the Town and Country Planning Use Classes Order under the Town Planning Acts is a modern innovation compared with the age of rating law, it has stood of course now for many years as a generalisation. We think it is a useful guide – but we put it no higher – in deciding what other uses can be taken into account."
Conclusions: The contractor's basis of valuation
".... the method of valuation may follow naturally. In this case, comparable office rents are interesting only insofar as they illustrate how large a departure from the real world is taken by giving force to the statutory expression of 'mode or category of occupation'"
The VT concluded that, as a college, and to be consistent with the valuation of other such hereditaments, Haven House should be valued on the "college basis" which it took to be the contractor's basis. It said in its decision that:
"The 'horse' of 'user' [college] and the 'cart' of 'method of valuation' [contractor's basis] commonly applied by rating surveyors are in this instance harnessed together."
"The principle of uniformity also commands ready agreement, so far as fairness generally requires comparable properties to be valued by the same yardstick (but that does not make one single method of valuation uniquely appropriate, as a matter of law, for a particular type of hereditament: see Garton v Hunter (VO) [1969] 2 QB 37, a case about a caravan site)."
Furthermore this Tribunal (P R Francis FRICS) stated in John Townend (Trading as John's Radio) and Terence John Goodall (VO), at paragraph 27:
"Mr Goodall's contention is that the description in the list is determinative of the way the hereditament is to be valued rebus sic stantibus in terms of its use; but there is nothing in the statute or the regulations to this effect. Under the Local Government Finance Act 1988 s 42(4) the rating list must show the rateable value of a hereditament. Under the Non-Domestic Rating (Miscellaneous Provisions) Regulations 1989 reg 2(a) the list must contain a description of the hereditament. There is, however, nothing to suggest that the description shown has any other purpose than that of identification. I can see no reason why it should be determinative of the way the hereditament is to be valued rebus sic stantibus in terms of its use."
"In the absence of any rental evidence for this class, the contractor's basis should be adopted."
As Mr Buley pointed out such guidance was consistent with the decision of this Tribunal in Leeds University v Leeds City Council and Burge (VO) at 189:
"We agree that satisfactory rental evidence, if available, should be used in preference to other methods of arriving at gross value."
In my opinion there is nothing to justify the VT's insistence that the contractor's basis is, of necessity, the only valuation method that can be used to value a college.
Conclusions: The rent paid for the appeal hereditament
"Nowadays we do not confine ourselves to the best evidence. We admit all relevant evidence. The goodness or badness of it goes only to weight and not to admissibility. So I fear that Scott LJ was in error."
The contractor's basis is not excluded as evidence but the weight attached to it will depend upon the availability of other relevant evidence.
"In the light of the authorities, I think the following propositions are now established:
(i) Where the hereditament which is the subject of consideration is actually let that rent should be taken as the starting point.
(ii) The more closely the circumstances under which the rent is agreed both as to time, subject matter and conditions relate to the statutory requirements .... the more weight should be attached to it."
".... I have been unable to obtain all the necessary background information. Therefore the following is a combination of some brief correspondence in an archive file and my recollection of events .... I cannot guarantee the accuracy."
With respect to the sublease Mr Kelly stated:
"The sub-lease from BT to Truro College was dated 28/7/95 and was for a term of circa 6 years (15/8/94 to 14/7/2000). This lease was FRI as far as I am aware and there was a review in 1998 to market rent (£80,000 per annum)."
".... it may reasonably be inferred that it was paid as part of a more complex transaction by which in time Truro College became sole occupiers and owners of the freehold with, as Mr Stone fairly pointed out, some considerable financial assistance from British Telecom, who were seeking to relinquish their lease of Haven House as office premises."
Conclusions: Evidence of rents and settled assessments
"Any evidence relating to the rents or assessments of other hereditaments may be taken into account provided it is relevant to the valuation. There is no rule that evidence relating to another hereditament is irrelevant if that other hereditament is in a different mode or category of occupation."
Mr Stone sought to show that although Haven House was used as an open learning centre its accommodation and layout were very similar to that when it was formerly occupied as an office. Since most hereditaments that were physically similar to Haven House in this locality were used as offices he considered that evidence of office rents would demonstrate the rental value of such a building. He argued that the rent actually paid for Haven House as an open learning centre (which I have found to be in a different mode or category of occupation to an office) was in line with office rents for similar buildings and that therefore the ratepayer was a willing tenant within the office rentals market.
Conclusions: Valuation
Dated 10 April 2007
A J Trott FRICS Member