Case No: CO/10761/2013
Neutral Citation Number: [2014] EWHC 237 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 11/02/2014

Before:

THE HON. MR JUSTICE POPPLEWELL
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Between:

	Ms Charlotte Corkish (Listing Officer)	Appellant	
			
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	(1)	Dr Andrew Wright 
(2)	Ms Stacy Hart	Respondents	

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Ms Galina Ward  (instructed by Solicitor for HMRC) for the Appellant
The Respondents in person

Hearing date: 6 February 2014
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Judgment
The Hon. Mr Justice Popplewell : 
Introduction
1.	This is a statutory appeal by the Appellant listing officer (the “LO”) against the decision of the Valuation Tribunal for England (“the Tribunal”) dated 10 July 2013.  The Tribunal allowed an appeal from the LO’s decision that the annex at the Respondents’ property at 20 Shakespeare Road, Basingstoke, Hampshire was a self-contained unit, so as to be amenable to a separate charge for council tax.
2.	20 Shakespeare Road is a three storey mid-terrace split level town house.  Prior to the Respondents’ occupation the garage was converted into accommodation.  It comprises a single room of living area measuring either 11.6 or 12.7 square metres (the parties differ on the measurements).  The room has a kitchen work surface with sink and storage cupboards and a fridge below.   It has no cooking facilities.  There is an adjacent w/c and shower room.  The annex has no separate public access; access is through a door in the main hallway of the house.     It is used by the Respondents as an extension to their living arrangements in conjunction with the main house.
The Law
3.	Under the Local Government Finance Act 1992, council tax is levied on a dwelling.  Article 3 of The Council Tax (Chargeable Dwellings) Order 1992 (SI 1992 Number 549) provides that each self-contained unit within a single property is to be treated as a separate dwelling for these purposes.  A self contained unit is defined in article 2 of the Order:
“ “self-contained unit” means a building or part of a building which has been constructed or adapted for use as separate living accommodation.”
4.	The issue for the Tribunal was therefore whether the annex was part of a building which was constructed or adapted for use as separate living accommodation. 
5.	I was referred to a number of authorities bearing on this test and the factors which can or cannot be taken into account, including Hayes v Humberside Valuation Tribunal and Kingston upon Hull City Council [1998] RA 37 (Court of Appeal); Beasley (LO) v National Council of YMCAs [2000] RA 429 (Sullivan J); McColl v Subacchi (LO) [2001] RA 342 (Sir Christopher Bellamy); Clement (LO) v Bryant and Others [2003] RA 133 (Sullivan J); Coleman (LO) v Rotsztein [2003] RA 152 (Sullivan J); Williams (LO) v The Royal National Institute for the Blind and Others [2003] EWHC 1308 (Admin) (Mitting J); Jorgensen (LO) v Gomperts [2006] RA 300 (Kenneth Parker QC as he then was); and Daniels (LO) v Aristides [2006] EWHC 3052 (Admin) (Davis J).  I derive the following principles which are of relevance to the current appeal:
(1)	The question is whether the effect of the construction or adaptation is such as to make the relevant building or part of a building reasonably suitable for use as separate living accommodation.  I prefer the expression “reasonably suitable” for such use to “capable” of such use, because it makes clear that what matters is its fitness for that purpose by reference to contemporary standards of what is reasonable, not merely whether it might conceivably be used for such purpose however remote the possibility.
(2)	The question is to be answered by reference to the physical characteristics of the building.  This is sometimes referred to as a “bricks and mortar test”, but the epithet does not accurately capture the wide range of physical characteristics which may be of relevance including services and fixtures.   
(3)	This is an objective test.  The test is not concerned with when, how or why those characteristics were achieved.  The purpose of the construction or adaptation is irrelevant.  The test is addressed to the result of the building work, not the circumstances in which it was carried out.  Intention is irrelevant.
(4)	Whether the test is met is a matter of fact and degree for the tribunal.
(5)	There is a divergence in the authorities as to whether the actual use to which the building has been or is being put is capable of being a relevant consideration.  The decision attaches to the dwelling through changes of ownership and use, such that actual use at any given time will rarely help to inform the result of applying an objective test based on the physical characteristics of the building.  I prefer the view that actual use may in some cases be of some relevance.  If, for example, the part of the property has in fact been used, or is being used, for occupation by persons who do not form part of a single household with those who occupy the remainder of the property, that may be a factor which supports a conclusion that its physical characteristics make it suitable for such occupation.   However actual use is not the test, and even in cases where it may be of some relevance it will not usually be a factor of significant weight.  At most it may reinforce a decision reached by reference to the physical characteristics of the building.  
(6)	If what is being considered is part of a building, the physical characteristics to be considered include those of the remainder of the building as well as the part being considered.  Access is one aspect of such characteristics.  Separate public access may be a pointer to the part being separate living accommodation; whereas if access is through the remainder of the building this may tell against the part being separate living accommodation.  In the latter case different weight may be attached where access is through the living areas of the remainder of the building from the weight to be attached where it is through a hallway.  But access is not a factor which can be determinative without considering the other physical aspects of the building.  The weight to be attached to it is a matter for the tribunal.  
6.	An appeal to this court lies on a point of law only, under Regulation 43 of the Valuation Tribunal for England (Council Tax and non-domestic rating appeals) (procedure) Regulations 2009.   As Sullivan J said in Clement at paragraph 5: 
“Whether or not a particular unit of accommodation is or is not self-contained is a question of fact for the tribunal.  Normally the court would not interfere with the tribunal’s judgment provided – and it is an important proviso – it is clear from the tribunal’s reasoning that it has correctly directed itself as a matter of law.”
7.	In this case the LO submits that the Tribunal misdirected itself in law and did not apply the correct legal test.  
The Decision
8.	The Decision was structured to record the LO’s submissions, then those of the Respondents, followed by a section headed “Decision and Reasons.”  At paragraph 15 the Tribunal recorded the LO’s submission that the test was not how the annex was used, but what was physically there, a bricks and mortar test required by Jorgensen.  At paragraphs 21 to 29 the Tribunal recorded the Respondents’ submissions, including their reliance on three factors in particular as telling against the annex being for use as separate living accommodation.  They were that (1) it does not have cooking facilities and does not provide a clearly defined kitchen area in which a main meal could be prepared; (2) access was through the house; and (3) the extremely limited floor area meant that there was insufficient space to provide the basic requirements for independent living. 
9.	The Tribunal’s reasons for its conclusion are contained in paragraphs 32 to 35, under the heading Decision and Reasons, in the following terms:
“32. Whilst the converted garage had elements which might normally deem it to be a self contained unit of accommodation or a separate dwelling there was the only the one access (sic) which was via the front door of the main house and through a hallway of the main house.
33. The Panel considered the High Court decision of Jorgensen (LO) v Gomperts RA 2006 300 in which it was held that it was the intention of the extension and not how it was currently used.  The intention was unknown as it had been converted by a previous owner.  However the Panel took account of the fact that the appellants use the converted garage as an extension to their living arrangements in conjunction with the main house.
34. The Panel considered the cases in Batty (LO) v Merrirnan (1995) RA 299 and McColl v Subacchi LO (2001) RA 342 where the issue of access had been addressed.  If access to the room was via a hallway, stairs and landing then a separate hereditament or self contained unit of accommodation could be established as there was no access via liveable rooms as per McColl v Subacchi LO (2001) RA 342 and in the decision of Batty (LO) v Merriman (1995) RA 299 the issue of access through liveable rooms such as a lounge and dining room had been considered.  As a result of that decision where access was via a liveable room then it was considered that it was not separate living accommodation.
35. The Panel noted that the access to the converted garage was via a hallway. However it considered that the garage had been converted to enhance the living space in the main house and enhance its value, rather than create a separate self contained unit. Therefore the entry in the Valuation List for Annexe at 20 Shakespeare Road, Basingstoke, Hampshire RG24 9DH should be deleted.”
Submissions
10.	On behalf of the LO Ms Ward submitted that the Tribunal stated and applied the wrong test.  Paragraph 33 erroneously stated the test as turning on the intention with which the annex had been created.  The decision nowhere identified that the tribunal was applying the correct test of objectively assessing the physical characteristics of the building.  It is implicit in paragraph 32 that it was not, because it found that the annex had the elements which would normally deem it to be a self-contained unit of accommodation or separate dwelling.   The only factors identified for supporting the conclusion reached were the actual use to which the annex was being put and the access arrangement.  The former is of no weight, and the latter incapable of being determinative.  In summary, it was impossible to tell from the terms of the decision what physical characteristics rendered the annex unsuitable as separate living accommodation.
11.	On behalf of the Respondents, Ms Hart made a number of concise and elegant submissions.  Without doing them full justice, I hope they may be encapsulated in the following summary.  Something has plainly gone wrong with the wording of the first sentence of paragraph 33 in which the Tribunal purported to state the effect of Jorgensen as mandating a consideration of intention.  That is clear from its ungrammatical form; from its apparent rejection of the relevance of actual use which is inconsistent with the third sentence in which the Tribunal takes account of actual use; and from the fact that the objective test was never in dispute at the hearing, it being common ground that Jorgensen correctly held that intention was irrelevant.   It is therefore likely to be a clerical word processing error of some kind.  Once that sentence is put to one side, there is no reason to think that the Tribunal applied the wrong test.  It would be illogical to conclude that the Tribunal applied a different test from that which both sides agreed to be the correct one, which it recorded correctly when setting out the LO’s submissions at paragraph 15.  Its conclusion in paragraph 35, that the garage had been converted to enhance the living space and enhance its value, is to be read as a finding of the effect of the conversion.  That applied the right test and was a conclusion which was open to the Tribunal on the evidence.  The Tribunal was entitled to rely on the actual use of the annex, and the access arrangements, as relevant factors.  It had not treated either of them as determinative.   The reference to intention in paragraph 33 had in any event played no part in the decision because it was recorded that the intention was unknown.  
Conclusions
12.	 Decisions of lay administrative tribunals should be interpreted with a degree of benevolence (see e.g. R (Siborurema) v Office for the Independent Adjudicator [2007] EWCA Civ 1365 [2008] ELR 209 at [79]).  Such decisions should not be construed as if they were statutes or court judgments, nor subjected to pedantic exegesis (see Osmani v Camden LBC [2005] HLR 325 at [38(9)] per Auld LJ).  
13.	In my view the material before the Tribunal would have entitled it to conclude that the annex was not a self-contained unit by reference to its physical characteristics, including in particular its size and cooking facilities as well as the access arrangements.  But I am unable to accept that the Tribunal reached its conclusion on that basis, or that it applied the correct legal test by reference to the physical characteristics of the building, even on the most benevolent approach permissible.  It is impossible to ignore the first sentence of paragraph 33.  The next sentence goes on to address intention, which suggests that the Panel did consider that to be the relevant test, and the inconsistency between the first and third sentences can only be resolved if the reference to actual use in the third sentence was being treated as a proxy for the intended use.  Paragraph 35 is consistent with a test of subjective intention being applied in the words “to enhance”.   
14.	Even were it permissible to ignore the first sentence of paragraph 33, it still appears that the Tribunal did not apply the correct test.  The decision does not set out the correct test.  Nor do its terms as a whole suggest that the correct test was being applied sub silentio.  Even ignoring the first two sentences of paragraph 33, the reverse is the case.  The Reasons section does not mention two of the three physical characteristics which were being relied on as telling against suitability as separate living accommodation, namely the absence of cooking facilities and size.  Paragraph 32 failed to identify what were the elements which would normally deem the building to be a self-contained unit, or to identify any which might point the other way.  The only two factors identified as supporting the decision were the actual use to which the annex was being put, and the access arrangements.  The former is of no weight, and the latter incapable of being determinative.  It is impossible to tell from the terms of the decision what physical characteristics the Tribunal thought rendered the annex unsuitable as separate living accommodation, which strongly suggests that the Tribunal was not applying a physical characteristics test. 
15.	Accordingly the decision must be quashed.  Ms Ward argued that the court could substitute a decision in favour of the LO because the Tribunal had found in paragraph 32 that the annex had all the elements which would normally deem it to be a separate self-contained unit.  I cannot accept that argument, which involves reading paragraph 32 as if it said “all the elements” whereas it merely refers to “elements”, which more naturally means some elements.  
16.	The matter will therefore be remitted for reconsideration by the Tribunal in the light of this judgment.  I will hear argument on whether that should be before a differently constituted panel.