|
SECOND DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Justice Clerk
Lord Philip
Lord Kingarth
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[2006] CSIH 55
XA129/05
OPINION OF THE LORD JUSTICE
CLERK
in the Appeal by
THE ASSESSOR FOR GRAMPIAN
VALUATION JOINT BOARD
Appellant;
against
IAN FRASER
Respondent:
_______
|
For the appellant: Docherty, QC; Gillespie MacAndrew, WS
For the respondent: No
appearance
16 November 2006
Introduction
[1] This
is an appeal by the assessor for Grampian under section 82(4) of the Local
Government Finance Act 1992 against a decision of the Valuation Appeal
Committee for Moray dated 15
November 2005. It arises
from the assessor's decision to alter the Valuation List in relation to a house
at 81 Highfield, Forres by transferring it from valuation band C to band D with
effect from 10 August
2001. The former owner of
the house, Mr Ian Fraser, appealed to the Committee on the ground that the
alteration should have been made with effect from 30 November 2004. The Committee allowed the appeal and directed
that the alteration should have effect from the latter date.
The statutory framework
[2] Part II of
the Local Government Finance Act 1992 (the 1992 Act) imposes a liability to
Council tax in respect dwellings situated in each local authority area. The amount of the tax is based on the
allocation of the dwelling to one of eight bands of capital value determined as
at 1 April 1991 (Council Tax
(Valuation of Dwellings) (Scotland) Regulations 1992 (SI No 1329), r 2). The 1992 Act provides for the alteration of
the Valuation List by the assessor where, inter
alia, there has been a material
increase in the value of a dwelling and the dwelling, or any part of it, has
subsequently been sold (s 87(1), (4)).
For this purpose, a "material increase " in relation to the value of a
dwelling means
"any increase which is caused (in whole or in part)
by any building, engineering or other operation carried out in relation to the
dwelling, whether or not constituting development for which planning permission
is required ..." (s 87(10).
The Council Tax (Alteration of
Lists and Appeals) (Scotland)
Regulations 1993 (SI No 355) (the 1993 Regulations) provide, inter alia, as follows
"4-(1) No alteration shall be made of a valuation
band shown in the list as applicable to any dwelling unless-
(a) since
the valuation band was first shown in the list as applicable to the
dwelling-
(i) there
has been a material increase in the value of the dwelling
and it, or any part of it, has subsequently been
sold ...
19-(1) Any
alteration of the list effected so as to reflect a material increase in the
value of a dwelling shall have effect from the day on which the first sale of
the dwelling, or any part of it, subsequent to the material increase was
completed ... "
The facts
[3] In
1999-2000 the then owner, Mrs Pacitti, erected a conservatory at the
house. The house was then in valuation
band C. The work was completed in
January 2000. On 10 August 2001 Mrs
Pacitti sold the house to Mr Fraser. On 13 August 2001 Mrs
Pacitti applied for a building warrant completion certificate relating to the
work. On 28 August 2001 the certificate was granted.
In March
2002 the assessor inspected the house, having been notified, I assume, of the
grant of the completion certificate. He
concluded that it fell within valuation band D.
At that time the assessor understood that the conservatory had been
completed after the sale to Mr Fraser.
[4] On
30 November 2004 Mr Fraser
sold the house to Mr and Mrs Munoz. The
assessor then altered the Valuation List by placing the house in band D with
effect from that date. It is plain that
the assessor did this on the understanding that the sale to Mr and Mrs
Munoz was the first sale of the house after the building of the conservatory.
[5] Mr
and Mrs Munoz challenged the assessor's decision. On further investigation, it became clear to
the assessor that the conservatory had been completed before the sale to Mr
Fraser. He therefore altered the
Valuation List to show that the dwelling was in band D with effect from 10 August 2001.
The decision of the Committee
[6] The
Committee first considered when the material increase in value had
occurred. It considered three possible
dates, namely (1) a date some time in January 2000 when the alterations were
physically completed; (2) 28 August
2001, when the completion certificate was issued; and (3) 26 March 2002, when the assessor revalued the dwelling. It concluded that the date of physical
completion lacked specification and that it was therefore difficult to have
confidence in the assessor's contention that that was when the material
increase occurred. It considered that
even if the assessor had specified that date, it was the completion certificate
that represented the critical step in the completion of the works. The Committee, however, did not accept the
date of the certificate either. It
considered that the material date was the date on which the assessor revalued
the dwelling, namely 26 March
2002. These were its
reasons:
" ... the Committee's view is that only the Assessor
can determine whether and to what extent there has been a material increase in
value, bearing in mind the legislative parameters set for the Assessor. The only way the Assessor can do this is by
revaluing the dwelling. The new value
was only assessed when the Assessor's Office completed their revaluation on 26 March 2002 and accordingly the material increase in value was
only determined at that point.
Regulation 19 refers to any alteration of the list
effected so as to reflect a material increase in the value of a dwelling. The use of the word 'reflect' does not impart
the ability to view retrospectively and there is no evidence that Parliament
intended the provision to be retrospective."
[7] The
Committee found support for its view in a dictum
of Lord Hamilton in Ass for Grampian
Valuation Joint Board v Macdonald
(2002 SLT 817, at para [12]) to the effect that Parliament in enacting section
87(4) of the 1992 Act envisaged that regulations made under it would restrict
in particular ways the circumstances in which alterations might be made to the
Valuation List and, in particular, that a material increase in the valuation of
a dwelling would not of itself warrant the application of a higher band.
Conclusions
[8] In
my opinion, the Committee has misdirected itself. Its decision shows a confusion between the
event that causes the material increase in the value of a dwelling and the
subsequent events by which the occurrence of that increase comes to the notice
of the assessor. The assessor's duty to
alter the Valuation List arises from two events, namely the occurrence of the
material increase, as defined by section 87(10) of the 1992 Act, and the first
subsequent sale (1992 Act, s 87(4); 1993 Regs, r 4(1)). The alteration has to take effect from the
date of the first subsequent sale (1993 Regs, r 19(1)).
[9] On
the agreed facts, the material increase occurred in this case in January 2000
when the building operation was completed.
The lack of an exact date is neither here nor there. The first subsequent sale of the dwelling was
that by Mrs Pacitti to Mr Fraser. The
assessor was bound to alter the Valuation List with effect from the date of
that sale, and from no other date. The
fact that the assessor did not discover until much later the true date on which
the material increase occurred is irrelevant.
[10] I cannot understand why the Committee thought that regulation
19 could not operate retrospectively. The
assessor can alter the Valuation List only if there has been a sale, and only
if the sale has been preceded by the occurrence of a material increase in
value. It follows therefore that the
valuation exercise that the assessor has to carry out will inevitably be
retrospective in nature.
[11] The decision of the Committee is not supported by the dictum in Ass for Grampian Joint Valuation Board v Macdonald (supra) to which the Committee has
referred. The question in that case was
what constituted a subsequent sale. Lord
Hamilton's observation that the making of a material increase in value does not
of itself warrant the application of a higher band, but has effect only upon
the first subsequent sale of the dwelling gives no support to the Committee's
view.
Decision
[12] I propose that we should allow the appeal, recall the decision
complained of and remit the case to the Committee with a direction to it to
determine that the subjects were properly entered by the assessor in the
Valuation List at band D with effect from 10 August 2001.
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SECOND DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord Justice Clerk
Lord Philip
Lord Kingarth
|
[2006] CSIH 55
XA129/05
OPINION OF LORD PHILIP
in the Appeal by
THE ASSESSOR FOR GRAMPIAN
VALUATION JOINT BOARD
Appellant;
against
IAN FRASER
Respondent:
_______
|
For the appellant: Docherty, QC; Gillespie MacAndrew, WS
For the respondent: No appearance
16 November 2006
[13] I agree that the appeal should be allowed for the reasons set
out by your Lordship.
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SECOND DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord Justice Clerk
Lord Philip
Lord Kingarth
|
[2006] CSIH 55
XA129/05
OPINION OF LORD KINGARTH
in the Appeal by
THE ASSESSOR FOR GRAMPIAN
VALUATION JOINT BOARD
Appellant;
against
IAN FRASER
Respondent:
_______
|
For the appellant: Docherty, QC; Gillespie MacAndrew, WS
For the respondent: No
appearance
16 November 2006
[14] I agree with
your Lordship in the chair and have nothing to add.
