UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2014] UKUT 0354 (LC)

Case Number: RA/64/2013

 

                         TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

 

RATING – costs –appeal against VTE decision – appeal withdrawn before hearing – Lands Chamber’s Simplified Procedure – whether appellant’s late withdrawal amounts to unreasonable behaviour – whether respondent VO entitled to wasted costs – held that it is not – Lands Chamber Practice Directions 2010

 

 

IN THE MATTER OF AN APPEAL AGAINST A DECISION

 OF THE VALUATION TRIBUNAL FOR ENGLAND

 

 

BETWEEN                    Total Fulfilment Logistics Ltd                   Appellant

                                                                             

 

                                                                           and

 

                                                                                                                                                      

                                                                   Paul May                                          Respondent

(Valuation Officer)

 

 

 

                                                    Re:    Unit 18 Hargreaves Road

                                                              Groundwell Industrial Estate

                                                              Swindon                                                                                SN25 5AY

                                                                    

 

                                                                             

 

                                                       Before P D McCrea FRICS

 

 

 

Decision on Written Representations

 

 

 

 

 

 

 

                                                                    DECISION

Introduction

1.             This short decision concerns whether an applicant’s withdrawal of an appeal shortly before a hearing date, but after receipt of the respondent’s statement of case and expert report amounts to unreasonable behaviour to the extent that the Tribunal should depart from its normal position in relation to costs under the Simplified Procedure.

Brief history

2.             On 29 October 2013 the appellant, via its agent Mr Sam Walters MRICS of Altus Edwin Hill, gave notice to the Tribunal of its appeal against a decision of the Valuation Tribunal for England dated 1 October 2013 in respect of Unit 18, Hargreaves Road, Groundwell Industrial Estate, Swindon, SN25 5AY (in which an appeal against the rateable value of that property was dismissed).  The Tribunal’s standard form RA was submitted, within which the appellant requested the Tribunal’s Simplified Procedure on the basis that “the legals (sic) issues are not complex and there are no issues of substantial conflict involved”.  A statement of case was attached, including a copy of the VTE decision and supporting comparable evidence.

3.             On behalf of the respondent Valuation Officer (VO), Mr SJ Hickman TD, BSc, MRICS submitted the Respondent’s Notice using the Tribunal’s standard form RARN dated 3 December 2013, within which the respondent agreed with the appellant that “this case is suitable for the Simplified Procedure”.  Following an extension of time, on 19 February 2014 the respondent filed and served its statement of case.

4.             On 12 March 2014 the Tribunal confirmed to the parties that the appeal would proceed under the Simplified Procedure, and listed the appeal to be heard before me on 13 June 2014.  The Registrar directed that expert reports should be filed and served not less than 14 days before that date.

5.             On 27 May 2014 the respondent submitted its expert evidence to the Tribunal and confirmed that a copy had been sent to Mr Walters.

6.             On 29 May 2014 Mr Walters emailed the Tribunal to say that he was instructed to withdraw the appeal.  Whilst he didn’t agree with the VTE decision, he indicated that his client “cannot afford the costs and risk attached in pursuing the case further to a full Upper Tribunal hearing”.

7.             The respondent VO indicated by email on 30 May 2014 that it would only agree to the withdrawal of the case if the appellant met its abortive costs of £2,700.  This was confirmed in a letter to the appellant by Mr Little of HMRC’s Solicitor’s Office, to whom the matter had been transferred.

8.             On 10 June 2014, with the hearing date pressing, I gave consent to the withdrawal of the claim under Rule 20(2) of the Tribunal’s Procedure Rules 2010, in order to avoid the parties incurring further cost.  However, this consent was subject to further representations on costs, and I requested the appellant’s response to the respondent’s submission by 18 June 2014.  No response was received, either by then or indeed to date.

The Respondent’s Submission

9.             On behalf of the respondent, Mr Little submits that the appellant should be responsible for the VO’s costs of drafting his expert’s report – over 30 hours at £90.00 per hour, therefore £2,700.  In essence, his case is that:

a)      On 27 May 2014 the VO sent its statement of case to Mr Walters.  Mr Walters sought to withdraw the appeal two days later. All of the information and relevant legal argument set out in the expert report was already in its statement of case, sent to Mr Walters on 20 February.  Mr Walters had ample opportunity to discuss the case with the VO, but did not do so.

b)     On 23 May 2014, Mr Walters asked whether the VO intended to attend the hearing.  He waited until after the VO had served its statement of case before withdrawing the appeal.  The VO considers that from 20 February Mr Walters was in a position to advise his clients to withdraw.

c)      The appellant lost the case “hands down” at the VTE, and Mr Walters did not commit himself to provide an expert report on behalf of his client.  The statement of case that was attached to the Notice of appeal was little more than a copy of his submissions to the VTE.

d)     There was no meaningful attempt by Mr Walters to discuss the case.  Instead, he preferred to wait and see what was in the VO’s report before advising his client to withdraw.  This amounts to unreasonable behaviour within the meaning of para 12.8 of the Tribunal’s Practice Directions and in the circumstances the VO seeks a contribution towards his costs.

e)      The VO did not object to the appeal being held under the Simplified Procedure, on the basis that there was no substantial issue of law or valuation practice at issue between the parties.  Under the Simplified Procedure the parties have a positive obligation to co-operate to minimise costs.  The procedure is not intended to be a vehicle for litigating rating disputes where claimants can bring unmeritorious claims, capable of negotiation rather than peremptory withdrawal shortly before the hearing.  Given that the stated objective of the Simplified Procedure is to reduce the cost of litigating, this procedure does not provide insurance against an adverse costs order where a party behaves in such a way that costs are unnecessarily or unreasonably incurred.

10.         As I indicated above, no response or submissions on costs have been made on behalf of the appellant.

Discussion

11.         It is useful at this point to refer to the Tribunal’s Practice Directions (November 2010);

“3.3. Simplified Procedure

 

1) The Simplified Procedure provides for the speedy and economical determination of cases in which no substantial issue of law or of valuation practice or conflict of fact is likely to arise. It is often suitable where the amount at stake is small. It will not normally be appropriate for cases involving more than one expert witness.

 

2) The objective is to move to a hearing as quickly as possible and with the minimum of formality and cost. In most cases a date for the hearing, normally about 3 months ahead, will be fixed immediately. Statements of case will be required in accordance with section 6 below. The hearing will be informal and strict rules of evidence will not apply. It will almost always be completed in a single day.

 

3) Not later than 1 month before the hearing, the parties must exchange copies of all documents on which they intend to rely. Not later than 14 days before the hearing each party must file and exchange—

 

(i) an expert’s report, if they intend to rely on expert evidence;

and

(ii) a list of the witnesses they intend to call at the hearing.

 

4) ….. no costs order will be made unless the Tribunal—

 

(i) considers it appropriate to take the making of an offer of settlement by a party into account;

 

(ii) regards the circumstances as exceptional; or

 

(iii) considers a wasted costs order should be made.

 

If an award of costs is made, the amount will not exceed the amount that would be allowed in proceedings in a county court.”

 

and

 

“12.8. Simplified and written representations procedure

 

Where proceedings are determined in accordance with the Simplified Procedure… costs will only be awarded if there has been an unreasonable failure on the part of the claimant to accept an offer to settle, or if either party has behaved otherwise unreasonably, or the circumstances are in some other respect exceptional.”

 

 

12.         The VO asserts that the appellant’s lack of communication and attempted withdrawal at the eleventh hour amounts to unreasonable behaviour.  I accept that there was a lack of courtesy, including to the Tribunal, but in assessing whether there was unreasonable behaviour I have considered the alternative open to the appellant.  Had Mr Walters appeared at the hearing, there is nothing to suggest that costs would have been awarded against the appellant, even had the VO been wholly successful on the substantive issue.  The VO would, in all likelihood, not have recouped the costs of the preparation of his expert report. In fact, by withdrawing the case the appellant had saved costs both for themselves and the respondent.

13.         Additionally the suggestion that the whole of the VO’s case was contained in its statement of case served on 19 February and that nothing of substance was added to that case by the evidence served on 27 May is not easy to reconcile with the claim that 30 hours were spent preparing that report after completion of the statement of case.

14.         Accordingly I see no reason to depart from the normal position under the Simplified Procedure, and I make no order for costs.

15.         However, I would conclude by emphasising that under its Simplified Procedure the Tribunal does expect the parties to co-operate with each other, and with the Tribunal, as openly and promptly as possible in order to avoid wasted costs. The application for withdrawal of a case should be made as early as possible, both for the parties’ benefit and in order that judicial resources can be reallocated.  The Tribunal will consider applications for wasted costs where it considers that one of the grounds in the Practice Statement has been met, and it is open at any time to the Tribunal to transfer a case to the Standard Procedure where it considers the Simplified Procedure is being abused.

                                                                                                Dated 7 August 2014

                                                                                                P D McCrea FRICS