On appeal from: [2018] EWCA Civ 26

This appeal considered whether regard should be given, when ascertaining the rateable value of a property under the statutory hypothesis in the Local Government Finance Act 1988, Sch 6, para 2(1), to general demand for comparable properties in the market. It also considered what the relevance is, if any, to the ascertainment of rateable value under the statutory hypothesis, of the absence of an actual prospective tenant who would pay a positive price in order to occupy the property at the valuation date.

The Supreme Court allowed the appeal by a majority of three to two.

Giving the judgment for the majority, Lord Carnwarth held that the Court had to take the Joint Position Paper as it stood, and not look beyond it to evidence which was not referred to by the tribunal, but that it could consider the context. In line with London County Council v Church Wardens and Overseers of the Poor of the Parish of Erith in the County of Kent [1893] AC 562, the Court held that “the true test is whether the occupation is of value”. The Court considered that whether the building is occupied or unoccupied, or an actual tenant has been identified, at the relevant date is not critical. The Court concluded that there was no reason why, in the absence of other material evidence, the level of rent should not be assessed by reference to “general demand” derived from “occupation of other office properties with similar characteristics”.

Dissenting, Lord Briggs considered that, in the real world the existence of comparable properties at substantial rents would ordinarily have compelled an examination of whether one or more of the tenants in those properties would have been prepared to relocate to the subject property at a lower, but still more than nominal, rent. However, if the evidence shows  there to be no demand, the rating hypothesis does not require a departure from that real-world conclusion, merely because the subject property is in theory capable of beneficial occupation.

For judgment, please download: [2019] UKSC 23
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (21 Feb 2019 morning session) (21 Feb 2019 afternoon session)