Mohammed v Valuation Officer [2006] EWLands RA_54_2005 (09 May 2006)

RA/54/2005

	LANDS TRIBUNAL ACT 1949
	
RATING – valuation – 2005 rating list – shop – disabilities – assessment reduced to RV £18,500 

IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE 
	NORTH YORKSHIRE VALUATION TRIBUNAL

BETWEEN	MRS SHEMIN MOHAMMED	Appellant

	and

	CHARLES WALKER	Respondent
	(Valuation Officer)

	Re:	1-3 Marine Parade
	Whitby
	North Yorkshire
	YO21 3PR

	Before: N J Rose FRICS

	Sitting at Whitby Magistrates’ Court 
	on 28 March 2006

The following case is referred in this decision:

Corus UK Limited v Valuation Office Agency [2002] RA 1

Appellant in person.
Respondent in person with permission of the Tribunal.

	DECISION
Introduction
1.	This is an appeal by the ratepayer, Mrs Shemin Mohammed, against the decision of the North Yorkshire Valuation Tribunal, confirming the assessment in the 2005 rating list of a shop and premises known as 1-3 Marine Parade, Whitby, North Yorkshire, Y021 3PR at £25,500.
2.	The appeal was conducted under the Tribunal’s simplified procedure.  Mrs Mohammed appeared in person.  The respondent valuation officer, Mr Charles Walker, BSc MRICS, also appeared in person with permission of the Tribunal.  I inspected the appeal hereditament in company with both parties shortly after the hearing.  At that time the extent of alterations which had been made to the property subsequent to the material day were pointed out to me.
3.	Mrs Mohammed considered that the correct assessment for the appeal hereditament was £15,750, the figure which the group valuation officer (Leeds) had indicated would be the rateable value in a letter he sent to Mrs Mohammed in October 2004.  It is also the assessment which appeared in the draft 2005 rating list, which was deposited with the Scarborough billing authority pursuant to section 41(5) of the Local Government Finance Act 1988.  In February 2005 the valuation officer reviewed the rateable values of all properties in Whitby town centre in the light of all the information then available.  As a result, approximately 100 alterations were made to proposed assessments, including that of the appeal hereditament, which was increased to £25,500.  The latter figure was confirmed by the valuation tribunal and supported before me by Mr Walker.  The calculations which resulted in the valuations of £15,750 and £25,500 are attached to this decision as Appendices 1 and 2 respectively. 
Facts
4.	In the light of an agreed statement of facts and the evidence I find the following facts.  The appeal hereditament comprises the ground floor of an imposing, four storey building, originally constructed as a brewery some time before 1900 of stone under a pitched and slated roof.  The building stands adjacent to the harbour side and is situated within a mixed commercial retail area at the heart of Whitby.
5.	The appeal hereditament is situated at the junction of Marine Parade, Haggersgate and St Anns Staith.  It is located on a corner site and has frontages to the west side of Marine Parade (facing the harbour) and the north side of St Anns Staith of approximately 18m and 4m respectively.  The section of the premises formerly known as No.1 Marine Parade has large traditional shop display windows to both Marine Parade and St Anns Staith..  The part formerly known as Nos.2/3, has a gross frontage to Marine Parade of approximately 12m but no display frontage, although some limited natural light enters the shop through three traditional sash and casement windows.
6.	Mrs Mohammed acquired the appeal hereditament in 1981.  At all relevant times since then the only access to the premises has been at the southern end of the frontage of Nos.2/3, close to the junction with No.1.  On entering the premises seven steps lead up to ground floor level in Nos.2/3 and from there a further six steps lead down to No.1.  There is an additional access door to No.1 at the southern end of the Marine Parade frontage, but for reasons of security this was not used by Mrs Mohammed so long as No.1 and Nos.2/3 were occupied together.  Because of the small amount of window space, and the fact that the internal floor level of 2/3 is significantly higher than street level, Mr Walker accepted that the Marine Parade frontage of the 2/3 section of the appeal hereditament was effectively a solid frontage.  
7.	On the basis of zones 6.1m deep, the internal floor areas are as follows:
No.1	Zone A	19.70m2	
Nos.2/3	Zone A	60.54	
	Zone B	67.27	
	Zone C	39.92	
	Zone (masked)	  8.99	
	Remainder	  1.25	
		197.67m2	

8.	As originally compiled, the 2005 rating list described the appeal hereditament as “shop and premises” with a RV of £25,500 with effect from 1 April 2005.  The material day and effective date for the appeal is 1 April 2005.
Case for the appellant
9.	Mrs Mohammed made the following points.  The assessment of the appeal hereditament in the 2005 list was 148% higher than in the previous list.  This compared with most properties in the area whose assessments had increased by 65 to 67%, some which had risen by 55% and one which had been reduced.  The appeal hereditament was the only shop between St Anns Staith and Pier Road (the extension of Haggersgate to the north) without a proper façade.  As a consequence it was quite possible for people to walk past without realising that the property was a clothes shop.  The need to climb seven rather steep steps before entering the property was a great disadvantage for older people, who formed a large proportion of its clientele.  The narrow entrance to the property meant that a person standing there could see only a small proportion of the available stock.  The chairs placed by the local authority directly in front of the shop provided an invitation to dogs to foul the pavement in that area.  The presence of the pillars and the limited ceiling height in the shop impeded access and customers’ views of goods.  The trade in the area was strictly seasonal.  A new access and parking scheme, due to take effect in March 2006, would reduce the number of people coming to shop in the area.  The letter sent by the group valuation officer (Leeds) in October 2004 was accompanied by a bill from the billing authority based on the then proposed RV of £15,750.  The first instalment of this bill was subsequently taken from Mrs Mohammed’s bank account.  There was therefore a binding contract by the billing authority to accept that figure.  Mr Walker had said that he would not ascribe a value to the masked area in zone C, but in fact he had done so.  Finally, Mrs Mohammed objected to Mr Walker giving evidence as an expert when he was a party to the proceedings.  She said that this was in conflict with the expert’s duty to provide independent advice.
Case for the valuation officer
10.	Mr Walker produce details of six rents of retail premises in Marine Parade, St Anns Staith, Haggersgate and Pier Road.  They were in locations of varying quality, agreed at different dates between June 2002 and November 2004 and, on Mr Walker’s analysis, the rents varied between £202 and £404 per m2 in terms of Zone A (ITZA).  Although there was no clearly consistent pattern, he considered that the most assistance was to be derived from the letting of 18-22 Pier Road on 1 May 2003, which he analysed at £298 per m2 ITZA.  With a total floor area of 186.56m2, it was closest in size to the appeal hereditament and the letting was effected very shortly after the antecedent valuation date, 1 April 2003.
11.	In the light of this evidence, Mr Walker valued the appeal hereditament at £300 per m2 for Zone A.  He applied 50% of that rate to Zone B, 25% to Zone C and 12.5% to the remainder.  He valued the masked area within Zone C at £73.20 per m2 – a deduction of 2.5%.  He made two adjustments to the resultant value of £37,862.  He deducted 20% to reflect the hard frontage of most of the shop along Marine Parade and the seven steps leading from the street into the shop.  He made a further deduction of 15% on account of the irregular layout of the shop, the varying floor levels and the pillars.  These two percentage deductions were the same as those which had been determined by the VT which heard Mrs Mohammed’s appeal in respect of the 2000 list assessment.  They resulted in a value of £25,747, which he rounded down to £25,500.
12.	Mr Walker did not consider that the effect of future changes in the parking provisions in Whitby after the list was compiled on 1 April 2005 was relevant.  He said that para 2(7) of Schedule 6 of the Local Government Finance Act 1988 provided that the physical state of the locality was to be taken as it was on 1 April 2005.  Consequently any subsequent changes in parking provision were to be ignored.  He also disagreed that the assessment of the appeal hereditament had increased between the 2000 list and the 2005 list to a greater extent than other shops in the locality.  He produced details of a number of units in the area which, like the appeal hereditament, had been previously valued on the basis of £180 per m2 and were now valued at £300 ITZA.
Conclusions
13.	Although Mrs Mohammed submitted that the assessment of the appeal hereditament should be reduced to £15,750, and that Mr Walker’s end allowances were insufficient, she did not produce any rental evidence, nor did she seriously question the zone A rate of £300 per m2 which Mr Walker had adopted as the starting point for his valuation.  In the light of the rental evidence before me, I am satisfied that £300 per m2 is the correct zone A rate for shops in this section of Marine Parade and that this reflects, among other matters, the seasonal nature of trade in Whitby.
14.	I equally have no doubt, however, that Mr Walker has significantly underestimated the effect on value of the agreed fact that 2/3 has no display frontage to Marine Parade.  In my opinion this section of the appeal hereditament should be considered separately from No.1, which offers a prominent window display to passers-by.  In answer to a question from me, Mr Walker expressed the view that, if valued on its own, the full rate of £300 per m2 should be applied to No.1 and I agree.  On the other hand, I consider that the absence of any effective display to the entire retail frontage of 2/3 is a very serious disability for that unit.  Some indication of the rental effect of such a disability is provided by the rent paid for 14 St Anns Staith, on the opposite side of that road to 1 Marine Parade and the next property to the appeal hereditament as one moves south along the harbour side.  The rent agreed for 14 St Anns Staith with effect from 6 May 2004 was equivalent to £227 per m2 ITZA.  Mr Walker said, and I accept, that rents rose slowly between the antecedent valuation date and 6 May 2004.  The frontage of 14 St Anns Staith has full display windows.  Its only disadvantages to which Mr Walker referred are, firstly, that the frontage curves away from the main pedestrian flow and, secondly, that the pavement outside is narrow.  The rent paid suggests that these disadvantages resulted in a reduction of some 25% below the base level of £300 and, in the light of my inspection, that seems to me to be not unreasonable.  The disability suffered by 2/3, which effectively has no window frontage at all through which passers-by can view the goods inside the shop, is in my judgment substantially more severe.  I find that it justifies an end allowance of 50%.  Mr Walker’s further allowance of 15%, applied to both units, in my view reasonably reflects the differences in levels  between the shops, the dividing walls and pillars.  Mr Walker denied that he had agreed not to value the masked area within zone C and I accept that Mrs Mohammed misunderstood his reference to an adjacent area which is not included in the hereditament.  I consider, however, that Mr Walker’s deduction of 2.5% for masking is insufficient and I adopt 10%.  The result of these adjustments is to produce a rateable value of £18,500 (Appendix 3)
15.	I should comment upon Mrs Mohammed’s suggestion that the billing authority’s action in demanding and accepting rates based on RV £15,750 meant that the valuation officer was now unable to seek a higher assessment.  I reject that suggestion.  The billing authority’s initial rate demand was based on information received from the valuation officer to the effect that the appeal hereditament would be assessed at £15,750.  The valuation officer subsequently revised his opinion of the appropriate figure.  He is under a statutory duty to compile and thereafter maintain an accurate local non-domestic rating list, making such alterations as are necessary for that purpose (see Corus UK Limited v Valuation Office Agency [2002] RA1).  In subsequently deciding to increase the assessment, albeit to a figure which I have found to be excessive, the valuation officer was seeking to comply with his statutory duty.  No rate demand submitted by a billing authority can override that duty and, once the appeal process has run its course, rates are payable based on the assessment eventually agreed or determined.
16.	Nor do I consider that there is any merit in Mrs Mohammed’s submission that Mr Walker’s evidence is inadmissible because he is a party to the dispute.  That he is a party results from his duty to maintain an accurate list to which I have referred above.  In complying with that duty, he must act as an independent expert.  As such, and in contrast to most parties to litigation, he has no financial interest in the outcome of the appeal.  There is therefore, in my view, no reason to prevent him from assisting the Tribunal by providing his professional expertise on the issues which it is required to determine. 
17.	Thirdly, I consider that Mr Walker was right to submit that the increase in the assessment of the appeal hereditament between the 2000 and 2005 lists was in line with that of other properties in the area.  Mrs Mohammed’s calculation wrongly compared the 2000 list assessment after disability allowances with the 2005 list assessment before such adjustments.  The extent of the percentage increase is not conclusive, however.  The 2000 list assessment incorporated an allowance for disabilities which I have found to be inadequate.  It is therefore not appropriate to use that assessment as the starting point for the present exercise.
18.	Finally, I agree with Mr Walker that parking changes, which did not come into effect until a year after the material day, do not fall to be reflected in the valuation.
19.	The appeal is allowed.  I direct that the assessment of 1-3 Marine Parade, Whitby in the 2005 rating list be altered to rateable value £18,500.
20.	In appeals conducted in accordance with the simplified procedure, the Tribunal is only authorised to award costs in certain limited circumstances.  In my view no such circumstances arise in this case and I make no order as to costs. 
Dated  9 May 2006

N J Rose FRICS

Appendix 1

1-3 MARINE PARADE, WHITBY, NORTH YORKSHIRE, YO21 3PR

SUMMARY VALUATION PROVIDED TO MRS MOHAMMED
BY GROUP VALUATION OFFICER (LEEDS) IN OCTOBER 2004

				  Value £	
No.1	1	Retail Zone A		    19.70 m2 @		125.80		2478	
Nos.2/3	Retail Zone A		60.54		125.80		7616	
	Retail Zone B		67.27		62.90		4231	
	Retail Zone C		39.92		  31.45		1255	
	Sale Area Zone C Masked Area		  8.99		  30.66		  276	
	Remaining Retail Zone		  1.25		  15.73		    20	
	Total Area:	  	197.67 m2			
					
	Total Value:				15876	
					
	Adopted Rateable Value:				£15750	

This Valuation is effective from 1 April 2005	

Appendix 2

1-3 MARINE PARADE, WHITBY, NORTH YORKSHIRE, YO21 3PR

VALUATION BY MR C WALKER, BSc MRICS

			£	£	
No.1	1	Zone A		19.70 m2		300		5,910	
Nos.2/3	Zone A		60.54 m2		300		18,162	
	3	Retail Zone B		67.27 m2		150		10,091	
	4	Retail Zone C		39.92 m2		75		2,994	
	5	Zone C Masked Area		  8.99 m2		73.20		   658	
	6	Remaining Retail Zone		1.25 m2		37.50		       47	
					£37,862	
	Less 20% hard frontage and steps				  £7,572	
					
					£30,290	
	Less 15% internal layout and obstacles			
	£4,543	
					
					£25,747	
					
	Say Rateable Value		£25,500	

Appendix 3

1-3 MARINE PARADE, WHITBY, NORTH YORKSHIRE, YO21 3PR

DETERMINATION OF VALUE BY LANDS TRIBUNAL

				£	
No.1	1	Zone A 19.70 m2 @ £300				5,910	
Nos.2/3	Zone A 60.54 m2 @ £300			18,162		
	Zone B 67.27 m2 @ £150			10,090		
	Zone C 39.92 m2 @ £75 			2,994		
	Zone C Masked Area   8.99 m2 @ £67.50			607		
	Remainder 1.25 m2 @ £37.50			47		
				31,900		
	Less 50% for hard frontage			15,950		15,950	
					21,860	
	Less 15% for split levels, pillars and 
dividing walls			
	  3,279	
			18,581	
	Say Rateable Value		£18,500