Introduction

The case of Lamb (Valuation Officer) v. Go Outdoors Ltd [2015] UKUT 366 (LC) addressed critical issues surrounding the determination of rateable value for non-domestic properties. The primary parties involved were Martyn Lamb, the Valuation Officer (appellant), and Go Outdoors Ltd (respondent), representing a dispute over the correct rateable value of a retail warehouse located at Portrack Lane, Stockton-on-Tees.

The core issue revolved around whether the rent agreed upon for the appeal property should serve as the primary indicator of its rateable value or if other evidential factors, such as comparisons with similar properties and the overall tone of the rating list, should be given more weight.

Summary of the Judgment

The Upper Tribunal (Lands Chamber) reviewed an appeal where neither party deemed the Valuation Tribunal for England's (VTE) decision correct. The VTE had set the rateable value at £180,000 based on the agreed rent of £300,000, considering it the most reliable indicator amidst limited comparable evidence.

Martyn Lamb contended for a higher rateable value of £345,000, arguing the establishment of a "tone of the list" with supportive rental evidence. Conversely, Go Outdoors Ltd proposed a lower value of £226,000, emphasizing economic downturns and comparable lower rents in the vicinity.

The Tribunal meticulously analyzed rental evidence, assessment comparisons, and the concept of "tone of the list" to arrive at a final rateable value of £275,000.

Analysis

Precedents Cited

The judgment heavily referenced several key precedents, notably:

• Lotus and Delta Limited v Culverwell (VO) and Leicester City Council [1976] RA 141 – Establishing guidelines for assessing when a letting should primarily influence the rateable value.
• O Brien v Harwood (VO) RA/22/2002 – Clarifying the stages of establishing a "tone of the list" and the relevance of such tone in valuation.
• Lidl (UK) GmbH v Ryder (VO) [2014] RA 23 and Lamb v Minards (VO) [1974] 153 – Highlighting the Tribunal's preference for current rental evidence over historical list comparisons.
• Barnard and Barnard v Walker (VO) [1975] RA 383 – Discussing the presumption of uniformity in rateable value changes across properties.

Legal Reasoning

The Tribunal's legal reasoning was methodical, focusing on aligning the determination of rateable value with statutory frameworks and precedents. Key points included:

• Primary Evidence: The actual rent of the property during its lease period was considered the most direct and reliable indicator of rateable value, adjusted for market conditions and property-specific features.
• Comparable Evidence: While acknowledging the importance of comparable properties, the Tribunal emphasized proximity and similarity in use, discounting evidence from properties that were either too distant or differed significantly in nature.
• Tone of the List: The concept was scrutinized to determine if a consistent pattern of valuations had been established. The Tribunal concluded that, at the time of hearing, no such "tone" had been firmly established for the area.
• Adjustments for Market Conditions: Recognizing the economic downturn post-AVD (Antecedent Valuation Date), the Tribunal adjusted rents from comparable lettings to reflect the weakened market.
• Mezzanine Floor Valuation: Differentiated rates were applied based on the usage of mezzanine spaces, aligning with local settlements and the RICS Rating Manual.

Impact

This judgment reinforces the primacy of actual letting evidence in rateable value determinations, especially in the absence of a well-established tone of the list. It underscores the necessity for valuation officers to consider both rental agreements and market comparables, adjusted for temporal and locational factors. Future cases in similar jurisdictions can expect greater reliance on direct leasing evidence, provided it aligns closely with statutory assumptions and market conditions at the time of valuation.

Complex Concepts Simplified

Rateable Value

The rateable value is the amount a property would rent for on the open market, which forms the basis for business rates. It's determined under statutory guidelines to ensure fair and consistent valuation across similar properties.

Tone of the List

The tone of the list refers to whether the rateable values on a local authority's rating list reflect a consistent and coherent pattern, typically established through settled, uncontested valuations. A clear tone suggests a stable market and reliable comparative values.

Antecedent Valuation Date (AVD)

The Antecedent Valuation Date is the specific date (often April 1) used as a reference for assessing the rateable value of properties. It serves as the snapshot of market conditions against which valuations are compared.

Schedule 6 of the Local Government Finance Act 1988

Schedule 6 outlines the statutory framework for determining rateable value, including the foundational assumptions such as the state of repair, tenancy commencement, and tenant obligations regarding maintenance and repairs.

Conclusion

The Lamb v Go Outdoors Ltd case serves as a pivotal reference for the valuation of non-domestic properties, particularly retail warehouses, in the context of fluctuating economic conditions and incomplete rating lists. The Upper Tribunal's balanced approach, emphasizing both actual rental agreements and carefully selected comparable evidence, demonstrates a nuanced understanding of market dynamics and statutory requirements.

Key takeaways include the reaffirmation of rental evidence as a primary determinant of rateable value, the careful consideration required when "tone of the list" is not firmly established, and the importance of contextual adjustments based on market conditions and property-specific attributes. This judgment will likely guide valuation officers and legal practitioners in future cases, promoting fairness and consistency in property rate assessments.