[2025] UKUT 163 (LC)

In his rebuttal report Mr Hawkins had distinguished between the practice for the 2017 List under the check, challenge and appeal regime and earlier lists where evidence was openly exchanged between the VO and agents. Mr Hatchwell submitted that the absence of co-ordinated exchange in the Check/Challenge/Appeal in the 2017 List had led to lack of awareness of the 2014 letting at the Property and the 2013 Letting of Amazon, Swallowdale Lane. Mr Hawkins said that during a conversation with the agents dealing with the latter property it was revealed that they were unaware of the rent free period in the lease when they decided not to make a formal challenge. Mr Hatchwell submitted that neither rent had been “subsumed” in a tone and that “a pattern of assessments which has emerged in ignorance of actually existent rental evidence is not a tone”.

Mrs Franklin submitted that the tone value of the Property and the comparable properties was established and had been undisturbed for the last eight years. The levels of value adopted were a matter of fact, not opinion. The 2017 List is now closed and there are no challenges outstanding on distribution warehouses in Hemel Hempstead, so no further alterations can be proposed or made. She contended that the circumstances at Hemel Hempstead aligned with those in Futures London Limited v Stratford (VO) where tone was found to have been established in the closed 2000 List. At paragraph 24 Mr Peter Clark FRICS referred to the approach adopted by the VO when valuing properties and the same approach has been adopted in this instance.

“Rateable value is based on market rents but these usually vary, sometimes

considerably, and it is often difficult to find a general pattern. When preparing a rating list the valuation officer is required to value each hereditament individually and to have regard to the underlying principle of uniformity, fairness and equality. Although rents may vary greatly assessments must show a uniform pattern. This has led to assessment by the use of common unit figures for classes of hereditament, location, finish, size etc, often with individual adjustments for particular characteristics.”

Mrs Franklin cited paragraph 25, where Mr Clark considered when tone is established.

“There are three stages leading to the establishment of tone of the list. At first, when a new rating list is put on deposit, assessments will carry relatively little weight: they are opinions of value by the valuation officer, as yet unchallenged and untested by negotiation. Over time assessments will be challenged and agreed or determined by a VT or this Tribunal or accepted by lack of challenge. Finally, a stage will be reached when enough assessments have been agreed or determined or are unchallenged to establish a pattern of values, a tone of the list. The list is then said to have settled: rents will be largely subsumed into assessments. At this stage rating surveyors will have little regard to rents and pay considerable attention to assessments. The position at any time regarding the tone of the list is a question of fact. When an assessment is challenged before a tribunal the correct time for deciding whether the tone of the list has been established is immediately before the hearing. The weight to be given to comparable assessments as evidence of value will depend on the circumstances in each case. These may indicate that little or no weight should be given to comparable assessments, eg where acceptance of value is more acceptance of rate liability or where a body of settlement evidence rests on a single agreed assessment.”

Mrs Franklin submitted that in line with Mr Clark’s reasoning, the tone for distribution warehouses in Hemel Hempstead had been firmly established. Three of the eight properties had been subject to settled challenges made by experienced rating surveyors and none had resulted in the tone being altered. Of the remaining five properties, four had been subject to check confirmation which meant that the breakdown of their valuations had been scrutinised and no challenges had been made. Only one property had not been the subject of a check or challenge.

She distinguished the situation at Hemel Hempstead from that in Arma Hotels Ltd v Dawn Bunyan (VO) [2023] UKUT 00003 (LC) where the Tribunal (Mrs Diane Martin TD MRICS FAAV) found that the tone was not established owing to lack of evidence of agreement to the current assessments. In that case, Mrs Franklin submitted, some of the assessments on the comparable properties had been amended only a few months previously, and it was contended that many occupiers would have been eligible for Covid 19 relief. At Hemel Hempstead the list is closed to further challenges, the tone has remained undisturbed for eight years and significant payment liability means it would have been worthwhile ratepayers challenging assessments if they believed them to be excessive.

In our judgement the introduction of the check, challenge and appeal methodology for the resolution or determination of appeals has changed the approach of ratepayers and their advisors to alteration of the rating list. We accept the point made by Mr Hatchwell concerning the absence of exchange of evidence and the consequent lack of awareness of relevant rental evidence around the AVD. At Hemel Hempstead there seems to have been very little co-ordination between advisors and the VO regarding rental information and it is surprising that key rents appear not have been at the forefront of discussions. This problem has possibly been exacerbated by an appeal process that meant in this case the issues have taken more than four years to be resolved. It appears that the stages set out in Futures London Limited v Stratford (VO) [2005] RA 75 are now less easily defined and establishment of a tone is less clear cut.