Part 3: Errors and omissions in proposals
The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.
Proposals: Part 3 covers errors and omissions in proposals and whether they are fatal to the proposal. Includes consideration of cases on Imperial Tobacco, Alam v Stoyles, and Kendrick v Mayday.
For 2017 England (CCA), Reg 8 (SI 2009/2268) covers the procedures to apply where there are errors and omissions in Proposals for the 2017 Rating List in England giving rise to incomplete proposal. NB for 2017 England - invalidity does not apply
For the 2010 Rating List England, 2017 Rating List in Wales and all earlier lists Reg 8 (un-amended by the 2017 regs) covers the procedures to apply where there are errors and omissions in Proposals rendering them invalid.
There have been a number of cases considering errors and omissions in proposals and the considerations to apply in respect of fatality of the proposal, these are considered below.
However, the proposal should be clear and unambiguous as to the grounds on which it is made, if not it should be returned to the proposer. It is not for the VO to determine what the proposer might have intended to challenge.
1.1 Considering errors
In considering errors and whether or not the proposal should be made invalid (2017 Wales, 2010 all areas) or incomplete (2017 England), regard should be had to the principles established in the VT case Imperial Tobacco Group Ltd v Alexander (306019910109/5u NO5) and Mayday Optical Co Ltd v Kendrick (RA/24/2012) as to how such errors should be viewed.
Case Law
1.2 Imperial Tobacco Group Ltd v Alexander (306019910109/5u NO5)
In this appeal heard by the former VT President, Professor Zellick, four categories of error or omission were identified:
i) First are errors of or omissions of a clerical nature which are trivial, insignificant and de minimis. These have no impact on the proposal’s validity and should be ignored
ii) Secondly, there are errors and omissions of substance but not the result of a deliberate attempt to mislead which do not impair the VO’s ability to consider the appellant’s case and which have no adverse impact on an assessment of the correct rateable value. This encapsulates two questions: (a) Has there been substantial compliance? (b) Has it caused the VO any prejudice? If the answer to (a) is yes and to (b) no, these failures do not render the proposal invalid.
iii) Thirdly, there are errors or omissions of a kind that misrepresent the appellant’s case or mislead the VO in considering the matter on its merits. Such error or omission will render the proposal invalid if the VO decides so to treat it. But if in the exercise of his discretion he chooses to disregard it and proceeds on the basis that the proposal is valid, that is entirely proper and the VO may either adjust the rateable value or allow the case to proceed to appeal before the Tribunal, but he may not thereafter raise or rely on the invalidity.
iv) Finally, there will be errors or omissions so fundamental that the proposal cannot in any circumstances be treated as valid (as in R v Northamptonshire Local Valuation Court, ex p Anglian Water Authority [1991] RA 93 CA, where a sewage works that no longer existed was named in the proposal instead of one half a mile away; and in Mainstream Ventures Ltd v Woolway (VO) [2000] RA 395, where the proposer was not qualified to make the proposal as he was not the occupier). In this category, the VO has no alternative but to pronounce the proposal (in his opinion) invalid; and should such a proposal come before the Tribunal, whether on appeal against an invalidity notice or otherwise, the Tribunal, whatever stance taken by the VO, would have to declare the proposal invalid and either uphold the invalidity notice or strike out the appeal on the basis that the Tribunal had no jurisdiction to entertain it. This is clear from the Mainstream case (supra) where the invalidity was raised for the first time by the VO on appeal to the Lands Tribunal although the defect should have been noticed at a much earlier stage.”
1.3 [Alam v Stoyles (UT) RA 71 2018](http://landschamber.decisions.tribunals.gov.uk/judgmentfiles/j1467/RA-71-2017final.pdf)
This case concerned the failure to specify the rent and also mis-described the ratepayer as owner/occupier and considered whether this was fatal to the proposal being valid. The case was heard by Martin Rodger QC, Deputy Chamber President and Peter McCrea FRICS at para 23 in considering the approach to take:
(1) The proper approach to the validity of a proposal to alter the rating list laid down by regulation 6 of the 2009 Regulations was the same as was taken by courts and tribunals to the consequence of procedural errors in other statutory contexts. There were no special rules for rating.
Where a statute laid down a process or procedure for the exercise of some right conferred by the statute, and the statute did not expressly state the consequence of failing to comply with that process or procedure, the modern approach was to determine the consequence of non-compliance as an ordinary issue of statutory interpretation.
It invariably involved, among other things, according to the context, an assessment of the purpose and importance of the requirement in the context of the statutory scheme as a whole importance of the requirement in the context of the statutory scheme as a whole VO was under no duty to investigate whether what the proposer said about his status was correct. The appellant need only substantially comply with the requirements of regulation 6 and not every omission or error would be fatal to its validity
The question whether a proposal was valid or invalid had to be determined in light of the particular proposal and the circumstances in which it was made. In cases such as the present, it would always be necessary to identify the requirement which had not been complied with and the extent to which information had not been provided, but once that had been done it was necessary to consider whether that degree of compliance was sufficient in the circumstances to amount to substantial compliance .
It should be born in mind that this case however, was considered against a 2010 list proposal after the list had closed and no further proposals could be submitted against the 2010 list.
1.4 [Kendrick v Mayday Optical (2014) RA](http://landschamber.decisions.tribunals.gov.uk/judgmentfiles/j995/RA-24-2012.doc)
In April 2012 the President of the Valuation Tribunal, Professor Graham Zellick, considered the validity of two proposals containing inaccurate rental information. The default was recognised by Valuation Officer sometime after their initial receipt.
In his first judgement (Imperial Tobacco – see above) the President undertook an overview of the legislation and provided a number of helpful observations.
The President noted that Regulation 8(1) states that where the VO is of the opinion that a proposal has not been validly made, the VO may serve an invalidity notice. This indicated that the VO has discretion in the manner he treated proposals and in his view if the errors or omissions were insignificant or trivial they should have no impact on a proposal’s validity.
He then went on to identify four different situations involving a departure from the regulatory requirements; and, although the VO was able to challenge invalidity outside the Regulation 8 process, in his opinion there was only two categories where a challenge of this nature should be successful.
The first category is where errors or omissions of substance impair the VO’s ability to consider the appellant’s case and which may cause an adverse impact on an assessment of the correct RV. It was this criterion which was closely examined by the Professor in the Imperial Tobacco case and the subsequent Mayday Optical case. In both cases the issue presented was whether the inaccurate rental detail should result in the proposals being treated as invalid. The President considered that the test encapsulated two questions:
(a) Has there been substantial compliance?
(b) Has it caused the VO any prejudice?
When he applied this reasoning to the facts of the cases before him the President decided that both the Imperial Tobacco and Mayday Optical proposals should be treated as valid.
The rent on the Imperial Tobacco hereditament had been misstated on the proposal form but was derived from a ground lease and had no relevance to the rateable value. Consequently it was hard to say the VO had been prejudiced by the inaccurate information provided on the proposal form. In the Mayday Optical case the rent was stated on the proposal to be £9,500, and this was held by the President to be an error in light of the FOR evidence that stated the rent passing as being £10,000 per annum.
Nevertheless applying his own criteria the President held that the proposal should be treated as valid. The VO appealed this decision and it was eventually overturned by the Upper Tribunal as reported in Kendrick v Mayday Optical (2014) RA …. Counsel for the VO sought for the purpose of the appeal that the Upper Tribunal should proceed on the basis of the President’s analysis but contended that he had wrongly applied his own tests in finding the proposal was valid.
The Judge agreed with counsel’s submission that the 5% discrepancy in the rental declared was significant and this did not comply with the requirements of the legislation and further the VO was likely to be prejudiced by the error as this could lead to an under assessment of the subject property and potentially others like it. Accordingly on appeal the proposal was declared invalid.
The second category involves in the words of the President
“errors or omissions so fundamental that the proposal cannot in any circumstances be treated as valid…In this category, the VO has no alternative but to pronounce the proposal (in his opinion) invalid; and should such a proposal come before the Tribunal, whether on appeal against an invalidity notice or otherwise, the Tribunal, whatever stance taken by the VO, would have to declare the proposal invalid and either uphold the invalidity notice or strike out the appeal on the basis that the Tribunal had no jurisdiction to entertain it.”
In order to illustrate the point the President made reference to two case precedents: R v Northamptonshire LVC, ex parte Anglian Water Authority a Court of Appeal decision which dealt with the requirement to properly identify the property to which the proposal relates, and Mainstream Ventures v Woolway in which the proposer was not qualified to make a proposal as he was not the occupier at the time the proposal was made.
Another case that illustrates a fatally flawed proposal is Esau Brothers v Rodd (1992) RA 257, where a proposal was served outside the time limits set by the legislation.
The VT President also drew attention to the comment of the President of the Lands Tribunal in Tuplin (VO) v Focus (2009) RA 226 in which the Valuation Officer’s late claim that a proposal was invalid due to an absence of causal link was rejected. In this case the failure to serve an invalidity notice deprived the appellant of making good the deficiency by serving a further proposal because of the intervening closure of the list. In these circumstances to avoid prejudice to the ratepayer the failure to serve an invalidity notice within the prescribed period may be a good indication that the proposal was not invalid.
1.5 Summary
As is evident above, it will depend on the nature of the error and its impact as to whether it is material and its existence fatal in considering whether the proposal is incomplete/ invalid.
Each situation has to be considered on its own merits and it is recommended that if you have any doubt then you should contact your Technical Adviser who will assist you in following the correct approach.