His Honour Judge Bidder:
- This is an appeal to the High Court from a decision of the Valuation Tribunal for Wales sitting as an appeal panel and made on 21st February 2011. This appeal is a statutory appeal under regulation 44 of the Valuations Tribunal for Wales Regulations 2010, which provides that an appeal will lie to the High Court from a decision of law of an appeal panel "on a question of law".
- I stress those words which are, as often in statutory appeals to the High Court from tribunals where those appeals have not been subsumed in the new tribunals structure, decisive in this case.
- The appellant, who acts in person, but who has been no less capable in my judgment than a trained lawyer, putting his points forcibly and accurately, made an application in July 2009 to the respondent Council for a Class A exemption from his liability to pay council tax in relation to flat 2, Cornwall Street, Cardiff, to which I will hereafter refer to as "the flat". The building itself was at the time divided into three flats. Flat 2 is the rear ground floor flat which can be identified in the plan, which Mr Hutchings hopefully tells me is not in fact to scale but which is indicative of the structure of the layout of the three flats at page 30 of the bundle, and it shows that this flat was a bedsit. There was a bedroom/lounge, then a kitchen, which Mr Hutchings tells me is somewhat smaller than is represented on the plan, and right at the back of the premises a bathroom. There is another flat on the ground floor and there is a further flat on the first floor of the property.
- A dwelling in Wales is exempt from council tax if it falls within the exemptions that are prescribed by article 3 of the Council Tax (Exempt Dwellings) Order 1992. In order to be an exempt dwelling it must be a dwelling which is vacant and which (a) "requires or is undergoing major repair work to render it habitable" or (b) "is undergoing structural alteration". (c) and (d) are not and never have been argued to apply.
- Mr Hutchings, the appellant, accepts that structural alteration was only being contemplated rather than that it was being carried, and that is clear not only from what he told me but is also clear from the specification of works that were required.
- The tribunal, having read and heard evidence, including oral evidence and written evidence from Mr Hutchings himself, decided it was not established that the flat fell within either exemption, and it is against that decision of that the appellant appeals.
- The brief factual background is that the appellant owns 64 Cornwall Street. At the time of the application, as I have said, it was divided into three flats. On the 14 May 2009 a Mr Hockey , a housing surveyor in the housing department of the respondent council, inspected the property. I should just interpose the background to that, which has been clarified by Mr Hutchings. It is slightly different from the chronology that counsel for the respondents has provided. There had been a tenant in the flat. He had been guilty of misbehaviour, of which complaint had been made to him by Mr Hutchings. The tenant had moved out; he had not been given notice to quit or anything like that, but he simply moved out, and it appears that he then complained to the housing authority about the condition of the flat and it seems that that provoked Mr Hockey to come to the property at some stage shortly before 15 May 2009, which is the first date on the chronology. That is the date on which the notice came to the tenant that tenancy, as Mr Hutchings told me, had expired or terminated by reason of the tenant's notice on the 17th (the tenant vacated property before that time). In any event that is the introduction to Mr Hockey inspecting.
- On 15 May 2009 he served an informal improvement notice on the claimant indicating the requirements that he determined or were necessary to ensure that the property met new fire safety provisions. Improvement notices and prohibition notices may be served by the relevant and responsible council under sections 11 and 12 and 20 and 21 respectively of the Housing Act 2004. This notice was neither an improvement notice nor a prohibition notice; it was an informal notice which indicated what work would be needed in the opinion of the housing inspector to remove identified health and safety hazards. But it is important to note that the housing inspector, Mr Hockey, did not at that stage -- knowing that there were in fact other flats in his premises that were actually occupied -- prohibit or purport to prohibit via prohibition notice the occupation of the premises. That is some evidence that the tribunal were entitled to take into account in determining whether the premises were habitable. If the prohibition notice had been served there would in fact, as Mr Amos has pointed out to me, under the regulations, under exemption G of the specific council tax an exemption where occupation is prohibited as a matter of law; that was not this case.
- But the absence of prohibition notice, indeed the absence of a formal improvement notice, is some evidence available to the tribunal to determine whether the property was habitable.
- If the works were not done it may well have been the case that the respondent's housing authority may have taken the next step and served improvement notice. That would have meant a charge to the appellant of £270 and he would have had to do the work; or, if the requirements for such a notice existed (that is has never been decided by anyone), a prohibition notice could be served under which the council would, as I say, have prohibited occupation of the premises. In May 2009 the parties were a long way away from that.
- The work to be done was extensive, I accept. They are set out in a more formal and detailed notice which is in the bundle; for example, smoke detectors which work from the mains were required, and Mr Hutchings points out that that required routing from the outside mains into all three flats and through one flat into another flat, a mains supply specifically to the relevant smoke detector; fire doors and fire resistant walls as well as other matters
- The detail of that work is set out in the more extensive informal improvement notice which was before the tribunal and was assessable by them as a body experienced in these matters.
- I then move back to the chronology, which is set out at tab 4 on the 3 August with the second formal improvement notice; that is the more detailed one, page 31. There was a respondent's letter of response. I have read all these documents; I do not think I need to go through them in detail. I should note 14 April 2010. As a result of the application for Class A exemptions in July 2009 Class C exemption was granted but not a Class A exception. There was an inspection of flat 2 as a result by the council tax inspector, Mr Childs . His report is at page 46. It is a very short report and it is criticised by Mr Hutchings for ignoring such matters as had been told Mr Childs, but it is a brief report which simply indicates that he had met Mr Hutchings and that there was no structural alteration taking place but that is not in issue. Both flats were vacant and unfurnished but capable of occupation. To quote the report " I told him in my opinion they did not qualify for Class A exemption; he got very aggressive verbally at that point".
- Mr Hutchings is a man who is very articulate and can make his point very forcibly. I suspect that is probably the explanation for that comment.
- Clearly the appellant claimed both flats were deserving of exemption and he made the point that they were deserving of exemption because of the work which the informal improvement notices appear to indicate was required because of the fire regulations.
- As a result of that inspection by Mr. Childs, the application for Class A exemption was refused by the council. It is clear the council had considered the correct test; that can be seen at page 47. The claimant made an internal appeal against that decision, page 55 of the bundle. It is clear that, as of 14 June, no works of structural alteration commenced.
- The council refused the internal appeal. They notified Mr Hutchings of his right to appeal at the tribunal, and the tribunal, the decision of which is at bundle-divider 1, and sets out evidence before the tribunal. It is clear that the tribunal were well aware of the appropriate legislation and considered correctly the two potential grounds of exemption. The evidence of the respondent is set out at 7 and 8 of the tribunal's decision. In particular also it is clear that they placed reliance on the written report of the inspector. He was not actually present at the hearing, but on page 8 the first bullet point makes it clear that they took into account his view. They were entitled to rely on the hearsay before them, and Mr Hutchings was there to challenge it. The decision also, at 9-10, summarises Mr Hutchings's evidence and Mr Hutchings maintained and does maintain still that the property was not habitable due to safety factors. He describes the work that had actually been done and in fact, in the result, he did not do the work which would have been required on the properties if they had remained in multiple occupation but rather eventually decided as a matter of economics to determine that the property should be returned to one single house.
- On the evidence it is quite clear the tribunal could not have found the property was actually undergoing or had undergone structural alteration. In the event that was a factual issue of them and there was ample material on which they could have reached that decision, and it would have been surprising if they had not, so (b) of the exemptions simply does not arise for consideration.
- The real issue is whether the flat number 2 required major repair work to render it habitable. Work was required to render the property compliant with the new fire safety requirements, but that is not the same as the issue which the tribunal had to determine as to whether the properties were habitable, capable of being lived in, which is a pure question of fact. The tribunal had a description of works; they had the opinion and the written evidence of the inspector. They had the evidence that one of the other flats at least was being occupied while works were being carried out. In other words, the housing authority had not prohibited the occupation of the premises while the works were going to be completed and it seems to me that it was open both to the authority, the respondent council in this case, and to the tribunal to conclude that it could have been done while the flats were occupied and that the flats were habitable at the time when the tribunal were considering the exemption.
- The appellant's case is that the flats were unsafe to occupy but no formal improvement notice had been served or was ever served, nor a prohibition notice; therefore the flats could lawfully still be occupied and could be occupied until an prohibition notice was served. The decision therefore of whether the flat required major repair work to render it habitable remains a purely factual decision for the tribunal; they took into account only relevant and material matters including the evidence given to them by the appellant. There was in fact ample evidence that the properties were indeed habitable and did not require work to make them habitable and there can be no question of that being an irrational decision. This appeal is not a merits based one and the question for the tribunal was a question of pure fact; it is not a legal issue and it is therefore inevitable, it seems to me, that as a result this appeal should be dismissed.
- It is a purely factual decision; there is no error of law apparent in that decision therefore I dismiss the appeal. Thank you very much.
MR AMOS: There is an application for the appellant to pay the respondent's costs of this appeal. There is a costs schedule which I hope has found its way to your Lordship.
JUDGE BIDDER: It has found its way to me. Has it found its way to Mr Hutchings?
MR AMOS: It has indeed, my Lord.
JUDGE BIDDER: Mr Hutchings, there is an application for costs and there are two matters: one is the matter of principle of whether an order of costs should be made against you. I am governed by the civil procedure rules, particularly rule 44. I have to take into account many factors, but success in the particular hearing is a very important factor for me to take into account. I also have to take into account the conduct of the parties. If there are any factors which you want me to take into account specifically, normally it follows the event; that the person who wins often gets their costs, and that is an important factor. So on the question of principle, are there any factors that you say that I should take a look at in making a decision on the question of principle?
Secondly, there is an issue of the extent of cost, and I am supposed so summarily assess the costs and I have got the schedule. Can we set the schedule aside for the moment and decide on the issue of principle. Do you have anything to say?
MR HUTCHINGS: I don't think so, no, I don't think so, not without going into the behaviour in the first place. Like I say, there was an unnecessary entrenchment right from the day one from the council point of view.
JUDGE BIDDER: The question is whether on this appeal from the decision of the tribunal they won.
MR HUTCHINGS: Yes, in which case I can't argue in principle.
JUDGE BIDDER: In principle I am going to make an order of costs against the appellant. I will now summarily assess the costs.
MR HUTCHINGS: My Lord, may I ask when I should have received this?
JUDGE BIDDER: You should receive it at least I think 24 hours before the hearing.
MR AMOS: Yes.
JUDGE BIDDER: Was it served in that time?
MR AMOS: As far as I understand, it was served yesterday.
JUDGE BIDDER: I got it yesterday, did you?
MR HUTCHINGS: I didn't get it until yesterday teatime and it was served…
JUDGE BIDDER: The question is, have you had enough time to look at it?
MR HUTCHINGS: It was served via the internet, so I didn't get it until… it wasn't I don't think it was relayed until the lunchtime.
JUDGE BIDDER: Do you want more time to look at it?
MR HUTCHINGS: In truth, no.
JUDGE BIDDER: Have you got any criticisms of it?
JUDGE BIDDER: Yes, I would oppose the costs of the council solicitor. I don't see why… he is a public employee, I understand, is he? Is he entitled to costs?
JUDGE BIDDER: Yes, he is entitled to costs based on an hourly rate. The hourly rate is a very low one, I may say. If they had instructed a private solicitor it would have been far higher. A hundred is as low as you can get for proceedings. I am afraid you are rather fortunate it is very low indeed. But then the question is looking at whether these are reasonable and necessary elements of costs. They are not disproportionate. The amount that is claimed is not in itself excessive and I have got to see whether it is disproportionate. The amount is not obviously disproportionate, but I have to look whether these in essence are reasonable. The attendances on their own party taking instructions on their own side which is a very low figure, even spending 48-minutes on it, ringing you up or writing to you about this hearing.
MR HUTCHINGS: That does rather surprise me.
JUDGE BIDDER: It is too much.
MR HUTCHINGS: I think so yes, I can't recollect that there was thatch. I must be fair, Mr Mar was kind enough to supply me these by request, you know, so that is fair enough.
JUDGE BIDDER: Attendance on others, presumably that is counsel, is it?
MR AMOS: My Lord, I don't know for sure. I am afraid I don't have an instructing solicitor here today. I would assume so.
JUDGE BIDDER: The works done on documents, actually I am a bit surprised it is as low as it is. For an hour and 20-minutes on preparing this bundle (inaudible). Then there is your fee, Mr Amos.
MR HUTCHINGS: May I… I have got no objection to that. The matter of VAT, are they registered for VAT? The council… I am surprised that they are registered for VAT.
JUDGE BIDDER: It is counsel's fee, not on their own… They themselves are not claiming for VAT on solicitors.
JUDGE BIDDER: So the…
JUDGE BIDDER: The fact that the services, their legal services legal services, has cited is actually evidence that these have been properly incurred costs, and I would not normally go behind that unless there were grounds for suspecting dishonesty.
MR HUTCHINGS: I am not suggesting dishonesty, just a question of --
MR AMOS: It may be, if I can turn my back briefly --
JUDGE BIDDER: Yes.
MR AMOS: My Lord, as I understand it, there will be an internal bill within the council that goes to the instructing department from Mr Mar's department.
JUDGE BIDDER: That is the way they deal with it? There is the registered VAT and they claim that. He has signed it in properly. I have no reason to doubt he has not signed it properly so it is the right way to sign it.
MR HUTCHINGS: I accept that.
JUDGE BIDDER: Well, summarily assessing it, it is an extremely low figure. I have to say I have seen bills which are three times this is amount for this type of High Court appeal. It is not obviously disproportionate and the council defend this appeal successfully. The bundle is a very detailed bundle and I am really very sad that the amount of hours is such that in respect of more for a bundle of this size are regularly (inaudible) Others civil matters get (inaudible) reasonable for costs, and I know award I order that the appellant pay the respondent's costs summarily assessed in the sum of 1, £570 inclusive of council VAT. Thank you very much. Thank you very much to both of you, particularly to Mr Hutchings. To get such a reasonable argument from a lay person…(inaudible)
MR HUTCHINGS: My Lord, I think I would have gone on and on if you had not stopped me. I haven't done this frivolously. I really thought there was a strong principle involved and I paid for it.
NOTE FROM HIS HONOUR JUDGE BIDDER QC
In this case there appears to have been a fault in the recording system. I had to check a transcript that was in many places unintelligible, long after the hearing and with the help of only very sketchy notes. I have done my best but am conscious that I cannot recollect much of how I expressed myself. If there remain questions about the current transcript, learned counsel for the respondents should be asked to check his note of the hearing and of the judgment.
22nd July 2011
