Replacement of stripped out items may be “repair”.
In a case concerning liability to rates the Court of Appeal found that an office in the middle of a scheme of refurbishment and not actually fit for occupation still attracted a rates liability.
S J & J Monk v Newbigin (VO) (2015) concerned an office building in Sunderland. At the relevant valuation date of 6 January 2012, the building was being refurbished. The suspended ceiling, half the raised floor, the cooling system, sanitary fittings and electrical wiring had all been stripped out and a limited amount of partitioning and electrical replacement work to the WCs had been undertaken. The building owner argued that the space was incapable of beneficial occupation as offices due to its actual physical state and should have a nominal rateable value.
The Upper Tribunal agreed. However, the Court of Appeal disagreed. It said that the property should be valued as it stood on the valuation date, rebus sic stantibus, but pointed to the Local Government Finance Act 1988 which provides that, in assessing the rateable value of premises, it is to be assumed that the premises are “in a state of reasonable repair, but exclude from this assumption any repairs which a reasonable landlord would consider uneconomic.”
The Court said that common law applied, that repair was the converse of disrepair and that a state of disrepair connoted a deterioration from some previous physical condition. If it could be shown that the property was worse than it had been at some earlier time, it did not matter whether the deterioration had been deliberate or otherwise. The offices were in a worse condition than at some earlier time and could be said to be in disrepair.
Further, in order to decide whether works needed were works of repair fairly so called, it was necessary, the Court said, to compare the premises in their actual state with their previous state, and it considered the case of Lurcott v Wakely (1911) in which it was said that “[repair] is restoration by renewal or replacement of subsidiary parts of a whole [whilst renewal, in contrast] … is reconstruction of the entirety, meaning by the entirety not necessarily the whole but substantially the whole subject-matter under discussion.”
Applying Lurcott, the Court found that the works were repairs. The original Tribunal had found on the facts that the offices could be put back into their former state economically. Thus the repair works were not excluded under the 1988 Act, and so the statutory assumption of repair applied making the offices liable to a substantive rating assessment
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