Ludgate House Limited v Andrew Ricketts (Valuation Officer) & Anor
[2023] UKUT 36 (LC)
Carey Group PLC v A Ricketts (Valuation Officer)
15 November 2024
[2024] UKUT 356 (LC)
Upper Tribunal
A building was unlivable because of a leaky wall. The question was whether fixing the leak was considered 'repair' for tax purposes. The court decided it was, meaning the building's tax value wouldn't be reduced. The court said it wasn't enough that the building was unlivable; the damage caused by the leak needed fixing, and that was 'repair'.
Key Facts
- •Office premises (the Property) were temporarily incapable of beneficial occupation due to water penetration.
- •The water ingress was caused by a defective joint in the exterior wall.
- •Remedial work was carried out to seal the joint and restore the premises to use.
- •The appellant argued that the remedial work was not "repair" and therefore the real condition of the premises should be considered when determining rateable value.
- •The respondent argued that the statutory assumption concerning the state of repair applied, and the remedial work was repair.
Legal Principles
Rateable value is determined based on the assumption that the hereditament is in a state of reasonable repair (paragraph 2(1)(b), Schedule 6, Local Government Finance Act 1988).
Local Government Finance Act 1988
The reality principle requires that a hereditament be valued as it existed on the material day, both physically and in terms of use.
Woolway v Mazars [2015] UKSC 53
In SJ & J Monk v Newbigin, the Supreme Court held that the repair assumption does not apply where premises are undergoing radical alterations and are incapable of beneficial occupation.
SJ & J Monk v Newbigin [2017] 1 WLR 851
Whether work constitutes "repair" is determined according to common law principles applicable between landlord and tenant.
SJ & J Monk v Newbigin [2015] 1 WLR 4817
A state of disrepair connotes a deterioration from a previous physical condition. If a building has always been in the same condition, no want of repair has been proven.
Post Office v Aquarius Properties Ltd [1987] 1 All ER 1055
Outcomes
Appeal dismissed.
The remedial work to seal the defective joint was considered "repair" under the common law principles of landlord and tenant obligations because it addressed damage caused by water ingress and restored the property to a state of reasonable repair. The fact that the original defect was due to poor design or construction did not preclude it from being repair once it resulted in damage.