Council tax – Motorwatys – Noise pollution – Tax bans – Valuation

Charlton-Merryweather v Hunt & ors: CA (Civ Div) (Lords Justice Waller, Rix, Dyson): 19 September 2008.

The appellant council tax listing officer (C) appealed against a decision ((2007) EWHC 3190 (Admin) (2008) Env LR 29) that an increase in traffic could constitute a change in the physical state of a dwelling’s locality for the purposes of council tax banding.

The respondent householders (H) lived in a street parallel to a motorway. The motorway ran at an elevated level higher than their properties. They complained that there had been an increase in traffic, noise and pollution levels, and requested that the valuation band of their properties for council tax purposes should be reduced.

C accepted that traffic had increased, but rejected H’s claims on the basis that that was only an environmental change and not such a ‘physical change’ as would justify a reduction of the houses’ council tax band under the relevant legislation by reason of a ‘material reduction’ in their value. The valuation tribunal allowed an appeal and the judge upheld that decision.

C submitted that an increase of traffic with its attendant noise and pollution on a motorway, which had not itself changed, could not be a ‘change in the physical state of the dwelling's locality’ leading to a material reduction in value within section 24 of the Local Government Finance Act 1992.

Held: The listing officer was properly concerned only with the essential fabric and character of house and locality, but not with other matters which went to their enjoyment, use, occupation or activity, such as the particular degree of traffic to be met on a particular date. That reflected the doctrine of rebus sic stantibus, which had two limbs, one dealing with physical state and one with use, Williams (Valuation Officer) v Scottish & Newcastle Retail Ltd (2001) EWCA Civ 185, (2001) 1 EGLR 157 considered. Whereas the language of schedule 6 paragraph 2 of the Local Government Finance Act 1988 dealing with non-domestic property reflected both limbs of that doctrine, the much more confined language of the 1992 act only reflected the first limb.

Under the 1988 act, traffic flow was treated not as part of the physical state of a locality but as physically manifest there. The expression ­‘physical state of the locality’, applied in the valuation context in the 1988 act, was intended to have the same deliberately narrow meaning where it appeared in the 1992 act. It was not possible to read ‘physical state’ in section 24 of the 1992 act so as to include matters that were merely ‘physically manifest’, Addis v Clement (Valuation Officer) 85 LGR 489 CA (Civ Div) considered. The narrow interpretation was consistent with the Council Tax (Alteration of Lists and Appeals) Regulations 1993, which spoke of a material increase and material reduction as ‘events’, and with the Council Tax (Situation and Valuation of Dwellings) Regulations 1992 and the policy of the 1992 act. A greater level of traffic, together with its environmental consequences, on a motorway, which had not in itself changed at all in its physical state throughout the relevant period, was not capable of coming within the statutory language, and the valuation tribunal and judge erred in accepting that it could.

Appeal allowed.

T Mould QC, Daniel Kolinsky (instructed by the in-house solicitor) for the appellant; T Buley (instructed by the Treasury Solicitor) for the advocate to the court; no appearance or representation for the respondents.