PERSONAL PLANNING PERMISSION REDUCING VALUE

OLDSCHOOL AND OLDSCHOOL v COLL (VALUATION OFFICER)

(RA/312/1994)
LANDS TRIBUNAL (His Hon Judge Rich QC)
London 14th August, 26th September, 27th November 1995
Annual value - Valuation - Evidence of -value - Of fices - Planning
permission - Personal condition - Comparables.

The 1st and 2nd floors, 116/118 Islington High Street, London, were
assessed at 18,000 rateable value. The ratepayers were solicitors and the
premises were their offices. The planning permission was subject to the
conditions that the premises shall be used as a solicitor's-office solely and
for no other purposes and that the permission shall enure for the sole benefit
of Asher Oldschool and Company and for no other person. It was agreed
that the planning conditions were part of the mode and category of
occupation and that the basic value before any end allowance for the
planning conditions was 140 psm applied to 128.8 sm.
The ratepayers referred to a July 1992 agreement in respect of the
rateable value of offices occupied by the National Union of Public
Employees at 7-8 Aberdeen Terrace in Blackheath. The planning
permission was subject to conditions that the premises shall not be used for
any other purpose and shall enure solely for the benefit of the union. The
ratepayers said a reduction in the rateable value of 8% had been agreed
because of this condition and because the basement had been assessed too
high. The valuation officer contended that the agreement was also because
of the out of centre location and excess of car parking. The ratepayers also
referred to the circumstances in which a premium was agreed to be paid for
the lease under which the ratepayers held the appeal premises in 1978 when
the planning permission was limited to Mr Asher Oldschool and no other
person. The circumstances of a letting of the first floor of 355/357 .Upper
Street granted in February 1989 to a firm of architects were explained by
the ratepayers; the planning permission restricted use to solicitors' offices
and the ratepayers agreed that the condition had not resulted in any
reduction in rent but thought that the tenants had satisfied themselves that
the local planning authority would not seek to enforce the condition. The
ratepayers said that a planning application to use the appeal premises as
offices free of the conditions was refused by the council in 1994 and they
referred to views expressed by the planning officer in July 1995 that if the
property were vacant and to let an application for unrestricted office use or
an application for a further personal planning permission from a new office
occupier with a particular need to be in the area would not be considered

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favourably. The ratepayers concluded that no relaxation of the restrictive

personal condition could be expected and said that an appropriate
allowance for the planning conditions was 25% to 30%.
The valuation officer had sought to investigate the planning position
independently but admitted that she had sought only material which would
support her valuation. She said that the planing officer's view as to the grant
of a personal permission for an occupier with a need to be in the area
would, or ought probably to have been, different at the relevant date of May
1990. She did not suggest that the planning conditions could be treated in
1990 as having no effect upon the allowable use but contended that they did
not have any effect on value. In support she referred to the lettings of
355/357 Upper Street and 322 Upper Street both in 1989, and both at full
rents despite planning conditions similar to those applying to the appeal
premises. The valuation officer accepted that in the absence of evidence
one would expect some depressing effect on value to follow from a
personal condition.
HELD: The assessment must be reduced to 17,500 for the following
reasons:
(1) it was accepted that a discount of the order of 7.5% was agreed by
the valuation officer because of the personal nature of the planning
permission at 7-8 Aberdeen Terrace;
(2) the premium agreed for the lease of the appeal premises in 1978,
before the variation of the form of the personal condition, was of no
assistance;
(3) the ratepayers' valuation was rejected as unreliable;
(4) the reason given in 1975 and again in 1979 for allowing the use of
the appeal premises as solicitors' offices, namely the lack of suitable
accommodation for solicitors in the vicinity, led to at least two other
personal permissions for other firms of solicitors being granted in the
immediate area, the second of these, in respect of 116/118 Islington High
Street, being granted in 1992;
(5) although it was accepted that the council was in spite of policies to
preserve residential use, at least in the 1980s willing to permit office use of
premises which had at one time had residential use by applicants with local
needs and that the planning officer's view as to the grant of a personal
permission for an occupier with a need to be in the area would or ought
probably to have been different in 1990, there was no evidence that any
different planning policy which may have operated in 1995 would have
applied in 1990;
(6) too much reliance should not be placed on the transaction
concerning 322 Upper Street because there were reasons to think that the
transaction was not at arms' length and there was an apparent inconsistency
between the rent agreed and the rateable value which was not disputed;

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(7) although the fact that 355/357 Upper Street when restricted to use
by solicitors, was let to a firm of architects whose occupation has not been
challenged by the council over the past six years was supportive of the
valuation officer's case, it could not be determinative as to the effect on
value of the personal condition;
(8) although the premises had in 1988 been out of residential use for at
least 13 years and were physically adapted for office use, there was no
evidence to displace the expectation that a personal planning permission
would reduce value, but having regard to the nature and history of the
premises the agreed valuation of 140 psm must be discounted by only
2.5% to reflect that expectation.

Referencer
The assessment of premises with a personal planning permission for use
as solicitors' offices was reduced by 2.5% to reflect the planning restric-
tions. (0 265)
ILaw of Rating, p 371, I. 24.

APPEAL to the Lands Tribunal from a decision of London (North East)

Valuation Tribunal determining the assessment of office and premises, 1st and
2nd floors, 116/118 Islington High Street, London, NI, at 18,000 rateable
value.
Robert Fookes for the ratepayers.
Valuation officer in person.

The tribunal reserved its decision.

26th September 1995
HIS HON JUDGE RICH QC gave the following decision: This is an
appeal against the decision of the London (North East) Valuation Triburial
dated the 12th July 1994 whereby on the ratepayers' proposal, it directed that.
an assessment of 18,000 rateable value be entered into the rating list for the
ratepayers' premises known as 1st and 2nd floors, 116/118 Islington High
Street, London, Ni, in place of the original assessment of 18,250. The
ratepayers are solicitors and the premises are their offices. Planning
permission for such use was granted on appeal to the Secretary of State for the
Environment in January 1975 subject to two material conditions:
"2. The premises shall be used as a solicitor's office solely and for no
other purposes ...
3. This permission shall not be exercised by any other person than Mr
Asher Oldschool".
Upon further appeal in respect of condition 3, permission was granted on
the 6th August, 1979 for the substitution for condition 3 of a condition:

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"3. This permission shall enure for the sole benefit of Asher Oldschool
and Company and for no other person".
The parties agreed that "the mode and category of occupation of the
hereditament" is to be determined as they are assumed to be on the 1st May
1990, and that the effect of these restrictions upon planning permission for use
as offices is part of the mode and category of occupation to be taken into
account in the assessment of the value of such use as at April 1988. They have
further been able to agree that the net internal floor area of the premises is
128.8 sm and that the basic value to be applied to that office accommodation
"before any possible end allowance to reflect the condition in the .... planning
consent" is 140 psm, giving a basic rateable value of 18,032. Thus the sole
issue for the tribunal is what, if any, effect the conditions in the planning
permission have upon such agreed value.
The agreement for the purposes of the appeal departs from the basis of the
determination of the valuation tribunal which arrived at the same rateable
value by accepting a basic valuation of 160 psm and reducing it to 140 psm
to take into account the possible inconvenience of an application for removal
of the planning restriction.
There was called on behalf of the ratepayers firstly Mr Atkinson BSc,
FRICS who gave evidence of an agreement he had made in July 1992 with the
respondent as valuation officer, in respect of the rateable value of some office
premises occupied by the National Union of Public Employees at 7-8
Aberdeen Terrace in Blackheath. This is some distance from the appeal
hereditament, in a different London borough. The planning permission for
these premises for "the use of no 7... as part of the headquarters of the National
Union ..." was subject to conditions that the premises "(a) .... shall not be used
for any purpose other than the purpose hereby permitted (b) .... shall enure
solely for the benefit of the said union....".
The condition has since been informally released to permit use by the union
as a regional headquarters. Mr Atkinson gave evidence that a reduction in the
rateable value of 8% had been agreed because of this condition and because
the basement had been assessed too high. The valuation officer, who was
authorised to act as valuation officer for the purpose of this appeal and
appeared in person, produced in the course of cross examination a bundle of
notes, not in chronological order, in regard to this transaction, which had not
previously been disclosed. They suggested that the agreement was also
because of the "out of centre location" which, when she gave evidence, she
suggested was a reason why the personal permission had a greater effect upon
value than in the case of the appeal hereditament, and "excess of car parking"
which was valued in total at less than 5% of her valuation. I am satisfied that
in respect of this different restriction on this distant hereditament a discount of
the order of 7.5% was agreed by the valuation officer because of the personal
nature of the planning permission.

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Mr Stephen Oldschool gave evidence on behalf of the ratepayers. His

evidence as to the circumstances in which a premium was agreed to be paid in
1978 for the lease under which his firm holds the premises, that is at a date
before the planning appeal decision varying the form of the personal
condition, was of no assistance to the tribunal. He also gave evidence as to the
number of solicitors practising in the area in 1979, which was contradicted by
agreed documents before the tribunal. However, he was recalled later in the
proceedings to explain the circumstances of a letting of the first floor of
355/357 Upper Street, of which he is a joint lessor under a lease granted in
February 1989 to a firm of architects. The planning permission restricts use to
use for solicitors' offices. Mr Oldschool agreed that the condition, which he
said he was surprised to learn applied to all three rooms, had not resulted in
any reduction in the agreed rent, but he thought that the tenants had satisfied
themselves that the council would not seek to enforce the condition.
Expert evidence was given on behalf of the ratepayers by Mr John Payne
FRICS. He did not claim any expertise in planning matters but relied firstly on
the fact that a planning application to use the premises as offices free of the
conditions set out above was refused by the council on the 19th August 1994
and secondly on the answers given in a letter dated the 8th August 1995 from
the borough planning officer to some questions put to him apparently in
agreement with the ratepayers, by the valuation officer in July 1995. These
questions included:

Question 1:
"If the property were to be vacant and to let would an application for
unrestricted B I office use be considered favourably?" to which the answer
was "No. The proposal would be contrary to policy H2 of the council's
UDP which seeks to retain residential uses" and

Question 5:
"what would the council's view be of an application from a new B1
occupier .... for a further personal planning permission? Would this reply be
different if the application were from an occupier who had a particular need
to be in the area?" to which the answer was: "May be refused for reason set
out in (1). The fact that the occupier had a particular need to be in the area
would not necessarily overturn this view. It is the council's view that there
is now ample vacant B1 floor space available within the borough. In effect
therefore the answer to this question is no".
On the basis of such material, Mr Payne concluded that no relaxation of the
restrictive personal condition could be expected. Having referred therefore to
the agreement in respect of 7/8 Aberdeen Terrace, and to some agreed facts in
respect of 322 Upper Street, where premises subject to a personal condition
had been let at a very full rent by the council to a charity which receives grant

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aid to pay at least part of such rent, he offered the wholly unsupported and
unexplained opinion that an appropriate allowance for the very restrictive
planning consent on the appeal property was 25% to 30%.
I found Mr Payne's failure to inform himself as to the planning position at
the relevant date, namely the 1st May 1990, surprising. I found his failure to
inform himself as to the planning policies applicable to 7/8 Aberdeen Terrace
difficult to understand. I found his failure to consider what if any discount had
been made in respect of the assessment of 322 Upper Street, inconsistent with
his claim to have taken it into account. I found his unsupported and
unreasoned opinion, unhelpful, unreliable and unpersuasive. He told me that
apart from the personal condition, the restriction under condition 2 to use as
solicitors' offices only would justify a discount of 10% in the valuation, but
the opinion seemed to be inconsistent with his failure to claim any such
allowance when dealing with the rating assessment of 355-357 Upper Street,
to the letting of which premises I have already referred.
The valuation officer gave evidence not only on oath, but also in the course
of her cross examination of the ratepayers' witnesses and in the course of her
submissions to the tribunal. This was not helpful. Since she was acting on her
own behalf, it was not practical for the tribunal concurrently with hearing the
appeal to investigate whose fault it was that both sides had failed to comply
with the directions as to lodging documents and agreement of facts and issues.
Nor have I been able to investigate why, as it appeared, so much relevant
material had been made available only during the week before the hearing or
even at the hearing itself, and apparently not considered by or on behalf of the
ratepayers. The valuation officer, however, had sought to investigate the
planning position independently of the agreed questionnaire, to which I have
referred. I can sympathise with her impatience at the ratepayers' failure to do
likewise, but her frank admission that she had sought only material which
would support her valuation, gives reason to doubt that she sufficiently kept in
mind what I understand to be the proper function of a person appointed by the
Commissioners of Inland Revenue to act as valuation officer. It is to provide
honest, comprehensive and impartial evidence to assist the tribunal. It is not to
undermine the ratepayers' case without regard to such overriding obligation.
The interest of the valuation officer is to get the right assessments, not to win
rating appeals.
Nevertheless I must decide this appeal on the evidence adduced before me.
It is apparent that the reason given in 1975 and again in 1979 for allowing the
use of the appeal premises as solicitors' offices, namely the lack of suitable
accommodation for solicitors in the vicinity, led to at least two other personal
permissions for other firms of solicitors being granted in the immediate area.
The second of these, in respect of 116/118 Islington High Street, was granted
in 1992. I accept the valuation officer's evidence that the council's answer to
question 5 as to the grant of a personal permission for an occupier with a need

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to be in the area would, or ought probably to have been different in 1990, from
what the planning officer says it is now, when there is "ample vacant B1 floor
space available within the borough". I accept that the council was in spite of
policies to preserve residential use, at least in the 1980s willing to permit
office use of premises which had at one time had residential use by applicants
with local needs. However I have no material to lead me to the conclusion that
any different policy which may operate in 1995 would have applied in 1990.
I cannot therefore accept that the planning conditions whose effect I am to
evaluate, would have been as restrictive as Mr Payne assumed. On the other
hand, the valuation officer does not suggest that they could be treated in 1990
as having no effect upon the allowable use. Her contention is merely that they
do not or did not at the relevant date in April 1988 have any effect on value.
This conclusion she says follows from the evidence of the lettings of 355/357
Upper Street and 322 Upper Street both in 1989, and both at full rents
unaffected by, in the one case a condition in the form of condition 2 and in the
other a personal condition. I do not think that too much reliance should be
placed on the transaction concerning 322 Upper Street, because there are
reasons to think that the transaction was not at arms' length, and the valuation
officer accepted that there was an apparent inconsistency between the rent
agreed and the rateable value which was not disputed. 355/357 Upper Street
although restricted to use by solicitors, was let to a firm of architects whose
occupation has not been challenged by the local planning authority over the
past six years. I find this supportive of the valuation officer's view as to the
effect of condition 2, but it cannot be determinative as to the effect on value
of the personal condition. Had the valuation officer's evidence not appeared to
me to be affected by an adversarial stance upon which I have already
commented, I think I would have decided that there was no evidence to justify
any adjustment to the agreed basic value. The premises had after all in 1988
been out of residential use for at least 13 years and are physically adapted for
office use. In answer to me however the valuation officer accepted, as indeed
she had done in respect of Aberdeen Terrace, that in the absence of evidence
one would expect some depressing effect on value to follow from a personal
condition. If, for the reasons which I have given, I cannot rely on the evidence
in regard to 322 Upper Street, there is no evidence to displace that expectation.
I would however, having regard to the nature and history of the premises
discount the agreed valuation by only 2.5% to reflect that expectation. That
would produce a figure of 17,581, say 17,500. I would accordingly direct
that a rateable value of 17,500 be entered in the rating list.
Appeal allowed with costs.
Mr Payne's expert evidence to be taxed,
if not agreed, on the County Court scale 2.

Christopher Lewsley Esq, Barrister.

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 NO QUANTITY ALLOWANCE FOR OFFICES

I3RITISH TELECOMMUNICATIONS PLC v BROADWAY

(VALUATION OFFICER)
(RA/379/93)

LANDS TRIBUNAL (J C Hill Esq, TD, FRICS)

London 11th, 12th January, 29th December 1995, 18th March 1996

Annual value - Valuation - Evidence of value - Offices - Edge of town

location - Business park - Quantity allowance - Antecedent valuation date -
Adjustment.

The assessment of offices and premises, Guidon House, Trafalgar

Business Park, Fleet, Hampshire, was determined by a valuation tribunal at
826,500 rateable value. The property was located on the outskirts of Fleet
on Ancells Business Park. It consisted of a four storey building with a total
useable area of 6,528 sm and parking for 380 cars, being by far the biggest
on the business park. The ratepayers sought a quantity allowance. They
contended that Guidion House should be valued at a rate appropriate to its
size when compared with units in similar locations and in the same size
band, mode and category of use. The ratepayers said that units of over
3,500 sm in one letting tended to be occupied by multi-national and similar
plc companies; such companies formed a much more restrictive market in
terms of demand and their status gave them considerably more bargaining
power. Taking the various factors into account the ratepayers had reached
the conclusion that similar sized units in other business parks provided the
best comparison and therefore they referred to other large, medium and
standard sized units in nearby business parks. The ratepayers accepted that
at the antecedent valuation date (AVD) occupiers of large modern air
conditioned offices would generally be prepared to pay rents at the same
level as small office occupiers where the accommodation was located
within a large town or regional centre but contended that on the fringe of
large towns, in small towns and in business parks in green field sites in out
of town locations there was a differential between the rents of small and
large offices and that there was evidence to suggest that the differential in
fact represented a quantity allowance. The valuation officer said that when
assessing the rateable value of a property in a particular location one should
look firstly to the rental evidence in that location and to an analysis of that
rental value adjusted where necessary to the definition of rateable value and
also to the AVD which would then provide the primary rental evidence
upon which to base the assessment. He had therefore looked firstly at rents
passing in Fleet and then for secondary evidence purposes he had looked at

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