IpsofactoJ.com: International Cases [2005] Part 13 Case 8 [CAEW]


COURT OF APPEAL, ENGLAND & WALES

Coram

Orange PCS

- vs -

Alan R. Bradford

(valuation officer)

LORD JUSTICE AULD

LORD JUSTICE THOMAS

LORD JUSTICE JACOB

17 FEBRUARY 2005


Judgment

Lord Justice Thomas

  1. The issue in this appeal is the correct approach for the purposes of rating to the valuation of a hereditament comprising a very small piece of land within the limits of the public highway on which a mobile phone aerial mast had been sited together with its associated equipment and cabling. The matter is of some importance to telecommunications operators such as the appellants (Orange) who have constructed networks which include similar sites across England and Wales.

    Background

  2. Orange and other companies who hold telecommunications licences, such as Vodafone, mmO2 and T-Mobile, have constructed large networks to enable their mobile phone services to be provided nationwide. The network comprises, essentially, two types of aerials attached to masts – macrocells and microcells. Macrocell aerials are sited on masts which vary in size from 15m to 200m and, depending upon local conditions, can transmit signals up to a distance of 8km. Microcell aerials, with which the present appeal is concerned, are sited on smaller masts and in contradistinction have a much smaller range of up to 500m to 800m; their purpose is to provide services to areas which would otherwise be blind spots and enhance the service during busy periods.

  3. The siting of microcell aerials depends on a number of factors, including the layout of the land, buildings and trees and the availability of power connections. The planning regime is liberal; prior to 3 June 1995 masts and poles less than 15m in height were permitted development under Part 24 of Schedule 2 to the Town and Country Planning General Development Order 1988, subject to what is commonly known as the 28 day prior approval procedure. From 3 June 1995 the erection of masts was permitted development under the Town and Country Planning (General Permitted Development Order) 1995, as amended, and subject to certain exceptions and provided prior notice was given to the local planning authority which did not object within a stipulated period.

  4. Orange as an operator with a licence under the Telecommunications Act 1984 was subject to the Code contained in Schedule 2 to that Act. The one important provision relevant to the way in which mobile operators have sited microcells and to the particular microcell with which this case is concerned is paragraph 2(9) of the Code. This paragraph (as amended by the New Roads and Street Works Act 1991) confers powers to install and maintain telecommunication apparatus on a highway:

    The operator shall, for the statutory purposes, have the right to do any of the following things, that is to say –

    (a)

    install telecommunication apparatus, or keep telecommunication apparatus installed, under, over, in, on, along or across the street ....

    (b)

    inspect, maintain, adjust, repair or alter any telecommunication apparatus so installed; and

    (c)

    execute any works requisite for or incidental to the purposes of any works falling within paragraph (a) or (b) above, including for those purposes the following kinds of works, that is to say –

    (i)

    breaking up or opening a street ....

    (ii)

    tunnelling or boring under a street ....

    (iii)

    breaking up or opening a sewer, drain or tunnel.

    Under the Code no payment or compensation is made either to the highway authority or to the owner of the land within the lateral limits of the highway which is not vested in the highway authority.

  5. It is because of these provisions that Orange and other mobile telecommunications operators sought to locate microcells on highway land wherever possible. As at 1 November 1999, 211 out of 259 such installations were on highway land. Of the 48 which were on private land these were normally subject to rental payments made either under a lease or licence agreement negotiated with the owner of the land.

    The approach to valuation

  6. The assessment of the rateable value of the hereditament was carried out in accordance with the provisions set out in Schedule 6 to the Local Government Finance Act 1988. Paragraph 2(1) of the Schedule provides for what is known as the statutory or rating hypothesis:

    The rateable value of a non-domestic hereditament .... shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on these three assumptions –

    (a)

    the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;

    (b)

    the second assumption is that immediately before the tenancy begins the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic;

    (c)

    the third assumption is that the tenant undertakes to pay all usual tenant’s rates and taxes and to bear the cost of the repairs and insurance.

    It was common ground that the specific assumptions were not material to the dispute in the present appeal. The valuation is to be made at a given date.

  7. There are many descriptions of the rating hypothesis; Viscount Maughan’s in Townley Mill (1919) Limited v Oldham Assessment Committee [1937] AC 419 at 436 was: "a hypothetical tenant and a hypothetical rent, but .... a real and concrete hereditament".

  8. However, although the valuation has to be made on this hypothesis, there are many other principles that have developed in case law over the centuries since rates were first imposed as a form of taxation; it is necessary to refer briefly to one of these which, it was common ground, was relevant – "the principle of reality." This was recently considered in Hoare (Valuation Officer) v National Trust [1998] RA 319 where, Peter Gibson LJ described it at 415:

    In particular I would emphasise the necessity to adhere to reality subject only to giving full effect to the statutory hypothesis, so that the hypothetical lessor and lessee act as a prudent lessor and lessee. I would call this the principle of reality.

    Scheimann LJ made clear the importance of this (at 408);

    The statutory hypothesis is only a mechanism for enabling one to arrive at a value for a particular hereditament for rating purposes. It does not entitle the valuer to depart from the real world further than the hypothesis compels.

    The dispute in this appeal

  9. The hereditament under appeal was located on the grass verge of Rotherham Baulk, a publicly maintained highway in Carlton-in-Lindrick, Worksop, Nottinghamshire; it comprised a piece of land on which there had been erected a hollow mast pole 11.5m high with telecommunications aerials and a steel cabinet 1.5m wide by 0.65 m deep and 1.30m high standing on a concrete base; the aerials and equipment were not rateable. The hereditament was entered in the 1995 non-domestic rating list for Bassethorpe District under the description "communications station and premises" at a rateable value of £2,200 with effect from 1 November 1999. After notice had duly been given to Orange, Orange disputed this.

  10. In essence Orange’s contention was that no value should be attributed to the land on which the equipment was sited as they were entitled to free occupation under the statutory Telecommunications Code referred to at paragraph 4; however, they accepted that the mast itself was rateable for a small amount under Class 3(f) of the Valuation for Rating (Plant and Machinery) Regulations 1994, SI 1994/2680.

  11. The dispute was heard by the Nottinghamshire Valuation Tribunal before whom the Valuation Officer contended for a rateable value of £1,100 in place of the rateable value of £2,200; Orange contended for a value of £100 – that being the agreed value for the mast- but with a nil value for the land. In a written decision of 16 November 2001 the Valuation Tribunal rejected Orange’s contention that a nil value should be attributed to the land on account of Orange’s right under the Code to occupy free of charge; they accepted the Valuation Officer’s valuation of the value of the occupation of the land. It is of interest to note that the Tribunal took into consideration in arriving at the value for the occupation of the land a site used for the same purposes on private land. An appeal was made to the Lands Tribunal.

  12. It was agreed between the parties before the Lands Tribunal and before this Court that, if Orange were correct in their contention, then the valuation should be £100; this was comprised of a nil value being attributed to the land and £100 for the decapitalised cost of the mast. If the Valuation Officer was correct, then the valuation should be £1,100; the difference was the value of £1000 attributable to the land which the Nottinghamshire Valuation Tribunal had determined. In these circumstances it is not therefore necessary to refer to the different methods of valuation, such as the comparative method, the profits basis or the contractors basis, that could have been employed if the actual value of the occupation of the land, ignoring the free right under the Code, had been in issue.

  13. The decision of the Valuation Tribunal was upheld by the Lands Tribunal (George Bartlett QC, President); the President concluded that the fact that the Telecommunications Code did not provide for payment for the occupation of the land did not mean that the occupation had no value in terms of the rating hypothesis, any more than a provision in the Telecommunications Code for payment would have done; he considered that this was the approach to be taken in the light of the decision of the House of Lords in Poplar Assessment Committee v Roberts [1922] AC 93 which he summarised at paragraph 17 of his judgment:

    The essence of the decision in Poplar v Roberts in my judgment is that the statutory hypothesis is the means of establishing the value of the occupier’s occupation and that the amount that the occupier actually pays in the real world in order to occupy the hereditament, whether that amount arises from an agreement or by force of statute, will not be evidence of this value unless it accords, or can be adjusted to accord, with the statutory hypothesis.

    He concluded at paragraph 22 of his judgment:

    The fact that under the Code the operator makes no payment for the right to locate his equipment in the highway and could thus locate it in any suitable position free of charge is no evidence that on the rating hypothesis the hypothetical tenant (who would be such an operator) and the hypothetical landlord would agree that the tenant’s occupation was valueless. On the contrary the fact that, when similar equipment performing a similar function is located on private land, rental payments are normally made very strongly suggests that the land, as well as the equipment on it, is of value to the occupier, and I so find.

    The contentions of Orange

  14. Orange’s contention was simply, though most attractively, made:

  15. It was first submitted that as a matter of practical reality, in ordinary negotiations:

    1. The only potential tenants for the hereditament were telecommunication operators as they alone had the statutory right under the statutory Telecommunications Code to place masts in the location.

    2. The hereditament the subject of the appeal was not the only location at which Orange could site its mast, because as set out at paragraph 3, there was a degree of latitude as to the exact positioning of the mast.

    3. Thus in negotiating for the rent for the site of the mast, the tenant would have had a strong negotiating position in that he would be able to say that he could site the mast elsewhere, if the demands were excessive; the landlord would have had to take into account the fact the only tenant would be someone who had the statutory right under the Code, that the tenant could use another location and that the tenant would not pay more by way of rent than the alternatives available through the use of the statutory powers under the Code.

  16. There was no justification for departing from what would have happened as a matter of reality. This was particularly so because the only hypothetical tenant for the purposes of the rating hypothesis could be a licensed telecommunications operator who would all have the statutory right to occupy the hereditament free of charge under the Code. This was in contradistinction to the position in respect of the mast, as the mast was not provided free and therefore had a value for rating purposes under the Regulations to which reference has been made at paragraph 10.

  17. The decision of the House of Lords in Poplar did not require a departure from the principle of reality; in particular it did not require the court to disregard the fact that the only potential occupier would have the statutory rights under the Code and that the alternatives available to the occupier were in the real world freely available.

    The decision in Poplar

  18. The issue in the appeal turned on the application of the principles established by the decision in Poplar. The speeches in the decision were analysed at length in the written and oral arguments; it is therefore necessary to refer first to the decision and the speeches in some detail.

  19. In Poplar the issue before the House related to the fixing of the rateable value of a public house under the Valuation (Metropolis) Act 1869, which provided for the application of principles similar to the statutory hypothesis currently in force as set out at paragraph 6. The issue was whether account was to be taken of the temporary legislative restriction on the amount of rent that could be charged by a landlord to a tenant under the Increase of Rent and Mortgage Interest (Restrictions) Act 1920. The effect of the Act on the public house was that the rent was less than the true value of the occupation. It was held, Lord Carson dissenting, that the statutory restriction was not material to the determination of the valuation for the purposes of rating.

  20. The principles relevant to this appeal which can be derived from the speeches of the majority, in my view, are:

    1. Rates are levied on the basis of the value of the occupation of the hereditament to the occupier; at page 104 Lord Buckmaster said:

      From the earliest time, it is the inhabitant that has to be taxed. It is in respect of his occupation that the rate is levied, and the standard in the Act is nothing more but a means of finding out what the value of that occupation is for the purposes of the assessment. In my opinion, the rent that the tenant might reasonably be expected to pay is the rent which, apart from all conditions affecting or limiting its receipt in the hands of the landlord, would be regarded as a reasonable rent for the tenant who occupied under the conditions which the statute of 1869 imposes.

      Lord Parmoor at page 118 said:

      Under 43 Eliz.c.2, rates are to be levied upon every occupier of lands, houses etc. The distinction between occupier and owner, in this connection, is of primary importance. The occupation of property may be, and often is, distinct from its value to the owner. This distinction would probably be emphasised where an artificial statutory maximum is fixed and a statutory restriction prevents an owner from recovering from any tenant a greater amount, as rent, than the statutory maximum.

    2. The rent for the purposes of the statutory hypothesis is the value of the occupation to a hypothetical tenant; the actual rent paid by the actual tenant is not determinative. This principle was set out by Lord Buckmaster at pages 103 and 104:

      The tenant referred to is, by common consent, an imaginary person; the actual rent paid is no criterion, unless, indeed it happens to be the rent the imaginary tenant might reasonably be expected to pay in the circumstances mentioned in the section.

      ....

      Just as the tenant is hypothetical, so also is the rent; it is only used as a standard which must be examined without regard to the actual limitation of the rent paid by virtue of the covenant as between the landlord and tenant, and also, as I regard it, to statutory restrictions that may be imposed upon its receipt.

      Lord Atkinson used very similar terms at pages 108 and 113:

      but the actual rent paid by the actual tenant is not and cannot be, treated as a measure of, or a substitute for, the hypothetical rent which conceivably be expected from a hypothetical tenant.

      ....

      To make rateability depend on the fact that the person to be rated is, in fact, an actual tenant, or to make the rent payable by the actual tenant the measure of the rateable value of premises would be an absolute innovation, in direct conflict with the principles of the law of rating as established for over a century.

      As did Lord Parmoor at page 118 and 121:

      It has long been recognised that actual rents based on the contractual relationship between tenant and landlord are not the test of the value of a property for rating purposes. I do not think that there is any difference in this respect between a contractual and a statutory rental. In either case the rateable value must be assessed in accordance with statutory directions.

      ....

      The fundamental distinction remains that the assumed rental, based on statutory directions for the purposes of ascertaining occupation value, is in itself a different thing from an actual rental which denotes the liability between an owner and tenant, and which may depend on a variety of conditions other than those affecting the beneficial or profitable occupation of property.

    3. In ascertaining the value, although all factors have to be taken into account, the value of the occupation to the occupier has to be ascertained without reference to any specific circumstances personal to the occupier. This principle was expressed by Lord Buckmaster at page 103:

      But although the tenant is imaginary, the conditions in which his rent is to be determined cannot be imaginary. They are the actual conditions affecting the hereditament at the time the valuation is made .... those words related entirely to determining the value of the occupation to the occupier, excluding, of course, any element due to his skill, industry, or other strictly personal qualifications. In the present case the respondent seeks to introduce into these words the conditions which regulate the value of the hereditament to the landlord ....

      Lord Parmoor’s description of the principle at page 121 was:

      In ascertaining this annual value, all that can reasonably influence the judgment of an intending occupier ought to be taken into consideration, including not only the natural conditions, but any statutory provisions which may tend to enhance or diminish the value of the beneficial occupation or its profit earning capacity. The special skill or industry of a particular occupier is not one of the natural conditions which attach to property and on this ground it is excluded from consideration of rateable value.

      A further useful illustration of this principle was given by Lord Pearson in Dawkins (Valuation Officer) v Ash Brothers & Heaton [1969] 2 AC 366 at page 381:

      But one excludes human realities to a limited and necessary extent, since it is only the human realities that give any value at all to hereditaments. They are excluded in so far as they are accidental to the letting of a hereditament. They are acknowledged so far as they are essential to the hereditament itself. It is, for instance, essential to the hereditament itself that it is close to the sea and that humans will pay more highly for a house close to the sea. One can therefore take that into account in the hypothetical letting. It is, however, accidental to the house that its owner was shrewd or that the rich man happened to want it and that therefore the rent being paid is extremely high ....

    4. As far as an occupier was concerned, the occupation was not made less beneficial by the operation of the statutory restriction; as Lord Sumner said at page 116

      I think that the word "rent" must now be held to mean something which at any rate is not conditioned by the legal relations which exist between an actual landlord and an actual tenant. An occupier under a beneficial lease cannot require the annual value to be cut down to the rent actually reserved. Equally a hypothetical occupier, although he will occupy, if he occupies at all under a beneficial statute, must not be supposed to limit what he is prepared to give in order to get the occupation of the hereditament merely to the amount, the giving of which will enable him to retain it in the face of anything that an actual landlord could legally do against him.

    5. The principle of equality applicable in rating is a material factor in considering the effect of a statutory regime; Lord Parmoor stated at page 119:

      It has long been recognised, as a matter of principle in rating law, that to make actual rentals the basis of rateable value would be to contravene the fundamental principle of equality, both between the rate contributions from individual ratepayers, and between the totals of rate contributions levied in different contributory rating areas. In effect the result would be to make the amount on which the occupier of property is liable to pay rates dependent in many cases upon on the contractual relationship between a particular landlord and tenant, whereas it is dependent in all cases on a statutory direction applicable on the same principles to all hereditaments, and intended to insure equality of treatment as between the occupiers of rateable property and the rating authority.

      Lord Sumner provided at page 116 an illustration of the principle of equality by showing that it would be unfair to enable an occupier who derived a benefit from the 1920 Act by way of restricted rent to gain the collateral advantage of lower rates:

      Rating is a process between an occupier and a rating authority, to the determination of which the landlord and the lessee are strangers .... If as is contended "rent" is throughout rigidly restricted to its meaning as a term of art, and the measure of value thus applied by hypothetical hands is the real thing, the result would be that the occupier, who already has been enriched under the Rent Restriction legislation by receiving a statutory present of part of the value of his landlord’s property, would profit still further and equally unmeritoriously by escaping from the rates, which the hereditament ought to bear, to the prejudice of less fortunate occupiers. I say "ought to bear" because the only justification for the restriction is that the hereditament is really worth more by the year in the market than the landlord is allowed to charge, but that it is inexpedient that he should have the benefit of it. As a matter of fact, not only does the Act not deal with rating expressly except in another connection, but it actually (s.2(1)(b)) enables the landlord to pass on to the tenant an enhanced burden of rates falling on himself, without discriminating between an enhancement due to increased rateable value and one only due to increased poundage.

    6. The specific purpose of a statute has to be taken into account. Lord Atkinson considered that the 1920 Act was not intended to interfere with the system of valuation set up under the rating legislation; he said at page 108:

      It therefore appears to me that where you find a statute dealing exclusively with actual rent paid by actual tenants, actual increases of such rent, .... the natural conclusion to arrive at is that this statute was not designed or intended to deal with the rating of hereditaments at all .... It is plain, I think, from the provisions of the Act, that the evil it was designed to cure was not excessive or defective rating. The evil it was obviously designed to prevent was the exploiting by landlords of the great demand for dwelling houses, of which the supply was inadequate, in order to exact excessive rents for the dwelling houses they owned.

    After referring to the consequences of the Act, he concluded at page 109:

    Results such as these seem to show that it was never designed to supersede by this Act the old system of rating dwelling houses. Again it cannot, I think, be disputed that equality of rating is and should be one of the main object of all rating systems.

    The hereditament in this appeal

  21. Applying these principles to the hereditament the subject of this appeal and to the issue as to whether the right under the statutory Telecommunications Code of free occupation of the land on which the mast was sited was a matter to be taken into account, I have come to the clear view that that right was not to be taken into account. The decisions of the Valuation Tribunal and the Lands Tribunal were, in my view, correct.

  22. The occupation of the land on which a mast was erected was a right that would ordinarily be of value to the occupier; that followed from the operation of any market. The value of the right was illustrated by the fact that telecommunications operators had to pay for the right to occupy land in private ownership on which they erected masts. For the purpose of determining the value of the occupation under the hypothesis, the rent payable by the tenant should be that value.

  23. The statutory right that Orange had to occupy the land without payment was not determinative of that value in the same way as an actual rent is not determinative; I accept the submission made on behalf of the Valuation Officer that the Code operated to determine that the price paid for the occupancy was nil; it did not operate to determine the value of the occupation.

  24. Moreover the right to occupy free of charge was a right that pertained to Orange as a personal right or qualification derived from the Telecommunications Code; it was not a matter that affected the hereditament as any other occupier (other than a telecommunications operator) would have had to pay for that right.

  25. Clearly the hereditament had a value to Orange as the occupier which, if the right to occupy free of charge under the statutory rights under the Code was disregarded, was agreed as £1000; that was the agreed value of the benefit to Orange of its occupancy, absent the statutory right, and that value had been derived, as appears from the decision of the Valuation Tribunal, from comparables where masts had been erected on private land.

  26. The submission, in the case advanced on behalf of Orange, that a nil value was the value to be derived applying the "principle of reality" was, in my view, in fact not grounded in reality. There could have been as a matter of reality no hypothetical negotiations of the kind outlined in paragraph 15. If a telecommunications operator was entitled to occupy land along or adjacent to the highway for the purpose of siting a mast without charge, there would never be a negotiation with the hypothetical landlord; if the operator was entitled to free occupation, he would utilise the right to place the mast anywhere else on or adjacent to the highway; it was only if topographical or other conditions impelled him to place the mast on privately owned land, that he would not utilise that right; on privately owned land, he would have to pay. The whole argument summarised in paragraph 15 was unreal, because if the statutory right to free occupation of the land was brought into account, there would, ex hypothesi, have been no negotiation as there would have been nothing to negotiate about. The suggestion that in the negotiations the tenant might have been influenced by his ability go to another location along the highway was entirely circular, as he had a right of free occupation anywhere on the highway; that was an incident of the statutory regime. It is quite unlike the position summarised by Scott LJ in Robinson Brothers (Brewers) Ltd v Houghton and Chester-Le-Street Assessment Committee [1937] 2 KB 445 at 470:

    The rent to be ascertained is the figure at which the hypothetical landlord and tenant would, in the opinion of the valuer or the tribunal come to terms as a result of bargaining for that hereditament in the light of competition or its absence in both demand and supply, as a result of ‘higgling in the market.’

    As Scott LJ went on to point out, the enquiry is primarily economic and not legal; it is impossible, for the reasons given to understand in economic terms how there could ever be, as Orange contended the "higgling in the market" in relation to a site on or adjacent to the highway where all such sites could be occupied free of charge under the Code.

  27. Nor, for the same reasons, was it real to look at the valuation on the basis that there was a market in sites on or adjacent to the highway with the participants in that market comprising only those who were telecommunication operators with a free right of occupation; there is no market in any sense of the word for the location of masts on or adjacent to the highway, merely a statutory regime that permitted the operators to erect masts free of charge.

  28. Nor could the reference to comparables be of assistance if the only comparables used were locations which the telecommunications operator had the right to occupy without charge. If the statutory right was brought into account the value of the occupancy of the land was nil; it was meaningless to compare one site on or adjacent to the highway with an alternative site on or adjacent to the highway where the value for both, on the basis the statutory right was brought into account, was nil. The use of the alternative as a comparable used in valuation was, in such circumstances, totally meaningless; both depended on the same statutory right to occupy the land without payment. A true comparable is a similar occupancy, subject to the ordinary incidents of the market.

  29. Furthermore, there was nothing to suggest that the statutory rights under the Code were intended to affect the liability to rates; if the rights were to have such an effect, they would confer a further collateral benefit on telecommunications operators. No doubt such powers were given as part of the decision by Parliament to facilitate the creation of mobile telecommunications networks and the fact they were free of charge was a matter within the terms of the licensing arrangements then current. Ordinarily the right to occupy land and erect a mast on it would be a right that had a monetary value; that occupation would therefore ordinarily benefit the tax base of the locality by subjecting the occupation to rates. Furthermore, the fact that telecommunications operators had a right to free occupation could not, in my judgment, have been intended to bring about a departure from the principle of equality applicable to all occupiers. The right of free occupation was personal to them and dependent on their status as telecommunications operators; the right did not affect the value of the beneficial occupation of the hereditament.

  30. Finally, I do not accept the submission that the actual circumstances of the Poplar decision provide any grounds for distinguishing it.

    1. The effect of the 1920 Act was to provide a statutory restriction on the amount that a tenant would otherwise have been prepared to pay and the landlord otherwise permitted to accept; it was a statutory intervention in the market which affected some dwellings and not others.

    2. The power under the Code was a statutory intervention in the market; absent the right under the Code to occupation of the land on which the mast was situated without payment, payment would ordinarily have been made, just as payment was made when the mast was placed on private land.

    3. In my view, it made no difference that, under the regime created by the Telecommunications Act and the Code set out in Schedule 2, the only potential tenants who could occupy the land for the purpose of erecting a mast were entitled to occupy the land without charge. The fact that they were entitled to free occupation was an incident particular to Orange and other telecommunications operators and not to the occupation of the land.

    4. There was no meaningful distinction between the circumstances in Poplar and in the present appeal by reason of the fact that the speeches in Poplar discussed the issues in terms of the restriction placed on the landlord and not the tenant. In Poplar the legislation restricted the amount that could be recovered by the actual landlord. In the present appeal, the legislation provided that nothing could be charged to the actual tenant by the highway authority; in both instances, the legislation affected the actual parties and not the value of the beneficial occupation of the hereditament.

    5. The illustrations used by Lord Pearce in Dawkins did not assist Orange. It was argued on their behalf that it was essential that the hereditament be located on the highway and that the tenant would pay less for a hereditament located on the highway because the statutory powers under the Code provided them with an alternative. However, for the reasons given at paragraph 26, this submission was circular. Orange’s argument that the only hypothetical tenant of the hereditament the subject of the appeal could be a licensed telecommunications operator begged the question for the same reason.

  31. In my view therefore it was clear that the beneficial occupation of the hereditament did have a value and that the right of free occupation under the Code was not to be brought into account in determining that value.

  32. I would therefore uphold the decision of the Lands Tribunal and dismiss this appeal.

    Lord Justice Jacob

  33. I agree.

    Lord Justice Auld

  34. 34. I also agree.


Representations

Richard Glover (instructed by Stephenson Harwood) for the Appellant.

Timothy Morshead (instructed by Solicitor to the Inland Revenue) for the Respondent.


all rights reserved