Chilton-Merryweather v Hunt & Ors

A gradual increase in traffic, noise and pollution on an unchanged motorway is not, without more, a change in the physical state of a dwelling’s locality. Under Local Government Finance Act 1992, the phrase concerns the physical fabric, and possibly the character, of the locality. It excludes matters of use, activity, enjoyment or occupation.

Council-tax band alterations are tightly restricted. A qualifying prescribed cause must produce a material reduction sufficient to move the dwelling into another band, assessed by reference to 1991 values. A change to the fabric or character of a road may raise a different question for valuation expertise.

Four householders lived beside an elevated section of the M61 motorway. They sought lower council-tax bands because traffic, noise and pollution had increased, although the motorway itself had not been physically altered.

The Manchester North Valuation Tribunal held that the increased traffic and its consequences could amount to a change in the physical state of the locality. It proposed to consider whether the resulting reduction in value justified rebanding. Collins J upheld that decision in the Administrative Court: [2007] EWHC 3190 (Admin).

The listing officer appealed. The central issue was whether increased traffic and its environmental consequences on an unchanged motorway fell within the statutory expression a change in the physical state of the dwelling’s locality.

1. Appeal allowed. The tribunal and Collins J had adopted an interpretation that was too broad. A greater volume of traffic, noise and pollution on a motorway whose physical state had not changed could not constitute a material reduction within section 24(10) of the Local Government Finance Act 1992.

2. Rix LJ, with whom Waller and Dyson LJJ agreed, held that physical state in its statutory context concerned the essential physical fabric and, potentially, the character of the dwelling and locality. It did not extend to matters of use, activity, enjoyment or occupation. Traffic flow and its environmental effects were physical phenomena, but were ordinarily matters of use rather than of physical state.

3. The comparison with the non-domestic scheme was material. Schedule 6 to the Local Government Finance Act 1988 expressly distinguished physical state from matters that were merely physically manifest in a locality. The absence of that wider wording from the 1992 Act supported a narrower construction for domestic council tax.

4. The associated regulations also contemplated an identifiable event and a date on which the circumstances causing the reduction arose. That structure fitted a change to the physical fabric of a dwelling or locality, but not the gradual growth of traffic over time. The restrictive statutory policy, and the requirement to value by reference to 1991 values, reinforced that conclusion.

5. A physical alteration to a road, or possibly a change in its character through recategorisation, signage or redirected traffic, might require evaluation by a valuation tribunal. Those possibilities did not assist the householders on the agreed facts. The tribunal’s decision was therefore erroneous in law.

• Court of Appeal (Civil Division): Allowed the listing officer’s appeal and held that increased traffic on an unchanged motorway was outside the statutory gateway for a material reduction.

• Administrative Court: Collins J dismissed the listing officer’s appeal and upheld the tribunal’s construction: [2007] EWHC 3190 (Admin).

• Manchester North Valuation Tribunal: On 8 June 2006, held that increased traffic, noise and pollution could amount to a change in the physical state of the locality, and directed a further hearing on valuation and banding.