Richie Roberts (Valuation Officer) v Backhouse Jones Limited

The space proviso in section 64(3ZD) of the Local Government Finance Act 1988 qualifies, rather than replaces, the statutory requirements for contiguity. Hereditaments on the same floor must share a wall, fence or other means of enclosure. A space not in common occupation does not prevent contiguity where it is within the relevant enclosing structure, such as a service void within a wall or ceiling.

A corridor between two separately enclosed office suites is not such a space. It lies between two distinct walls and does not make either wall an enclosure of both suites. The suites are therefore not contiguous and cannot be treated as one hereditament under the amended statutory scheme.

The respondent occupied two first-floor office suites in a multi-let building. The suites were separated by a landlord-controlled fire-escape corridor. Neither suite had direct access to the corridor, save through the common parts of the building.

The Valuation Tribunal for England directed that the two rating assessments be merged. It considered that the fire corridor was a space which, under the space proviso in section 64(3ZD) of the Local Government Finance Act 1988, did not prevent the suites from being contiguous.

The valuation officer appealed. The central issue was whether the space proviso made office suites on opposite sides of an intervening fire corridor contiguous for non-domestic rating purposes.

1. Appeal allowed. The Tribunal directed that the separate entries in the 2010 rating list, removed following the Valuation Tribunal’s decision, be reinstated.

2. Section 64(3ZD) of the Local Government Finance Act 1988 defines contiguity horizontally and vertically. In the horizontal plane, some or all of the enclosing wall, fence or other means of enclosure of one hereditament must also form all or part of the enclosure of the other. In the vertical plane, the hereditaments must be on consecutive storeys and the floor of one must lie directly above the ceiling of the other.

3. The final words of section 64(3ZD), described as the space proviso, are not an independent route to contiguity. They merely prevent a space not occupied or owned by the common occupier from defeating contiguity otherwise established under paragraph (a) or (b). The proviso covers a void, compartment or gap within a shared wall, floor or ceiling structure, including service spaces in modern buildings.

4. The Tribunal accepted that consultation papers and draft Bills could assist statutory interpretation, consistently with Ninety Broomfield Road RTM Co Ltd v Triplerose Ltd [2016] 1 WLR 275. The legislative material confirmed that the proviso was introduced to address spaces within walls or ceilings, not to expand the former administrative practice beyond genuinely contiguous units.

5. The fire corridor did not satisfy section 64(3ZD)(a). It was a space between two separate walls, neither of which enclosed both suites. The fact that another wall, at different points along its length, enclosed each suite did not establish a common means of enclosure. Nor did unproved service pipes above the corridor affect the suites’ separate and self-contained character. The result was consistent with Woolway (VO) v Mazars LLP [2015] UKSC 53.

• Upper Tribunal (Lands Chamber): allowed the valuation officer’s appeal and restored the separate rating-list entries.

• Valuation Tribunal for England: by a decision given on 25 April 2019, allowed the ratepayer’s appeal and directed that the two suite assessments be merged.