Dawn Bunyan (Valuation Officer) v Acenden Limited
Decision date: 25 January 2023
Neutral citation: [2023] UKUT 17 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned the 2017 rating valuation of Ascot House and whether a tenant's Category B fit-out added value to a hereditament valued as vacant and to let on the material day. The Tribunal held that the Category B works largely had general market utility and would attract a rental premium over Category A, increased the rateable value, and set the 2017 RV at £1,000,000. The Tribunal also held that the statutory decapitalisation rate in the 1989 Regulations is not mandatory unless the contractor’s basis is being applied in full.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where a hereditament is valued as a whole by adding an annualised allowance for tenant-funded fit-out to a Category A base, the prescribed decapitalisation rate in the 1989 Regulations is not automatically mandatory; that statutory rate applies only where the contractor’s basis (in full) is being used for all or part of the hereditament. Tenant-funded fit-out of general market utility should be reflected in the valuation hypothesis and can increase rateable value, with the precise allowance determined from market evidence and valuation judgment.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed that the statutory decapitalisation rate could nonetheless be adopted by parties or a Tribunal as a convenient proxy where market evidence does not identify a better rate. It also cautioned about relying on incomplete documentary sources (such as Forms of Return) and noted that better primary market evidence would improve valuation reliability.