ACV appeals – a new approach

August 13, 2024

Christopher Cant examines a ruling where a judge took a different approach to the scope of appeals in relation to assets of community value (ACVs).

Until the recent decision of Newton v Derbyshire Dales DC [2024] UKFTT 435 (GRC) the First-tier Tribunal (“FTT”) judges hearing ACV cases have taken a clear and united approach to the scope of ACV appeals. ACV appeals have involved a full rehearing taking into account all the evidence put before the Tribunal including evidence in relation to matters occurring after the review decision up to the appeal hearing. This approach described as the Broad approach in that case was not followed by Judge Neville in the Newton case.

1. Original approach

The Broad approach had been spelt out by Judge Warren and Judge Lane in the first ACV appeals and carried forward unanimously until the Newton case. The point had been raised in the first ACV appeal, Patel v Hackney LBC CR/2013/0005. In that case it was argued for the appellant that the appeal hearing is a full rehearing whilst the authority argued that the Tribunal although not limited to the application of judicial review principles should give significant weight to the authority’s decision and afford a degree of deference to the Council’s decision (para. 6). This submission was in part based on the definition of “land of community value” in section 88 of the 2011 Act which involves the relevant land satisfying the two statutory conditions “in the opinion of the authority.”

Judge Lane’s decision in paragraph 7 on this point was that the appeal hearing is a full rehearing. His justification for this was that this “is a simple right of appeal to the First Tier Tribunal. I rather doubt whether the halfway house urged upon me by Mr Lee can intellectually coexist with the Tribunal’s freedom to receive new information and its duty to remain unbiased. Of course, some statements made by a local authority will carry particular weight because of their source. An example in this appeal would be Hackney’s assertion that “the area is experiencing considerable economic growth”. A Tribunal rejecting such an statement from a local authority would have to clearly explain why. This, though, is merely part of the ordinary evaluation of evidence and does not relate to the jurisdiction of the Tribunal.”

Shortly after this in Gulliver’s Bowls Club Limited v Rother DC CR/2013/0009 a similar submission was made that the statutory context emphasised the primacy of the local authority in the making of the decision and due weight must be given to that when the ACV regime does not expressly provide that an ACV appeal shall be a full rehearing (para. 17). Judge Warren rejected this and held that an ACV appeal was no different to hundreds of other appeals to the First-tier Tribunal and that the hearing was a complete rehearing (para. 18).

This was developed further by Judge Warren in both Dorset CC v Purbeck DC CR/2013/0004 (para. 19) and Matterhorn Capital Bristol Limited v Bristol City Council CRB/2013/0006 (para. 11) when the issue of evidence relating to matters subsequent to the review decision was considered. Judge Warren stated in the Bristol CC case that the “law takes this into account. The local authority’s review decision and the tribunal’s appeal decision both involve a full reconsideration of the issues. It is well settled that this means looking at the facts, as they stand, at the time of the review decision and the appeal decision respectively. See Quilter v Mapleson (1882) 9 QB 672 and Ponnamma v Arumogam (1905) AC 383. This approach was approved by a Tribunal of Social Security Commissioners in R(FIS)1/82. The existence of the local authority’s power to take into account changes of circumstances in Rule 2(c) Assets of Community Value (England) Regulations 2012 does not seem to me to affect this principle.”

This general approach by the First-tier Tribunal judges was considered in the Upper Tribunal by Judge Levenson in Admiral Taverns Limited v Cheshire West and Chester Council [2018] UKUT 15 (ACC) who stated at paragraph 7 that “Regulation 11 of those regulations provides that an owner of listed land may appeal to the First-tier Tribunal against the local authority’s decision on a listing review in respect of the land. No grounds of appeal or restrictions on the right of appeal are specified and the parties did not dissent from my suggestion that on such an appeal the First-tier Tribunal stands in the shoes of the local authority and makes its own findings of fact and decision afresh, although it must of course consider all the relevant evidence and representations. Accordingly, the task of the Upper Tribunal on further appeal is to consider whether the decision of the First-tier Tribunal was made in error of law, rather than to review the decision of the local authority.”

The Broad approach has been followed in all ACV appeals until the Newton case.

2. General law

There is a wide spectrum as to the form a particular appeal will take. At one end it can be by way of a complete rehearing on fresh evidence as if a first hearing of the matter. At the other end it may be limited to specific grounds of appeal such as a point of law as with ACV appeals from the FTT to the Upper Tribunal and from there to the Court of Appeal.

In many legislative contexts there will be specific provisions governing the form and issues such as whether fresh evidence can be admitted and whether the decision is limited to what ought to have been ordered at the date of the original decision or allows a decision as if the first hearing of the matter. For example, certain decisions by NHS England in relation to a general practitioner can be appealed to the First-tier Tribunal under section 158 of the National Health Service Act 2006. It is expressly provided that the appeal is by way of redetermination and the Tribunal can make any decision that could have been made by NHS England (s. 158(3) and (4)).

The legislation may not expressly state that the appeal is to be a full rehearing of the matter but may include a provision which will dictate the form of appeal that follows from that provision. For example, if there is statutory provision for an appeal and the grounds of appeal on which the appeal can be made are specified. The inclusion of grounds of appeal indicates that the decision that can be made on the appeal is limited to changing the decision appealed rather than superseding that original decision by a new decision on the basis of new evidence (Arden LJ in AS (Afghanistan) v Secretary of State for the Home Department [2011] WLR 385 at para. 30).

When the legislation provides for an appeal but does not state the form it is to take nor the grounds of appeal that must be satisfied to be successful then that is more difficult. It does not automatically follow that the appeal must be by way of a full rehearing. The form of the appeal is determined by the statutory context in which the appeal arises and by the control exercised by the appellate body over its own procedure. In Jones v Attorney-General [1974] Ch. 148 the Charity Commissioners had ordered the removal of two charitable trustees based on a report produced following an enquiry into the affairs of the charity. This order had been appealed to the High Court pursuant to section 20(7) of the Charities Act 1960 which provided for an appeal to the High Court but no more . The issue was whether the report could be challenged and the appellant could put in further evidence. This depended in part on whether the hearing of the appeal was a full rehearing or one which limited the admissible evidence and required the appellant to show that on the facts including the report the Charity Commissioners could not have reasonably reached the decision to remove the trustees.

Orr LJ reading the judgment of the Court of Appeal stated at page 161 that “We think that Mr. Vinelott was right when he said that there is a wide range of differing processes of appeal between these two extremes, and that in the absence of statutory provision or rules of court it is for the court to which an appeal lies to regulate its own procedure.”

The Court of Appeal rejected the submission that the report could not be challenged in the appeal and the appellant could not adduce fresh evidence. Equally it rejected the submission that the appeal should be a new hearing at which the Charity Commissioners had to prove the facts in the report in order to obtain a fresh decision to remove the trustees. It held that the onus is on the appellant to prove that the order by the Charity Commissioners was wrong and that the report to the extent that it was unchallenged could be relied on as evidence. Orr LJ stated at page 162 that “So to hold involves, as it appears to us, no possible injustice to the appellant, and we cannot believe that it can have been the intention of Parliament, in laying down an elaborate procedure for a fact finding body, that its findings, when uncontested by the appellant, should be treated as having no evidential value.” In reaching this decision the Court of Appeal took account of the legislative context contained in the Charities Act 1960 and in particular the procedure resulting in the report from which to fashion the scope of the appeal and the extent that evidence was admissible.

There is a further point which arises in respect of appeals of opinions. This could be material to ACV appeals which concern an appeal from an opinion of the listing authority. This point arose in DLP Limited’s Patents [2008] 1 AER 839. Sections 74A and 74B of the Patents Acts introduced a system of non-binding opinions by the Comptroller-General of Patents, Designs and Trade Marks relating to the validity and infringements of patents. This case concerned an opinion of an examiner which had been reviewed by the hearing office on behalf of the Comptroller and then appealed to the High Court. Amongst the issues raised by the appeal was an issue as the scope of the review and appeal.

Kitchin J (as he then was) stated at paragraph 22 that “In the case of an appeal under r 77K, the decision the subject of the appeal is itself a review of the opinion of the examiner. More specifically, it is a decision by the hearing officer as to whether or not the opinion of the examiner was wrong. I believe that a hearing officer, on review, and this court, on appeal, should be sensitive to the nature of this starting point. It was only an expression of an opinion, and one almost certainly reached on incomplete information. Upon considering any particular request, two different examiners may quite reasonably have different opinions. So also, there well may be opinions with which a hearing officer or a court would not agree but which cannot be characterised as wrong. Such opinions merely represent different views within a range within which reasonable people can differ. For these reasons I believe a hearing officer should only decide an opinion was wrong if the examiner has made an error of principle or reached a conclusion that is clearly wrong. Likewise, on appeal, this court should only reverse a decision of a hearing officer if he failed to recognise such an error or wrong conclusion in the opinion and so declined to set it aside. Of course this court must give a reasoned decision in relation to the grounds of appeal but I think it is undesirable to go further. It is not the function of this court (nor is it that of the hearing officer) to express an opinion on the question the subject of the original request.”

Although dealing with non-binding opinions what was stated by Kitchin J. in that case resonates in the context of the ACV regime.

3. New ACV approach set out by Judge Neville

At hearing in the Newton case Judge Neville requested submissions on the correct approach to be obtained at an appeal hearing and whether the Broad approach should be continued. The judge considered that the Broad approach had been called into question by the Supreme Court decision in R (Begum) v Special Immigration Appeals Commission [2021] UKSC 7. Mr. Simon Bird KC who sits as a FTT judge in ACV appeals and Mr. Anthony Gill for the Council both argued in favour of the Broad approach. Judge Neville did not accept their submissions.

He placed reliance on the passage in Lord Reid’s judgment in the Begum case (paragraphs 47 to 49) citing the VAT cases of John Dee Limited v CCE [1995] STC 941 and CCE v JH Corbitt (Numismatists) Limited [1981] AC 22. The former concerned the statutory discretion conferred on the Commissioners that a taxpayer can be required to provide security for VAT “[w]here it appears to the Commissioners requisite to do so for the protection of the revenue.” There is an appeal from such a decision to the VAT Tribunal but no provision as to the scope of the appeal or the powers of the Tribunal. The Tribunal has power to hear evidence and to order discovery. The Court of Appeal in the John Dee Limited case held that the question for the Tribunal was not whether the provision of security was requisite. It could not exercise the discretion itself as that discretion was conferred on the Commissioners alone. It was held the Tribunal had to determine whether the Commissioners had acted in a way in which no reasonable panel of Commissioners could have acted or had taken irrelevant matters into account or disregarded matters that should have been taken into account.

This followed the House of Lords decision in the JH Corbitt (Nuimismatists) case concerning an appeal from a decision of the Commissioners in exercise of their discretion to recognise a taxpayer’s records as sufficient for the purposes of a statutory scheme. It had been held in that case that the Tribunal could not exercise the Commissioner’s discretion.

These decisions were material to the Begum case which concerned a discretion conferred by section 40 of the British Nationality Act 1991 to make a deprivation of citizenship order that could be exercised if “the Secretary of State is satisfied that deprivation is conducive to the public good”. Appeals against a deprivation order are to the Special Immigration Appeal Commission (“SIAC”) under section 2B of the Special Immigration Appeals Commission Act 1997. Importantly in the context of ACV appeals Lord Reid stated in paragraph 66 that as the discretion had been conferred on the Secretary of State “in the absence of any provision to the contrary, it must therefore be exercised by the Secretary of State and by no one else.” As there was no indication in the statutory regime that the SIAC could exercise the statutory discretion it meant that on an appeal the SIAC can review the Secretary of State’s decision and quash it but not itself substitute a different decision.

In paragraph 68 Lord Reid reiterated that appellate courts and tribunals cannot decide how a statutory discretion ought to have been exercised by the decision maker or exercise the discretion themselves in the absence of a statutory provision authorising them to do so. He then went on to state that appellate courts and tribunals “are in general restricted to considering whether the decision-maker has acted in a way in which no reasonable decision-maker could have acted, or whether he has taken into account some irrelevant matter or has disregarded something to which he should have given weight, or has erred on a point of law; an issue which encompasses the consideration of factual questions, as appears, in the context of statutory appeals, from Edwards v Bairstow [1956] AC 14.”

Against this backdrop Judge Neville then considered the arguments put forward in favour of the Broad approach in the submissions to him. These were:

(i) the consequence of a decision to list is mandatory – Judge Neville pointed out that the consequences of the decision was not suggested as being material in the judgment of Lord Reid in the Begum case.

(ii) non-statutory government advice – Neville J. did not find this persuasive.

(iii) a similar statutory procedure of review and appeal pursuant to regulation 17 applies to compensation decisions made by a listing authority. Judge Neville did not consider that even with a compensation decision a full rehearing was needed on an appeal.

(iv) the ACV regime has no express power for the FFT to quash the listing decision or to require the listing authority to reconsider it. Judge Neville considered that sufficient powers could be implied in favour of the FTT judge.

This led Judge Neville to conclude that the correct approach in ACV appeals was neither so strict as in the Begum case nor a full rehearing as with the Broad Approach. To determine the approach to be adopted Judge Neville relied on the Court of Appeal decision in Waltham Forest LBC v Hussain [2023] EWCA Civ 733. He did this notwithstanding that he considered there was a tension between the judgment in the Begum case and that Court of Appeal decision. He considered he was justified in doing so because the Court of Appeal had taken account of the Begum judgment and the Court of Appeal judgment had been subsequently applied by Lane J. in Cook v General Medial Council [2023] EWHC 1906 (Admin).

In the Hussain case Andrews LJ applied the dicta of Lord Reid that “the characterisation of a jurisdiction as appellate does not determine the principles of law which the appellate body is to apply. As has been explained, they depend on the nature of the decision under appeal and the relevant statutory principles.” He concluded that Parliament could not have intended a re-hearing in the fullest sense (para. 62) but that the task of the FTT “is to determine whether the decision under appeal was wrong at the time when it was taken.” (para. 63).

This does not mean wrong in law. Rather Andrews LJ followed Judge Michael Cooke in Marshall v Waltham Forest LBC [2020] UKUT 35 (LC) and stated that it means that the appellate tribunal “disagrees with the original decision despite having accorded it the deference (or “special weight”) appropriate to a decision involving the exercise of judgment by the body tasked by Parliament with the primary responsibility for making licensing decision.” He then said “Put simply, the question that the FTT must address is, does the Tribunal consider that the authority should have decided the application differently?”

Lane J. in the Cook case applied the Hussain decision stating at paragraph 20 that “The relevant legal principles this court must follow in deciding an application of this kind are essentially as follows. The court must disturb the decision of the IOT only if satisfied that the decision is "wrong". This does not mean that the court is confined to acting only if a public law error is identified, such as would be the position on judicial review. The way in which the principle operates so as to prevent an unconstrained "merits" review is by requiring this court to give weight to the views of the specialist Tribunal."

Judge Neville considered that the structure of the ACV regime involving nomination, consideration by a local authority, review by an independent officer, and appeal to FTT indicated that the Broad approach of a full rehearing at FTT level was not intended. The judge considered that to do so sweeps away the hard work of the local authority particularly at the review stage which is a burden and allows the owner “to try their luck again before a judge” (para. 27). It also slows down the final resolution of the issue.

The consequence is that Judge Neville held that the appeal before the FTT is not a “de novo” rehearing but one involving an enquiry whether the review decision is wrong. This is a wider enquiry than in judicial review proceedings but appropriate weight has to be given to the review decision.

4. Relevant date for determination

Under the Broad approach evidence was admitted on the appeal to the FTT up until the date of the hearing of the appeal. Judge Neville has rejected this considering that a decision to remove the asset from the list is retrospective in effect due to section 92(4) of the Localism Act 2011. The FTT appeal judge is required to decide whether the asset should have been included in the list and if not then the nomination becomes an unsuccessful nomination. Further the appeal decision cannot extend the period for which the asset appears on the list which is limited to five years from the date of listing (section 87(3)). Accordingly the relevant date by reference to which the appeal should be decided is the date of the listing decision and changes after that date including changes in use should not be taken into account. Just after hearing the Newton case Judge Neville decided in Pavilion (Watford) Limited v Three Rivers DC [2024] UKFTT 443 (GRC) that a successful ACC appeal does not cause a listing to run for five years from the appeal decision but continues to be on the ACV list for the original five year period running from the listing decision (paragraphs 40 to 42).

5. Consequences of new approach

The replacement of the Broad approach may have consequences:

(i) first it will be necessary to ascertain whether it will be followed by other FTT appeal judges. In two appeals Judge Neville has made mention to the subsequent decision of his in the Newton case and cited Lane J. in the Cook case. However, in those case he did not consider that it was necessary to ask for submissions on the correct approach to adopt as the appeal decision would be the same regardless of the approach adopted in the appeal. The decision in the Newton case is not binding on other FTT judges even though Judge Neville was shortly after the decision appointed a judge of the Upper Tribunal. His judgment is with respect persuasive and consistent with the authorities discussed above. In particular it gives effect to the wording of section 88 which requires an asset to be listed if an asset of community value in the opinion of the listing authority and attaches significant weight to the review decision.

(ii) it shifts the focus on to the review decision which will take on a greater importance after this decision. One consequence of this is that some listing authorities will need to consider publishing a guide as to the procedure to be followed on a review particularly in relation to oral hearings. Some already do but many do not. A reasoned decision will be needed at the end of the review if the appropriate weight is to be attached to it.

(iii) to date most reviews by the listing authority do not involve an oral hearing although the owner is entitled to request one under paragraph 7 of Schedule 2 of the Assets of Community Value (England) Regulations 2012. One factor behind owners not having requested such oral hearings in the past is the expectation that on appeal there will be a full rehearing before a judge. Now it will be necessary to consider more fully on behalf of the owner whether the owner’s interests will now be promoted by an oral hearing. An increase in oral hearings will increase the burden on listing authorities requiring them to make available facilities and officers’ time.

(iv) although this will not be as significant as with appeals to the FTT the evidence considered on the review should be focused on matters up to the date of the listing decision and not after that date. In some case this may affect whether the case is determined by reference to current use (section 88(1)) or use in the recent past (section 88(2)).

(v) the same point as in (iv) will apply to appeals to the FTT. Evidence of matters subsequent to the listing decision will in the main not be relevant as the issue is to be determined as at the date of that listing decision. For instance in the Newton case the judge stated that much evidence was put forward at the appeal hearing as to the commercial viability of a Christmas Tree farm on the nominated land but it was disregarded by Judge Neville because the notion had arisen “entirely after the date of the listing” (para. 40).

(vi) one question will be whether on an appeal to the FTT it will be harder to put in fresh evidence relating to matters on or before the listing decision. For instance, evidence as to the state of repair of a closed public house may be material but not provided by the time of the review decision. Will the owner be able to put in such evidence on an appeal to the FTT? This should still be possible and if so it will lessen the impact of the focus moving to the review decision rather than there been a full rehearing.

(vii) it was suggested that the adoption of the Broad approach has slowed down the appeal process. The appeal in the Newton case had a particularly complicated history but in many appeal case a change in approach may not reduce the time an appeal takes. There will still be statements of case and witness statements to be timetabled as well as the possible addition of interested parties. Directions for discovery have not been a common feature of such appeals even under the Broad approach.

It will be interesting to see whether this decision if followed makes a difference in practice or whether the outcomes of ACV appeals will be the same whichever approach is adopted.

Christopher Cant is a barrister at The Barrister Group.