Lans v San Fernando Corporation
| Jurisdiction | Trinidad & Tobago |
| Judge | Koylass, C.,Burke, M.,Julumsingh, M. |
| Judgment Date | 29 January 1982 |
| Court | Tax Appeal Board (Trinidad and Tobago) |
| Docket Number | L 2 of 1977 |
| Date | 29 January 1982 |
Tax Appeal Board
Koylass, C.; Burke, M.; Julumsingh, M.
L 2 of 1977
Ashford Sinanan for appellant
Carlton Alert and Bissoondath Ramlogan for respondent
Revenue Law - Income tax — Appeal vs. assessment to house rate on ground that system used did not conform with system practised over 20 years based on a square feet value — Proper basis for assessing the property should have been valuation based on reference to actual rents paid in same year for properties of a comparable standard.
On 15th August, 1977 the appellant filed a notice of appeal against an assessment to house rate for the year 1977 in respect of premises assessed as Nos. 125–127, Riverside Drive, San Fernando, and owned and occupied by him. We shall refer to the rateable hereditament as “the subject property”.
The grounds of appeal stated in the notice are as follows:–
“(a) Statement of allegations of fact. The said property was assessed in 1976 for $92.64 and in the year 1977 is assessed for $420.80.
(b) Statement of the masons to be advanced in support of appeal.
The purported increase in the House Rate is excessive, oppressive and not in conformity with the accepted practice of assessment.”
In accordance with section 102 of the San Fernando Corporation Ordinance Ch. 39 No. 7 (hereinafter referred to as “the Ordinance”), the appellant had given notice of his objection to the annual rateable value of $5,260 fixed for the subject property for the year 1977. We shall refer hereinafter to the annual rateable value as “the A.R.V.”.
The appellant's notice of objection was made by letter of 19th May, 1977, and the following three reasons were given in support of his objections–
“1. The system of assessment used in assessing my property does not conform to the system practiced over the past 20 years based on a sq. ft. value.
2. The rent one is reasonably expected to get for a property has not been carefully followed.
3. I am of the opinion that any change in the system of assessment should be introduced only at the commencement of a triennial period when the system would be applicable to the entire building and applicable to all.”
The above stated reasons were amplified in the notice of objection as under –
“Until quite recently, all buildings were assessed on one or two criteria, the sq. ft. area whenever the building was owner occupied or the rental value when the building was rented out. In the case of additions the law provides that only the addition can be assessed between the triennial periods. Many houses have been constructed recently in the area in which I live and the accepted rate for this area was $1.50 per sq. ft. I, having added 936 sq. ft. to my building would reasonably expect that the addition would have been in the vicinity of $1400.00 which added to the original figure would give me an assessment of approximately $2,600.00 as the annual rateable value. instead I have been confronted with the fantastic figure of $5260.00.
The rent that one would reasonably expect to get if the property was rented must take the environment into consideration; in addition, the high rents which are now being charged for new or improved buildings are in part due to the addition of closets in each room, and or provision of a refrigerator or stove. It is well known that many people are rented homes with an old bed or chair which pass as furnished and that the assessments have been based on the rent paid. My house is owner occupied, I collect no rent, I do not have cupboards in the two additional bedrooms nor are they fitted with refrigerators or stoves. The house was a four bedroom house but as three of these were on the small side, they were converted into two, one with toilet facilities. In addition, two bedrooms were added, each with toilet facilities so that there are five bedrooms in all and not five additional bedrooms. Revised Plan 250/75 sets out in detail the changes which were contemplated and have in fact been made.”
The provisions of law relating to assessments to house rate are sections 95, 96 and 97(1) and (2) of the Ordinance, as replaced by sections 5 and 6 of Ordinance No. 3 of 1960, and sections 99, 111 and 112 of the Ordinance. Briefly these sections provide as follows:–
(a) Annual house rates are to be levied for each year at an amount not exceeding 10% of the A.R.V. of a rateable hereditament — section 95.
(b) The A.R.V. shall be the gross annual rental value less allowances, if any, for voids and loss of rent section 96.
(c) The gross annual rental value is to be determined at such amount of annual rent which a tenant may reasonably be expected to pay for the rateable hereditament for the purpose it is actually used or for which it is suitable section 97(1) and (2).
/(d) New valuations
(d) New valuations are to be made for triennial periods commencing from 1942 and shall continue in force during the three year period, unless altered in accordance with the Ordinance — section 99.
(e) Section 111 provides for the making of a new valuation in any year of any triennial period where the house rate payable for that year has not yet been paid, and it appears to the Corporation that the rateable hereditament has been insufficiently or too highly assessed. The notice of any such amended valuation may be made according to form 1A in the Fourth Schedule to the Ordinance and served on the owner of the hereditament.
(f) Section 112 of the Ordinance provides that it is lawful for the Corporation during the first quarter of either of the last two years of a triennial period to alter a valuation with effect from 1st January of the current year where in its opinion there has been, since the last valuation, a substantial increase or decrease in the rateable value of the hereditament. The notice of such alteration may be made according to Form P in the Fourth Schedule to the Ordinance.
We must comment at this stage that there is no indication, on the record, of the section of the Ordinance under which the Corporation purported to act in altering the assessment of the subject property. We have not seen any notice in either Form 1A or Form P, or in any communication to the appellant in this regard.
A letter of 8th August, 1977, from the Corporation purporting to dispose of the objection provides no enlightenment. This reads as follows:–
“I am directed by the Borough Council of San Fernando to inform you that your request for an adjustment to House Rates on premises No. 125–127 Riverside Drive for the year 1977 was considered by the Council at its meeting held on 8th August, 1977, and it was decided to confirm the Annual Rateable Value of the said premises at/to $5,260.00 per annum.”
Sections 111 and 112 of the Ordinance, under which reassessments may be made during a triennial period, differ in such respects as the circumstances in which, and the times when, revised valuations may be made. However, the mode of fixing the A.R.V. remains as provided by section 97 of the Ordinance. Accordingly, the sole question to be determined by this Court is what amount of annual rent a hypothetical tenant might reasonably have been expected to pay for the use of the subject property as a residence in 1977.
In dealing with the evidence, therefore, we will confine our attention to such facts as are relevant to the issue as stated above.
The appellant testified that he had been a member of the San Fernando Corporation for twenty-one years, during which time he had acquired considerable experience in assessment and valuation of properties in the Borough. He stated that the practice of the respondent had been to increase the valuations of minted-properties from time to, as rents increased. The valuations of owner occupied properties, however, had been retained for long periods despite changes in the levels of rents. The practice had been to reassess such properties only where additions and/or improvements had taken place; in which event increases had been made in relation to the additions and/or improvements undertaken rather than on a revised valuation of the entire property.
He stated that this practice of valuing owner occupied properties on a different basis from that of rented properties had been departed from on the occasion of the reassessment of the subject property on 21st April, 1977. He drew attention to his letter of objection of 19th May, 1977, in which he had made the point that the accepted rate for assessment of properties in the area of Riverside Drive was $1.50 per sq. ft. In his view, the addition of 936 sq. ft. should have resulted in an increased A.R.V. from $1,158 to $2,600, and not to $5,260, which he had described as a “fantastic figure”.
His evidence as to the additions and improvements involving 936 sq. ft. was that originally there had been four bedrooms and two toilets upstairs. He had converted three bedrooms, which were on the small side, to two, and had constructed two additional bedrooms, each with its own toilet facilities. According to him, the area of the top floor, prior to the addition, had been 1,659 sq. ft. It is appropriate /to note
to note, however, that the area of 2)556 sq. ft. for the top floor and 821 sq. ft. for the ground floor, on which the reassessment had been based, was never disputed by the appellant.
In support of his contention that other owner occupied properties had been assessed on a different basis from the subject property, the appellant drew attention to assessments of other owner occupied properties. At his request, the Court visited three premises, namely 1–5, Padmore Street, 26–30, Ruth Avenue and 23–25, Ruth Avenue. A certificate from the Town Clerk (exhibit G.L.5) shows that the A.R.V. of those properties for the year 1980 were $1,680, $3,000 and $2,700 respectively,...
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