Summary

HDR Group Ltd (HDR) clears and remediates contaminated land. In March 2019 it signed an agreement for lease of a council owned former industrial site, conditional on a waste permit from Natural Resources Wales, with a non-exclusive licence to carry out enabling works in the meantime. In May 2021 it made a proposal to cut the site's rateable value. The Valuation Tribunal for Wales dismissed the resulting appeal, finding no material change of circumstances, and HDR appealed to the Upper Tribunal.

The valuation officer then took a point nobody had taken below: HDR had no right to make the proposal at all. Martin Rodger KC, Deputy Chamber President, rejected all four of its submissions and struck the appeal out. HDR's grounds of appeal were never reached.

Background and facts

The site is owned by Merthyr Tydfil County Borough Council and, on the evidence, is contaminated by past unlawful use as a waste facility. The agreement of 29 March 2019 provided for a three year lease at a nominal rent once the permit was obtained.

Clause 6 gave HDR non-exclusive access from 8 April 2019 for preliminary enabling works, including site preparation, security and preliminary waste removal. It stated in terms that HDR took access as a licensee only and that no relationship of landlord and tenant was created. HDR left the site on 12 May 2019, the works complete. It did not return until the lease was executed on 22 November 2021.

HDR had agreed to indemnify the council against costs connected with the licence, said to be understood as covering non-domestic rates. Its proposal of 12 May 2021 sought a reduction from £46,500 to £23,000 with effect from 1 April 2017 on the ground of a material change of circumstances. The Valuation Tribunal for Wales found no material change and dismissed the appeal on 4 August 2025.

The issue

Under regulation 4(2) of the Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2005, a proposal on these grounds may be made by an interested person. Regulation 2(1) defines that as the occupier, or a person with a legal estate or an equitable interest that would entitle it to possession. The valuation officer said HDR was neither when it made the proposal.

HDR argued that it was in actual occupation in May 2021; that occupation need not be rateable occupation, and in any case was; that the agreement and the value its works added gave it an equitable interest; and that anyone directly or indirectly affected by a rating decision may challenge it, which was meant to catch HDR through its indemnity.

The decision

The occupation argument failed on HDR's own evidence. Its owner's witness statement showed it had left two years before the proposal, and the agreement gave it no possession.

Because HDR was not in occupation at all, the Tribunal said the question whether occupation had to be rateable occupation did not arise. It added, in any event, that occupier in regulation 2(1) means a rateable occupier in the sense explained in John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344.

The equitable interest argument was defeated by the agreement itself, which ruled out any interest in the land before the lease was granted. Without the permit, HDR had no right to call for the lease. Until the agreement became unconditional its rights were purely contractual. The Tribunal added that only an equitable interest carrying an entitlement to possession qualifies.

The fourth argument failed on the legislation. Section 55(4) of the Local Government Finance Act 1988 provides for regulations defining who may make a proposal, regulation 4(2) does exactly that, and regulation 6(1)(b) requires the proposer to say which category it falls into.

There is no room for a residual category comprising any other person who may consider themselves affected by an entry in the rating list.Martin Rodger KC, Deputy Chamber President, paragraph 29

Nor can the Tribunal allow someone to participate in an appeal where Parliament has intended that they should not be entitled to do so.Martin Rodger KC, Deputy Chamber President, paragraph 30

HDR's counsel accepted that if HDR had no standing, the appeal should be struck out. It was.

Practical implications

A contractor that goes onto land under a conditional agreement for lease, with a licence for enabling works, holds contract rights and nothing more until the condition is met. If it has also agreed to carry the owner's rates, it pays a liability it has no right to challenge. An indemnity gives a financial interest in the rating list, not a legal one.

Standing was assumed on all sides before the Valuation Tribunal and taken for the first time in the Upper Tribunal. The defect sat in the proposal itself, so the years spent on the merits counted for nothing.

HDR Group Limited v Ms Lucy Formela-Osborne (Valuation Officer) [2026] UKUT 375 (LC), Upper Tribunal (Lands Chamber), Martin Rodger KC, Deputy Chamber President, decision 7 October 2026, case number LC-2025-352. Appeal from the Valuation Tribunal for Wales concerning Merthyr Industrial Services Ltd, Pengarnddu Industrial Estate, Merthyr Tydfil. Held that the appellant was not an interested person under regulation 2(1) of the Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2005 when it made its proposal, so was not entitled to make it and had no standing to appeal. Appeal struck out under rule 8(2)(a) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010.