Non-domestic rates – Unoccupied property exemption – Industrial warehouse – Respondent leasing premises to third party for installation of bluetooth apparatus – Appellants seeking liability order against respondent on termination of lease – District judge concluding respondent entitled to rating exemption – Whether judge erring in law in finding that the presence of the Bluetooth apparatus constituted rateable occupation of hereditament notwithstanding use was for advertising and not warehousing – Appeal dismissed
The appellant local authority was responsible for billing, collection and enforcement of national non-domestic rates pursuant to the Local Government Finance Act 1988. The respondent was the freehold owner of business premises which fell within the appellants’ area. The premises comprised a 1,500 metre square industrial warehousing unit including office accommodation, described in the local rating list as “warehouse and premises” with a rateable value of £41,250 for the period for 1 April 2011 to 31 March 2012.
The premises were used by a company (CMML) between 20 May and 1 July 2011 inclusive to locate a Bluetooth box. CMML was billed by the appellants for non-domestic rates for the period of its use which it paid in full. The Bluetooth box measured approximately 100 x 100 x 50 millimetres and was placed in the corner of the premises to perform marketing and advertising functions.
From 2 July 2011, the day after CMML ceased to keep a Bluetooth box in the premises, the respondent became liable for any non-domestic rates payable on or after that date. A dispute arose whether such liability did arise for six months after that date and the appellants commenced proceedings in the magistrates court for a liability order. The respondent asserted that it was entitled to enjoy a period without liability to business rates pursuant to regulation 4(b) of the Non-Domestic Rating (Unoccupied Property) Regulations 2008 on the grounds that a tenancy had been granted CMML for a period of 43 days and the exemption under regulation 4(b) applied for six months immediately after the end of the tenancy.
The appellants contended that CMML’s occupation had been so insignificant as not to amount to occupation. However, the district judge concluded that, in the context of miniaturisation of the means of communication, CMML had the right to occupy, had the means of entry, had exercised that right and had placed equipment for use in its business in the premises. Even though the space occupied by that equipment was a small part of the available space they had occupation. Thus, the respondent had the benefit of the rating exemption and the application for the liability order would be dismissed. The appellants appealed by way of case stated.
Held: The appeal was dismissed.
(1) Whether premises were or were not unoccupied was, in many cases, a mixed question of fact and law. The test appeared to be whether the person to be rated had such use of the tenement as the nature of the tenement and of the business connected with it rendered reasonable to infer had been fairly within his contemplation in taking or retaining it. If and so long as he used the premises for the purposes of his business he was in occupation for rating purposes: R v Melladew [1907] KB 192, Associated Cinema Properties Ltd v Hampstead Borough Council [1944] 1 KB 416, John Laing and Sons Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344, Arbuckle Smith & Co Ltd v Greenock Corporation [1960] AC 813, Wirral Borough Council v Lane [1979] 2 EGLR 102; (1979) 251 EG 61, Hayes v Loyd [1985] 1 WLR 714 and Makro Properties Ltd v Nuneaton and Bedworth Borough Council [2012] PLSCS 150 considered.
(2) In the present case, the period of exemption from liability from non-domestic rates arose, if at all, because the unit was a qualifying industrial hereditament, i.e., one in relation to which all buildings were constructed or adapted for industrial use. It had been open to the district judge, on the facts found, to conclude that CMML occupied the hereditament in circumstances which amounted to rateable occupation for the duration of the lease. It occupied, exclusively, the hereditament for the purpose of the permitted user. It intended to use the premises for that purpose which was beneficial to it. The fact that the nature of CMML’s undertaking was such that, once it had identified the optimum location for its equipment, it did not need to “use” more than a minute fraction of the area encompassed within the premises did not prevent its occupation being rateable occupation. Although the rent paid was nominal, the outgoings, in terms of its accepting liability for rates, were not. That reflected the value, or potential value, to it of the lease and its occupation of the premises. Furthermore, given the findings of fact, the district judge had been entitled to conclude that the intended use, though slight in terms of the extent of the space occupied, did give rise to actual occupation and surmounted the de minimis hurdle.
(3) In addition, it was not relevant that the nature of the use to which CMML put the hereditament was different than that which was described in the rating list. Its occupation of the premises was such as to give rise to its liability to pay non domestic rates for as long as the lease continued. There was nothing in the legislation which limited the ability of a local authority to levy rates to occupation for a purpose which was identical to the description of the hereditament in the rating list. The issue of any apparent disconnect between the nature of the occupation of an hereditament and its description in the rating list was a matter for the valuation officer to address if he thought that a new, or additional, “wifi hereditament” might have been brought into existence comprising the wifi connection.
Guy Roots (instructed by Head of Law and Governance Sunderland City Council) appeared for the appellants; Timothy Mould QC and Guy Williams (instructed by Shakespeares Solicitors) appeared for the respondent.
Eileen O’Grady, barrister
