The rating of barristers’ chambers

Louise Clark presents a legal note of particular interest for any barristers reading. Key points The key to the nature of a hereditament is who is in occupation A shared purpose militates against individual occupation In Prosser KC v Ricketts (Valuation Officer) [2024] UKUT 264 (LC); [2024] PLSCS 159, the Upper Tribunal (Lands Chamber) has considered for the first time the rating of barristers grouping together to occupy sets of chambers. Background The appellant, Kevin Prosser KC, was head of Pump Court Tax Chambers of 15-17 Bedford Row, London WC1. At the material time of 1 April 2017, chambers also had an annex of two floors in Jockey Fields, entered in the non-domestic rating list as a single hereditament with a rateable value of £152,000. The appellant proposed altering the list to show each of the rooms occupied by individual barristers as a separate hereditament, to facilitate small business rate relief. The valuation officer rejected the proposal. The Valuation Tribunal for England ordered that the premises remain as one hereditament. The issue It was agreed that each of the barristers’ rooms was sufficiently identifiable as a unit of property to be capable in law of forming a separate hereditament and that the rateable values proposed were appropriate. The sole issue for determination was whether the rooms were in the sole or paramount occupation of the six individual barristers or of chambers either through the appellant, as head of chambers, the chambers management committee, the members of chambers who held the leases, or all members for the time being. The relationship between barristers and chambers Leases of the premises (the ground-floor reception area and seven rooms occupied by six barristers together with three rooms in the basement for pupils, seminars and ancillary administration) were held by four members of chambers. The leases were in materially the same terms and included a declaration that the tenant held the property on a trust of land. Each lease prohibited assigning or parting with possession/occupation of part but other beneficiaries of the trust were permitted to use the premises provided no relationship of landlord and tenant was created. The chambers’ constitution provided for the terms of membership and management of chambers. Under the constitution, all leases, plant, equipment and other property acquired or held for chambers was to be held on trust for all members. All members of chambers were self-employed sole practitioners. Members shared expenses but not receipts, thereby avoiding being in partnership. Each member was required to bear their due proportion of rent, rates and other chambers’ expenses. Room contribution was determined by floor area and residual expenses were a percentage of the member’s receipts from work done. Chambers was authorised to make use of any member’s room while they were absent on parental leave and to move a part-time member to a smaller room or to require them to share. The constitution did not guarantee that each member would have a room. Room moves were rare and usually arose only on retirement or departure of another member. Members were free to decorate and furnish their rooms as they wished, at their expense. Each member had a key both to their room and to the door of chambers premises, so could access their room at all times. The clerks and cleaners had keys and could enter members’ rooms when necessary. Each member conducted their own business and received their own instructions from clients, with clerks acting as agents for members, assisting with the organisation and management of practices. The law Non-domestic rates are payable by the occupier of a hereditament which is shown as a separate item in the valuation list under section 64 of the Local Government Finance Act 1988. Rateable occupation requires actual occupation, which is exclusive for the purposes of the possessor, of some benefit to the possessor, and possession must not be for too transient a period (John Laing & Sons Ltd v Kingswood Assessment Committee [1949] 1 KB 344). It was agreed that if members of chambers were in possession of their rooms the possession was of value to them and not transient. Occupation of a single hereditament by two or more individuals having joint rights is treated as rateable occupation by them all, but where there is occupation by more than one person having separate legal or equitable rights, the rateable occupier is the one which has paramount occupation (Cardtronics UK Ltd v Sykes [2020] UKSC 21; [2020] EGLR 26). The proper treatment of occupation by an unincorporated association, or group of individuals who have come together to carry on a mutual purpose but which has no separate legal identity from the individuals who comprise its membership, depends on the facts. Generally, membership of the association is not sufficient to render the members rateable occupiers (Verrall v Hackney London Borough Council [1983] QB 445). The decision Dismissing the appeal, the tribunal concluded that the premises were occupied for a shared purpose of all members, to enable them to carry on their individual practices from the same premises, under their collective identity and to benefit from the joint provision of support and administrative services and sharing of expenses. The appellant’s argument, that while chambers as a whole occupied the common parts but only the individual member occupied their own room, was equally consistent with occupation of the rooms being retained by members of chambers collectively. The common purpose required some parts of the premises to be allocated to individual members and others to administration, seminars and training, but the uses of different parts of the building did not change the nature of the agreed arrangement from a joint occupancy of the whole. Image by Shutterstock Louise Clark is a property law consultant and mediator