Pall Mall Investments (London) Ltd v Gloucester City Council

Abstract

Rates – Rateable occupation. The district judge upheld the respondent local authority’s unoccupied non-domestic rate demand against the appellant company and rejected the appellant’s argument that the properties were exempt on the ground that non-occupation was the result of dilapidations and the state of the properties was such that occupation was prohibited by law. The appellant appealed by way of case stated. The Divisional Court, in dismissing the appeal, held that health and safety legislation did not prohibit occupation and the risk of breach of the legislation if the premises had been, without more, occupied did not suffice to exempt the appellant.

Summary

The judgment is available at: [2014] EWHC 2247 (Admin)

The appellant company was the owner of two properties, which appeared in the rating valuation lists as office premises. The properties were unoccupied either by the appellant or by tenants during 2011 to 2013. The respondent local authority made an unoccupied non-domestic rate demand for those years. The appellant sought exemption on the ground that non-occupation was the result of dilapidations and the state of the properties was such that occupation was prohibited by law. The authority refused the exemption and made an application to the magistrates’ court for a liability order, pursuant to reg 12 of the Non-Domestic Rating (Collection and Enforcement) Local Lists Regulations, SI 1989/1058. The district judge rejected the appellant’s argument that the properties were exempt. The appellant appealed by way of case stated.

The issues referred by the judge for the consideration of the court were: (i) whether, in the absence of a currently applicable statutory provision directly prohibiting occupation or a valid statutory notice prohibiting occupation, he had been correct to determine that both the fact that the properties had been constructed as offices and had been in disrepair, and the fact that the court had had evidence from a surveyor that occupation of the properties for office use would not comply with the numerous statutes covering general occupation and welfare, including provisions of the Health and Safety at Work etc Act 1992, the Workplace (Health, Safety and Welfare) Regulations 1992, SI 1992/3004, and the Regulatory Reform (Fire Safety) Order 2005, SI 2005/1541, had been insufficient grounds to support a conclusion that the owner of the properties had been prohibited by law from occupying the properties or allowing them to be occupied within the terms of reg 4(c) of the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008, SI 2008/386 (the 2008 Regulations); and (ii) alternatively, whether, on finding that there had been no prohibition in law on occupying part of the properties by an alternative storage use and, in the light of the evidence from the surveyor that areas of the properties could form an internal store, similar in effect to a garage lock-up and potentially suitable for a limited amount of storage boxes at the premises, the court could determine that the possibility of storage use alone had meant that the owner of the properties had not been prohibited by law from occupying the properties or allowing them to be occupied within the terms of reg 4(c) of the 2008 Regulations, or whether it would have been necessary for the court first to have considered whether the areas in question could be defined as separate parts of the properties.

The appeal would be dismissed.

It was highly improbable that Parliament had intended that a building owner should be exempted from unoccupied rates altogether in consequence of his own failure to carry out necessary maintenance and repair, unless, expressly or by necessary implication, occupation had been prohibited by law. It was not enough for the owner to establish that, if he occupied the property or allowed it to be occupied for a particular purpose, he would render himself liable to prosecution under the health and safety legislation. He had to show that the law prohibited occupation either because the law said he could not occupy in the circumstances as they prevailed, or that the necessary effect of a prohibition or enforcement notice was to prohibit him from occupation. The obligation of the owner, as an employer, to remedy the condition of the property or as a landlord to require the tenant, as an employer, to do so did not constitute a prohibition of occupation by law. Nothing less than a prohibition from occupation would suffice to create the exemption (see [29]-[31] of the judgment).

Properly construed, the health and safety legislation did not prohibit occupation and the risk of breach of the legislation if the premises had been, without more, occupied did not suffice to exempt the appellant. Further, the appellant’s argument required the assumption that occupation, of itself, would amount to the commission of a criminal offence. That assumption was not justified. With respect to the second question referred, it was not appropriate to express a concluded opinion upon the issue whether occupation of the properties specifically for the purpose of storage would disentitle the appellant’s claim for exemption when the judge himself had not done so (see [30], [31], [34] of the judgment).

For reasons which differed from those of the judge, he had been correct in law and the first question would be answered in the affirmative (see [33] of the judgment).

Tower Hamlets London Borough Council v St Katherine-by-the-Tower Ltd [1982] RA 261 applied; Regent Lion Properties Ltd v Westminster City Council [1990] 2 EGLR 175 applied.

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