Case Law
Lord Herschell LC: My Lords, the Court of Appeal were of opinion that the effect of the deed was to convey to the respondent company an easement only. If this view be correct, I think there can be no doubt that the conclusion that the respondent company are not rateable necessarily followed. In the Court of Appeal it was, I gather, argued on behalf of the present appellants that the ownership of the tunnel was by the deed of grant conveyed to them. In consequence, probably, of the line of argument adopted, the case appears to have been treated by the learned judges as one in which the only alternative views were ownership or easement. I do not think this is so. No doubt, if it could be shown that the respondent company were the owners of the tunnel, this would negative the idea of their being entitled merely to an easement, and being owners they would, prima facie, be the occupiers; they would be so regarded unless the occupation were shown to be in some one else. But even if it be established that on the true construction of the deed they are not owners, it does not follow that they were possessed of an easement only and were not occupiers.
There may be occupation without even the existence of the relation of tenant towards the owner of the property. And I think land may be occupied for the purpose of and in connection with the enjoyment of an easement in such a manner as to make the person so occupying liable to be rated. I will refer later on to the authorities which appear to me to support this view. I shall now carefully examine the terms of the grant, as I think the decision of this case turns almost entirely upon what were its nature and effect. It grants, first,
"all such easements in and through and right of drainage through and other and exclusive rights of using (but subject nevertheless and except and reserving as hereinafter mentioned) the Halkyn Deep Level hereinbefore described and shown on the said plan by the colours black and pink as may be necessary or convenient for the purposes of the said Act or of the said company's undertaking or any of such purposes together with power from time to time to uphold maintain cleanse repair scour deepen widen straighten alter enlarge divert and improve the said Halkyn Deep Level when and to such extent as may be necessary or convenient for the purposes of the said Act or of the said company's undertaking."
It further grants "full right and liberty at any time and from time to time hereafter to make form construct maintain and exclusively use (but subject nevertheless and except and reserving as hereinafter mentioned) under or through any land within the said area No. 1 of which the said Duke is legal tenant for Ms own life or of or to which he is seised or entitled for any greater estate tunnels in continuation of or in connection with the said Halkyn Deep Level as now existing and shown on the said plan by the colours black and pink and the limit of which land towards the south is shown by a line on the said plan and to make construct execute and do all such works and things as shall be necessary or convenient for that purpose."
Then follow the words, "and such easements" etc. in precisely the same terms as in the first grant.
It will be seen that both these grants are made subject to, and there is excepted and reserved from them, what is afterwards mentioned. These exceptions and reservations seem to me to throw much light upon the effect of the grant, and upon the question whether all that passed By it to the drainage company was a mere easement.
In the first place, there is excepted and reserved to the Duke "all lead and lead ore which in making or extending the tunnels and works shall be found discovered or gotten."
Next, there is reserved to the Duke and his assigns "the right to use the Halkyn Deep Level and the tunnels to be made as aforesaid for searching for and working the mines and beds of lead, lead ore and blende which can conveniently be sought for obtained and gotten by communications with or otherwise by means of the said Halkyn Deep Level and tunnels or any of them respectively or any part or parts thereof respectively and for removing though or by means of the said Halkyn Deep Level and tunnels or any of them respectively or any part or parts thereof respectively and through or by means of any shafts levels and drifts in use by the said company all lead ore and blende which may be so obtained and gotten and all debris and waste materials necessary or convenient to be removed in searching for obtaining and getting such lead, lead ore and blende."
If all that was intended to be granted was an easement to allow the drainage water to pass along the tunnels, and the possession of the tunnels remained in the Duke (which is the hypothesis contended for by the respondents), it is difficult to understand how these rights, which the Duke was to have in relation to the tunnels, were treated as exceptions and reservations out of and from the grant to the drainage company, and were conferred upon the Duke in the manner in which they have been by the deed.
And the matter does not stop there, because in a subsequent part of the deed there is a covenant by the drainage company in the following terms:
"And also will from time to time and at all reasonable times permit and suffer the said Duke and his assigns or the owner or owners for the time being of the lands shown on the said plan of which the said Duke is legal tenant for his own life or of or to which he is seised or entitled for any greater estate and his and their agents and surveyors to go down dial and measure all and every or any of the said Halkyn Deep Level and tunnels and shafts and other works of the said company at all convenient times and for that purpose to make use of all machinery in and about such works he or they not unnecessarily obstructing or interfering with the user of the said level tunnels shafts and works for the purposes of the said company's undertaking or obstructing or hindering further than need shall absolutely require the said company their successors or assigns or their servants in the prosecution of any of their works or operations."
If the company were to have an easement only, and were not to be in possession of the tunnels and works which they constructed, and the Duke was to remain in possession of them, it is difficult to understand why a covenant should be taken to "permit and suffer the Duke to go down dial and measure the tunnels and shafts."
It is true that the first grant confers such exclusive rights of using the level as may be necessary or convenient for the purposes of the Act, but they have power to enlarge and divert the level, and for that purpose to enter upon the Duke's lands which adjoin, or are near to, the level. With regard to the new tunnels, as I have already shown, in addition to the grant of easements and exclusive rights, full right is given to make and exclusively use the tunnels, subject only to the exception or reservation in the Duke's favour.
The exceptions are followed by a proviso that the rights under the exceptions and reservations hereinbefore contained shall not be used or exercised so as to obstruct, hinder, delay, or interfere with the prosecution by the said company of any works or operations of the said company under the authority of these presents, or for the purposes of the said Act, or of the said company's undertaking, or to the damage, injury, or prejudice of the said level tunnels and shafts, or any other works of the said company, or so as to obstruct or interfere with the free flow of water through the said level or any of the tunnels and levels of the said company, or with the user for the purposes of the said Act or of the said company's undertaking of the said level or any of the tunnels, levels, and works of the said company.
And this is not all. It is also provided that the rights under the exceptions and reservations contained in the deed shall not be exercised or exercisable except subject to the provisions of the Act and such bylaws allowed in manner provided by the Act as shall for the time being be in force. The Act, by s. 45, makes it unlawful for any person without the written consent of the company first had and obtained, and then only subject to such conditions and regulations as should be prescribed by the company, "to make or form any communication to or with the tunnels and levels or other works of the company." So that it is clear that the Duke can have no rights in respect of the tunnels except those expressly reserved to him by agreement in the deed of grant. By s. 46 of the Act the company are authorised to make bye laws for the protection of their works and "for preventing the flow, escape, or percolation of water by any means inconsistent with those prescribed or provided by the company."
My Lords, it seems to me clear, therefore, that with regard to these tunnels the rights of the respondents are paramount, and those of the Duke are subordinate to them. Upon a careful consideration of the terms of the deed of grant I am unable to adopt the conclusion that it conferred upon the respondents an easement or rights in the nature of an easement only. I think that it gave them the possession of the tunnels of which they thus have the exclusive use for the purposes of drainage, and that such rights as remained in the Duke were only those expressly reserved to him and which were subordinate to those possessed by the company. If the possession thus became theirs, it is quite immaterial to my mind for the present purpose whether they became the owners or not.
Along the tunnel for a considerable distance the company have placed iron tubing; in parts they have placed brick arches; it seems to me that in these parts they occupy land precisely in the same sense as a water company does by its pipes or a tramway company by its rails, or a telephone company by the supports for its wires.
As to those parts of the tunnel which are so occupied, I can see no substantial distinction between the present case and those in which it has been held that water companies, tramway companies, and telephone companies are rateable. But even as to the part where there is no tubing or arches, I think the respondents are in possession. They may at any time place such works in any parts of the tunnel that they please, and, as I have already pointed out, it rests with them not only in the first instance to determine the direction of the tunnel, but at any time they please to divert it and alter its direction. The question whether a person is an occupier or not within the rating law is a question of fact, and does not depend upon legal title. The person legally possessed may not occupy. On the other hand, a person may be occupier either with or without the consent of the owner.
In R. v. Chelsea Waterworks Co., a water company to whom the Crown granted the right to lay down their pipes were held by the Court of King's Bench to be occupiers of land and liable to be rated.
In the case of the Pimlico Tramway Co. v. Greenwich Union, a tramway company was held liable in respect of the occupation of the road by their tramways. They were certainly not the owners of any part of the road; they were merely authorised to lay down the rails thereon. The only right which they possessed was an exclusive right of using those rails by carriages with flanged wheels; the public retained the right to pass over them and use them in any other way. The company were, nevertheless, held liable to be rated.
In the case of Lancashire Telephone Co. v. Manchester Overseers a telephone company were held liable to be rated in respect of their wires and poles where the wires were attached to the roofs or walls of houses by the permission of the occupier, who, nevertheless, retained complete control of the building, so that the company could only obtain access to the roof by his permission.
LINDLEY LJ said:
In the present case, for the reasons I have given, I think that the respondents, and not the Duke, were the occupiers of the tunnels and works for rating purposes.
It was strongly contended, on behalf of the respondents, that they could not be liable to be rated, inasmuch as they were not in exclusive occupation. There are many cases where two persons may, without .impropriety, be said to occupy the same land, and the question has sometimes arisen which of them is rateable. Where a person already in possession has given to another possession of a part of his premises, if that possession be not exclusive he does not cease to be liable to the rate, nor does the other become so. A familiar illustration of this occurs in the case of a landlord and his lodger. Both are, in a sense, in occupation, but the occupation of the landlord is paramount, that of the lodger subordinate.
In the present case, in my opinion, on the true construction of the deed, the possession of the respondents is paramount, and any rights which the Duke has are subordinate. The respondents alone have the right of using the tunnels for the primary purpose for which they have been constructed. The Duke has no such right, and, in my opinion, the respondents are in occupation of the tunnels and works.
A question was raised with regard to a tramway which has been laid down along a part of the tunnel for the purpose of carrying minerals and other materials. It is not necessary to consider whether the occupiers of this tramway could be separately rated in respect of it. The fact that its construction and use are permitted does not, in my judgement, prevent the respondents being in occupation of the land.
I arrive at the conclusion I have indicated, differing as it does from the Court of Appeal, with the less hesitation, inasmuch as the contention before them appears to have been, on the one side, that an easement only was granted; on the other, that the respondents were owners of the tunnels and works. The view which was presented to your Lordships, that the respondents might be in occupation of the land even though the purpose for which it was to be used was in the nature of an easement, does not appear to have been before them. No reference was made to the works they had actually constructed in the tunnels, or to the cases which I have cited, which seem to me to have so direct a bearing upon the question to be determined.
I think the judgement of the Court of Appeal should be reversed, and the judgement of the Queen's Bench Division restored, and that the respondents should pay the costs here and in the courts below.
Lord MACNAGHTEN:My Lords, if it had not been common ground that the possession of the Halkyn District Mines Drainage Company was in conformity with their documentary title it would, I think, have been more than doubtful whether the Court of Appeal were right in treating the question before them as a question of construction. Liability to rates is not a matter of title. The question in each case must be whether there is in fact such an occupation as, according to the Statute of Elizabeth and a course of decisions which have been recognised and established as law, carries with it liability for rating purposes. In the present case, however, it is not suggested, on the one hand, that the possession of the company is greater, or, on the other hand, that it is in any respect less than the possession authorised by the Act of Parliament and the deed of grant. And therefore I think it is sufficient, as it certainly is convenient, to limit the inquiry to the consideration of the question, what were the rights conferred upon the company, taking for granted that whatever was conferred has been actually enjoyed. But then it is necessary to consider both the Act of Parliament and the deed; and the Act is, I think, not the less important of the two.
The learned judges of the Court of Appeal, confining their attention to the deed and scarcely noticing the Act of Parliament, have held that nothing passed but a mere easement. If that were the true view, there would be no liability to rates. But I cannot help thinking that the company acquired much more than a mere easement or a mere right of passage for the water which it was their object and their duty to clear off. The Halkyn District Mines Drainage Act, 1875, incorporates the company for the purpose of making and maintaining the tunnels or adit levels and other works therein mentioned, and it expressly authorises the company to make use and maintain the said tunnels or adit levels with all proper shafts works and conveniences connected therewith, and to enter upon take and use or (at their option) to purchase and take an easement in through over or under or right of using such of the lands delineated on the deposited plans and described in the books of reference as might be required for that purpose.
The Act proceeds to describe the authorised tunnels, one of which was to join an existing tunnel called the Halkyn Deep Level, which communicated with an open cut, or water course, running into Nant y Flint Brook: and it authorises the company, for the purposes of the Act, to purchase, lease, or otherwise acquire by compulsion or agreement the Halkyn Deep Level and the said open cut, or water course, "or an easement in through or over or right of drainage through or other right of using the same."
Then follows a section which seems to me to have some bearing on the question before your Lordships: it is s.8. It authorises the company, in the event of their acquiring the Halkyn Deep Level and the said open cut or water course, or "any such easement or right as aforesaid," from time to time to deepen, widen, alter, divert, and improve the same. It will be observed that the statutory powers of the company in this respect are precisely the same whether they do or do not acquire any proprietary right in the soil.
The same observation applies to other provisions of the Act. Section 45 provides that without the written consent of the company, and then only subject to such conditions and regulations as shall be prescribed by the company, no communication shall be made to or with the tunnels and levels, or other works of the company. Section 46 empowers the company to make bye laws for the protection of their works for the protection of their rights under the Act, and for preventing the flow of water by any means inconsistent with those prescribed or provided by the company. These provisions are general and not dependent on the acquisition by the company of any proprietary right in the soil.
It is only necessary to add that the Act empowers the company to make extensions to their works on acquiring by agreement such land or such right in, through, or over such land as may be required for the purpose, and that in consideration of their services, the company are authorised to levy certain " royalties " within the drainage district.
The position of the company was therefore defined and assured by the Act subject to their acquiring either such interest in the land, or such rights in, through, or over the land, as might be required for the construction of their works. For all practical purposes the position of the company in regard to their authorised works was to be the same whichever of the two alternatives might be adopted.
Such being the effect of the Act the company having made some progress with the proposed works the Duke of Westminster, who was the statutory owner of the land within the drainage area, made a grant to the company on the 14th of December 1882. So far as the present question is concerned, it may be taken that the company did not acquire any proprietary interest in land. Subject to certain reservations, the effect of which will be considered presently, the Duke granted to the company all such easements in and through and right of drainage through and other and exclusive rights of using the Halkyn Deep Level, the open cut or water course, and any tunnels that might be constructed within the drainage area in continuation of, or in connection with, the Halkyn Deep Level as might be necessary or convenient for the purposes of the Act or of the company's undertaking or any of such purposes. Now, putting aside for a moment the reservations contained in the deed of grant, can there be any doubt as to the position of the company for rating purposes as regards their authorised works? The numerous cases relating to gas companies, water companies, and tramways, place the matter beyond question. To borrow the language of WIGHTMAN J., in the case of R. v. West Middlesex Waterworks, the company are de facto in possession of the space in the soil which their drainage works fill for a purpose beneficial to themselves. It is immaterial here, as it was there, that the company have no proprietary interest in the soil.
I now come to the reservations contained in the deed of grant. They are three in all. First, there is a reservation of certain mineral substances which might be found in the course of making or extending the works. That reservation cannot affect the present question. Then there is a reservation of the use of the drainage works for the purpose of searching for and working mines, and carrying away ore and waste materials. Lastly, there is a reservation of the use of two specified shafts, the use of which had been granted to the company, and any other shafts which might be made or used by the company.
The material reservation is the second. That reservation, if it were unqualified and unlimited as regards the use reserved, might, no doubt, interfere with the operations of the company. But then we find an express proviso and declaration to the effect that the rights under the reservations contained in the deed of grant shall not be used so as to interfere with the operations of the company under the authority of the deed or for the purposes of the Act or of the company's undertaking, or with the user for the purposes of the Act or of the company's undertaking of the drainage works of the company, and that the rights under the reservations contained in the deed shall not be exercised or exercisable except subject to the provisions of the Act and the company's bye laws for the time being in force.
It is therefore perfectly clear that the rights reserved by the Duke were intended to be and in fact are secondary, inferior, and subordinate to the rights of the company under their Act. If there is any likelihood of a conflict, the rights reserved by the Duke must give way. The rights of the company are paramount. The company have the sole and exclusive right of using their drainage works so far as those works may be required for the purposes of their undertaking. The deed of grant was not, I think, meant in the slightest degree to derogate from the statutory rights of the company. While it enables the company to avail themselves of those rights, it merely reserves for the use of the Duke certain rights and facilities qualified and limited in such a manner as to prevent the possibility of their ever coming into competition with the statutory rights of the company.
It appears to me that under these circumstances such rights of user as are reserved by the Duke no more negative the occupation of the company for rating purposes than the presence of a lodger interferes with the rateability of the householder.
I am, consequently, of opinion that the company are liable to be rated in respect of their occupation for their drainage works, and that the judgement of the Court of Appeal ought to be reversed.
Lord DAVEY: My Lords, it would appear from the judgements delivered by the learned judges in the Court of Appeal that the point to which their attention was directed was whether the drainage company had any right of ownership in the tunnels and water course in question in the case, or had only an easement or incorporeal right over them, and their decision was against the overseers, the present appellants, on the ground that the company were not owners, but had a mere easement. It may be, as Sir Richard Webster suggested, that the course which the argument had taken before the Court of Appeal is the explanation of the reasons for the judgement taking that form.
My Lords, I agree with the learned judges in the Court of Appeal that the drainage company are not owners of the soil of the tunnels or watercourse. But that does not seem to me conclusive on the question of their rateability in respect of their occupation. The right of the company may be an easement or incorporeal right; but the easement may be of such a character as requires the occupation of land for its exercise, and confers upon the company a right to occupy land during its continuance. According to a long course of authority, the occupation of land under such circumstances is sufficient for rating purposes, though unaccompanied by ownership of any portion of the soil. The law was thus stated by WIGHTMAN J. in R. v. West Middlesex Waterworks: "In this case," says the learned judge, "the first question is whether the company are rateable for their mains, which are laid under the surface of the highway, without any freehold or leasehold interest in the soil thereof being vested in the company. We think they are. These mains are fixed capital vested in land. The company is in possession of the mains buried in the soil, and so is de facto in possession of that space in the soil which the mains fill, for a purpose beneficial to itself. The decisions are uniform in holding gas companies to be rateable in respect of their mains, although the occupation of such mains may be de facto merely, and without any legal or equitable estate in the land where the mains lie, by force of some statute."
In one of the earliest cases, R. v. Chelsea Waterworks Co., the waterworks company were held rateable in respect not only of pipes laid underground, but of a reservoir in the Green Park which had formerly been a pond and was used by the company as part of their works under a revocable licence from the Crown. The same principle has been applied in Cory v. Bristow in this House, to moorings in the River Thames, maintained there under licence from the Conservators; and in the recent cases of Pimlico Tramway Co. v. Greenwich Union and Lancashire Telephone Co. v. Manchester Overseers, to a tramway laid on a public road, and telephone wires suspended on the chimneys of buildings in a town.
The question whether the company sought to be rated are owners of the soil may be very material in some cases in determining whether they are in occupation or are merely enjoying the same rights as the general public, or a number of other persons, as was held in R. v. Mersey and Irwell Navigation Co.,and recently in this House in Doncaster Union Assessment Committee v. Manchester, Sheffield, and Lincolnshire Rail. Co. But, after all, the real question is not whether their rights are corporeal or incorporeal, but whether the company is de facto in occupation of some portion of the soil.
I need not state again the facts of this case; but, looking at the description of the works in the special case, I cannot doubt that the company occupy, with their tunnel, the portion of ground in which the tunnel is constructed, and also those portions which are enclosed within the tunnel, and used by the company for the purpose of their undertaking. And I also think with COLLINS J. that they have a similar occupation of that portion of their works which consists of an open cut or water course. I am further of opinion, looking at the provisions of the company's Act of Parliament, that such occupation and right of user was necessary for the execution by the company of the purposes of the Act, and I think it was conferred on the company by the deed of grant from the Duke of Westminster.
But then it is said that the occupation is not exclusive, inasmuch as the Duke of Westminster has reserved certain rights to himself and his licensees over the tunnels and water course, and in pursuance of such reserved rights the Halkyn Mining Company have laid a tramway along one of the tunnels and have placed ventilating pipes there. Two questions arise: what is meant by exclusive occupation when used in connection with the subject of rating? And, what are the conditions subject to which the Duke exercises his reserved rights? It is clear that exclusive occupation does not mean that nobody else has any rights in the premises. The familiar case of landlord and lodger is an illustration. The cases show that if a person has only a subordinate occupation subject at all times to the control and regulation of another, then that person has not occupation in the strict sense for the purposes of rating, but the rateable occupation remains in the other, who has the right of regulation and control. This was so held in Smith v. St. Michael, Cambridge Overseers, in London and North Western Rail Co. v. Buckmaster,and in the recent case of Rochdale Canal Co. v. Brewster. As I took part in the decision of the latter case in the Court of Appeal I will not repeat what was said in the judgements. See also the judgement of Lord BLACKBURN in Cory v. Bristowin the Court of Appeal.
It is necessary in cases of apparent joint occupation to consider what degree of right each party may have in the premises. In the present case your Lordships will find on reference to the deed of grant of the 14th of December 1882 that it purports to grant such exclusive rights of using as may be necessary for the company's statutory purposes, but subject and except and reserving as thereinafter mentioned. On page 47 of the Appendix your Lordships will find the reservation to the Duke. It is (1) of all lead, ore, or blende; (2) the right to use the Halkyn Deep Level and other tunnels for working and removing the reserved minerals; (3) a right of user (which is expressed to be subsidiary to the right of user by the company) of any shafts made by the company on payment of a contribution to maintenance and repair; and the reservation is subject to a proviso that the reserved rights shall not be used so as to interfere with the company's operations, and shall not be exercised except subject to the provisions of the Act, and such bye laws allowed in manner provided by the Act as shall for the time being be in force.
If your Lordships now turn to the Act you will find that by s. 45 it is made unlawful for any person without the written consent of the company, and then only subject to such conditions and regulations as shall be made by the company, to make any communication with the tunnels or levels or other works of the company. And by sect. 46 the company is empowered to make bye laws for the protection of the works of the company and other purposes.
In these circumstances I have no difficulty in coming to the conclusion that the exercise by the Duke and his tenants and licensees of the rights reserved to them is subordinate to the occupation of the company for the purposes of their undertaking, and does not confer on the Duke's tenants or licensees such an occupation as prevents the occupation of the company being exclusive in the sense in which I have used that expression. Consequently, I am of opinion that the company has a rateable occupation, and that the order of the Court of Appeal should be discharged and the order of the Divisional Court restored.
Lord Denning M.R.: The Bexley Congregational Church owns a house, no. 259 Upton Road, Bexley, It uses it to house its minister. The house was occupied as a residence by the minister from 1966 until July 30, 1969. That minister was then posted elsewhere. The house was empty until July 2, 1970, when a newly appointed minister took up residence. So it was empty for 11 months. During this period the church held the house available as a residence. The question is whether or no the church is liable to pay rates in respect of the time when the house remained empty. The justices for the Bexley Division held that the church was liable to pay rates, but they stated a case for the opinion of the court. The Divisional Court [1972] 1 QB 348 affirmed the decision of the justices. Now the church appeals to this court. If this had come up for consideration before 1967, the one question would have been this: Was the church in "occupation" of the house during the 11 months when it was empty but being held available for a minister? If the house was in the "occupation" of the church, then the church would be liable to pay rates upon it, but, being a charity, it would only have to pay one-half of the amount otherwise chargeable: see section 8 of the Rating Act 1955 and Glasgow Corporation v. Johnstone [1965] A.C. 609. But if the house was not in the occupation of the church during those 11 months, then prior to 1967, the church would not be liable to pay any rates for that period: because rates were only payable on premises that were occupied. They were not payable on unoccupied premises. In 1967, however, Parliament for the first time enacted that rates were to be paid on unoccupied property: but, whilst unoccupied, only one-half was payable. This was enacted by section 17 of the General Rate Act 1967 and Schedule 1. Parliament made exceptions however, even to that half liability. It gave total exemption to certain premises which are specified in paragraph 2 of Schedule 1. In particular it said in paragraph 2(f) that no rates at all should be paid for any unoccupied house for any period during which "the hereditament is held for the purpose of being available for occupation by a minister of religion as a residence from which to perform the duties of his office." This house at Bexley certainly fulfilled paragraph 2(f) during the 11 months when it was empty. It was held available for the next minister. It would seem, therefore, that the church was not liable to pay any rates at all on the house. How then have the Divisional Court escaped from paragraph 2(f)? They have done so by holding that during those 11 months this house was not unoccupied. It was "occupied" by the church. They said that "during the 'held available' period" the premises in this case would under the old law have been treated as occupied for rating purposes: see [1972] 1 QB 348, 356. Being "occupied," the house qualified for relief in the period that it was occupied by a charity (see section 40 of the General Rate Act 1967) and was only liable to pay half rates. But it did not qualify for total exemption under paragraph 2(f) of Schedule 1 because that only applied to unoccupied premises. The ultimate question is therefore: during those 11 months was the house occupied by the church? or was it "unoccupied"? The Divisional Court said it was "occupied," relying on Gage v. Wren (1902) 87 L.T. 271 and R. v. Melladew.. In Gage v. Wren a seaside boarding house (which was left empty in the winter apart from a little furniture) was held to be in occupation all the year round. In R. v. Melladew a warehouse (which was being held available for use whenever there were enough goods) was held to be in occupation. While those two cases were, no doubt, rightly decided, they have to be read nowadays in the light of Associated Cinema Properties Ltd. v. Hampstead Borough Council [1944] K.B. 412. In that case a company during the war took accommodation and kept the premises empty. Their intention was to use them in case they were bombed out of their other premises. It was held that they were not in occupation. This court stated in terms, at p. 416, that "a mere intention to occupy premises on the happening of a future uncertain event, cannot, without more, be regarded as evidence of occupation." That case shows that when premises are left vacant, a mere intention to occupy them in the future does not constitute occupation. There must be something more, such as furniture left on the premises or some use being made of them. Applying this principle, on the facts stated in the case, I think that under the previous law there was no occupation by the church: and it would not have been liable before 1967 to pay any rates at all. Once the house is held to be unoccupied during those 11 months, it comes clearly within the total exemption provided by paragraph 2(f) of Schedule 1 which I have read. That sub-paragraph covers this case completely. It is a specific provision saying that although this house is unoccupied and would prima facie be liable to pay half rates, nevertheless as this house is being held available for a minister of religion, it is exempt altogether. It is exempt even from paying half rates. We have had some discussion on section 40 of the General Rate Act 1967 and particularly subsection (9). That section is dealing with premises that are occupied, not premises that are unoccupied. It gives to charitable organisations relief up to half the rates when the hereditament is occupied by a charity and wholly or mainly used for charitable purposes. Subsection (9) deals with houses which are occupied by a minister or are occupied (by the presence of furniture there) whilst being held available for a minister. It provides that it shall be regarded as occupied by a charity and wholly or mainly used for charitable purposes. That section applies only to occupied premises. It does not apply to an unoccupied house. Such a house, whilst being held available for a minister, falls precisely within Schedule 1(f). This interpretation gives a sensible meaning to paragraph 2(f) of Schedule 1: whereas the Divisional Court found it difficult to explain its presence. I think paragraph 2(f) is enacted expressly to give exemption altogether to such a case as the present. It is unoccupied. The church is not liable even to half rates because it is being held available to a minister. I would allow the appeal accordingly.
Megaw LJ I agree. With great respect to the Divisional Court, I think the presence of sub-paragraph (f) in paragraph of Schedule 1 to the General Rate Act 1967 is conclusive of the issue which here arises. I agree with the proposition put forward by Mr. Dawson on behalf of the ratepayer, that by reason of the inclusion of that paragraph, it is clear that Parliament contemplated that premises can be unoccupied for rating purposes despite the fact that they are being held for the purpose of being available for occupation by a minister of religion as a residence from which to perform the duties of his office. On the facts as found in the case stated. that seems to me to be conclusive in favour of the ratepayer.
Stamp LJ I agree. Section 40 (9), which is a relieving section, and upon which reliance was placed in the Divisional Court, is in the nature of a definition section or a section expository of the language of section 40, and only applies for "the purposes of this section." It can in my view have no effect in determining whether a particular person is or is not in occupation for the purposes of other sections of the Act.
Appeal allowed with costs in Court of Appeal and below on common fund basis.
Case remitted to justices with order to quash.
VAUGHAN WILLIAMS LJ : It is stated in the special case that it was admitted that the corporation were in occupation of the 306 acres of plantations and nursery, but they claimed that they were not in occupation of the 859 acres of moorland, and so were not rateable in respect of that part. I agree with the Divisional Court and with the other members of this court that the corporation are in rateable occupation of the 859 acres. I assume, in accordance with the observations of Lord ATKINSON in Winstanley v. North Manchester Overseers, that, although the ownership of a hereditament does not necessarily imply occupation for the purpose of rating, and although a person or company may be an occupier within the meaning of the statute of Elizabeth who has no proprietary interest in the soil, as was decided in Holywell Union v. Halkyn Drainage Co., yet owners in possession are prima facie occupiers "in possession" there does not mean physical possession, it means who are in possession by title unless it be shown that the occupation is in some one else: see Per BULLER J. in R. v. London Corporation.
In the present case there is no contention that any other person in fact occupies. Prima facie, therefore, the corporation are in occupation, and the question is, has this prima facie inference been displaced, and if so, how?
I think, for the reasons given in the Divisional Court and in the judgements of my brethren, which I have had the opportunity of reading, the prima facie conclusion has not been displaced. The principal part of the argument against this conclusion was based upon the proposition established by, amongst other cases, the case of R. v. St. Pancras Assessment Committee (1876) 2 QB 581, that a vacant house and I think it covers vacant land is not occupied for rating purposes. We were invited to draw certain inferences of law in this case from that decision, and the other decisions upon the same lines, and the well established practice that a vacant house, and, as I say, vacant land, is not the subject of rating. We were asked to say in this case that, inasmuch as the moorland, at all events, was purchased by the corporation, not for the purpose of occupation, but for the express purpose that it should not be occupied, we ought to apply the rule established in respect of vacant houses to this vacant land.
If I had to give a reason why we do not draw the inference which we are invited to draw, I should say that it appears to me, upon looking at the cases, that the only way to accept the principle which is applied to vacant houses as part of the law of rating is that, for convenience or some other reason, it has been determined by what I will call judge made law that houses shall be excepted from the general rule; but I think that, when one reads the recent decisions, especially the decisions in the House of Lords which I have just quoted, it is impossible really to avoid the conclusion that, however firmly established this law as to the non rateability of owners of vacant houses may be, it is a special exception, and one must not draw any logical conclusions from it; it is a decision of practical convenience, which negatives, to my mind, the right or duty to draw practical conclusions therefrom. I agree, if one had to draw such conclusions in this case, that there is a great deal to show that this was vacant land, just as much as the houses were vacant in the various cases in which it has been decided that vacant houses should not be rated.
I have now to deal with the question of the proper mode of assessment in respect of the 306 acres of plantations and nurseries.
The special case tells us that the court of quarter sessions decided that these should be assessed under s. 4 of the Rating Act of 1874 at 2s. and 15s. per acre. But this decision of the quarter sessions was on the assumption that the corporation were not in rateable occupation "of the said land," that is, the whole 1165 acres, "with the exception of the parts used by them for plantations and nurseries." Now that this assumption has been negatived both by us and by the Divisional Court it follows that the question of fact to be decided by the court of quarter sessions, i.e...., the question of value and mode of assessment, is entirely different, but in my judgement the assessment and value ought still to be decided by the court of quarter sessions and should be sent back to them to decide.
It may be that the occupation of the plantations and nurseries may be such that they could easily be let from year to year. No evidence is before us on this point, and, on the finding by quarter sessions that the 859 acres were not occupied for rating purposes by the corporation, the above question of fact did not arise. It is argued that the question of fact ought not to be sent back to quarter sessions because the order of the Divisional Court, as amended and drawn up after the hearing, finds that the corporation were in rateable occupation of the whole of the 1,165 acres of land in the said case mentioned, and, that being the opinion of the court, the second and third questions put in paragraph 14 of the case stated
"are immaterial questions, if and so far as the said plantations and nurseries are part of the gathering ground."
That is a quotation verbatim from the order. But the order goes on to say, and this again is a verbatim quotation,
"but, if and so far as the said plantations and nurseries are not so part, the court is of opinion that the plantations and nurseries not so part as aforesaid should be assessed under s. 4 of the Rating Act, 1874, at 2s. per acre and 15s. per acre respectively, and that the price paid by the appellants for the gathering ground was no evidence of the rateable value of the land used for the plantations and nurseries."
This part of the order plainly contemplates that quarter sessions will consider these questions, and so do the judgements of the Lord Chief justice and HAMILTON J. at pp. 1070 and 1075.
I have only to add that, in my opinion, the application of the measure of the interest upon the price paid does not generally apply to property which in its condition can be let from year to year. It is for the quarter sessions to decide on evidence whether that is the case with these plantations and nurseries. The application of the measure of interest upon the price is a question of fact to be determined by quarter sessions. Nobody doubts but that the price is an element which may or must be taken into consideration, but the extent to which it must be taken into consideration must be determined by the quarter sessions: see the case of Great Central Rail. Co. v. Banbury Union.
I think the result of this judgement is that first we ought to add that direction in terms to our judgement when we send back the case to the Court of quarter sessions, and I think also that, inasmuch as the main question fought before us was the question whether there was rateable occupation, and that argument largely turned upon the question as applied to the moorland, and as the corporation have lost as to that Which was the main feature of the argument, this appeal ought to be in terms dismissed with costs, of course subject to the directions I have mentioned.
Buckley LJ: The order of the Divisional Court remits the case to the court of quarter sessions with an expression of opinion that the corporation are in rateable occupation of the whole of the 1165 acres. In my opinion this is right. The only question here is whether the corporation are in rateable occupation of the 859 acres, part of the 1165 acres. In my opinion they are. The best summary that I know of the law as to what constitutes occupation is to be found in the words of LUSH J. in 1877 in R. v. St. Pancras Assessment Committee (1876) 2 QB 581
"Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a )ring trespass is necessarily in occupation. But it is an authority for the proposition that a person who can bring trespass and who is receiving profit or benefit from the property is in occupation if no one else is. The fact that the alleged occupier is not physically upon the property either in person or by works done or chattels placed upon the property is not necessarily the test. There are many cases in which the occupier has no need to go, and does not go, upon the land. Take, for instance, the case of growing underwood which is cut only after the lapse of many years: R. v. Mirfield (Inhabitants); or the case of growing crops or fruit trees, where for many months in the year the occupier has no occasion to go, or would do harm if he did go, upon the land. Where the alleged occupier is a recent purchaser, one test is whether, being the owner and having put no other person into possession, he has such use of the land as it is reasonable to infer that he intended to obtain when he bought it, that use being one which constitutes a benefit to him, not in the sense that he makes a profit by it, but in the sense that the occupation is of value to him: London County Council. v. Erith and West Ham A.C). Are the corporation using the land for the purpose of their business or adventure and deriving benefit from it? If so, then their case is similar to that of the warehouseman in R. v. Melladew or the owner of the empty building kept ready for occupation in case of emergency in Borwick v. Southwark Corporation. An owner who retains property in hand, and gets benefit from it, is rateable to the extent of that benefit (per BLACKBURN J. in Hartey v. Salford Overseers). The amount of the rate is controlled, no doubt, by the use to which the owner puts the land: R. v. St. Luke's Hospital.The property is rateable as it is, not as it might be made, but this is a consideration which goes not to rateability but to quantum of rate.
These being the principles which in my judgement govern the matter, the facts are these. The corporation before they bought this land enjoyed the natural flow of the water from the ground, but they enjoyed it subject to two contingencies, each of which would be to their detriment, namely, first, that a resident population might come upon the land and thus render impure the water, which previously was pure, and, secondly, that such a resident population might consume the water and diminish the supply. They bought the land for the purpose of excluding those dangers. It was worth their while to pay a large sum of money for the land to ensure the absence of a population which might (a) contaminate or (b) consume. They have put no other person in occupation. They are enjoying the benefit for which they bought the land. Further, by the demise of the sporting rights they are deriving profit from the land being left free of population. Their purpose, which is to ensure absence of population, is thus in several ways of value to them. They are persons capable of maintaining trespass:they are enjoying a benefit from the land.
In my opinion the conjoint effect of those two facts is to constitute rateable occupation. There is a second question in the case, namely, whether the price paid by the corporation for the gathering ground is any evidence of rateable value. In my opinion it is. In looking for the hypothetical tenant the corporation is to be regarded as within the class of persons to be considered. If they did not own this land, they might wish to rent it for the purposes for which they bought it. What would it be worth their while to pay as rent? It was worth their while to pay a sum whose annual value, had it been invested, would have been so much. They have forgone that annual income as the price of having the land. Had they rented instead of buying, that annual sum is some evidence of the amount which it was worth their while annually to pay. In the absence of better evidence, the price paid is, I think, evidence to be regarded. As I read the order of the Divisional Court it has answered the third question in the special case only as regards the plantations and nurseries if and so far as they are not part of the gathering ground. The order contemplates two events.
In the first, which is the material one, it states the third question to be immaterial. In the second it answers the question. It is impossible that the answer at the end of the order can be intended to refer to the case in which the question is said to be immaterial. The whole of the 1,165 acres being, in my judgement, part of the gathering ground, the hypothetical answer which the Divisional Court made to the question does not arise upon the appeal, but, as the question as a general question may arise before the quarter sessions, I have expressed my opinion upon it as above stated. In my judgement the appeal fails and should be dismissed with costs.
KENNEDY LJ: Upon the principal matter of contention between the parties to this appeal, namely, whether the Liverpool Corporation, the owners of the 1,165 acres, are liable to be rated as occupiers in respect of any part of this area, except the 306 acres used by them for plantations and nurseries, as to which the corporation admit liability to be rated under s. 4 of the Rating Act, 1874, I have, upon the whole, come to the conclusion that the assessment committee, the respondents in this court, are entitled to hold the judgement which they obtained in the Divisional Court. The question of their rateability except in regard to the 306 acres, is, I think, upon the rather peculiar facts of the present case not an easy one to answer. I find a difficulty in satisfactorily reconciling all the judicial authorities, many of which were cited to us, in regard to the liability of owners of land who do not, as the word " occupation " is commonly understood, occupy their possession themselves, but who do, at the same time, prevent other persons from occupying it or entering upon it. We have the opinions of Lord MANSFIELD in R. v. St. Luke's Hospitaland of LUSH J. in R. v. St. Pancras Assessment Committee (1876) 2 QB 581; the judgement of the Divisional Court in Bootle Overseers v. Liverpool Warehousing Co.;and the recognition by CROMPTON J. and BLACKBURN J. in Harter v. Salford Overseers of the practice, although, by a remark made by him in the course of the argument, BLACKBURN J. showed that he regarded it as anomalous, that the owners are not rated in respect of empty houses.
On the other hand, we have the decision in favour of the rateability of owners in R. v. Melladew and in Borwick v. Southwark Corporation,and expressions of opinion by BULLER J. in R. v. London Corporation (1790), by Lord Herschell in Holywell Union v. Halkyn Drainage Co, and by Lord Atkinson in Winstanley v. North Manchester Overseers to the effect that owners in possession are prima facie occupiers unless it can be shewn that the occupation is in some one else. I may say in passing that I think that the expressions of judicial opinion in each of the last cited cases, as Lord Alverstone CJ, in regard to the language used by Lord ATKINSON, has stated in the course of his judgement in the ,present case, ought not to be regarded as pronouncements of universal application, but strictly in connection with the special facts of the case in which judgement was being given. In all of these cases, if I understand the facts, the owners derived a valuable benefit from the property and premises in question. I should have been glad if from the consideration of the decisions, to some of which I have referred, I could have discovered some clear principle, or definite test, which I could apply in deciding whether an owner who, as in the present case, possesses actually untenanted land, and does not permit any one else to occupy it, but does not, in the ordinary sense in which I have used the word, occupy it himself, ought or ought not to be held liable to be rated as an occupier in respect of it.
I must confess myself unable to discover such a principle or test. I must content myself with the conclusion stated by Lord MERSEY (then Bigham J.) in his judgement in Borwick v. Southwark Corporation. He says: "Whether a man "occupies" or not is in each case a question of intention to be ascertained with reference to the particular circumstances." Lord MERSEY went on to say ill the same sentence, "and if there are facts which one way or the other can reasonably support the conclusion at which the justices arrive I do not think this court should interfere with that conclusion. It is a finding of fact." I venture to think that this latter statement gives rather too much weight to the decision of the justices, valuable as that decision always is, and especially valuable when set forth in so lucid and carefully reasoned a judgement as that which Mr. Worsley Taylor, the learned and experienced chairman of the justices of Lancashire, has given in the present case. But in the earlier part of the passage which I have quoted from Lord MERSEY's judgement, where he lays stress upon the inference of intention, as a valuable clue to the solution of such a question as the present case requires us to consider, I entirely concur.
I turn now to the facts. I appreciate, I hope, sufficiently the strength of the case of the corporation as that case is stated in the chairman's judgement, which forms part of the printed case. I agree with him that neither the fencing of this moorland, nor the fact that the keepers of the sporting tenant are authorised by the corporation to warn off trespassers, is a fact which ought in itself to affect our judgement. I suppose that the owner of a vacant house, who, according to the decisions and the practice, is not rateable as its occupier, keeps the door of the vacant house locked, and authorizes the police as well as his servants to prevent the intrusion of trespassers. I agree also that the making and maintenance of certain grips and drains in the planted portion of the area for the adaptation of that ground for plantations is slight, if any, evidence of occupation. Agricultural land may none the less be vacant land, in the eye of rating law, because it is ' drained land. Nor does the letting of sporting rights for which the lessee is rated help to constitute " occupation " on the part of the landowner.
I recognize the plausibility of the statement that the benefit to the corporation in this case arose, not from the beneficial use of the land, but from the power to prevent an injurious one. But upon the whole for, as I have stated, I think that the question which the facts stated in the special case raise is a difficult one I think, if one balances the evidence, there is on the facts a preponderance in favour of the contention of the assessment committee. I think that the facts show that the corporation has such a beneficial user of this land, and such an intention, for the purpose of enjoying and maintaining such user, of continuous control, enabling the corporation at their will to enter upon the land, and to deal with the land as it pleases, that the inference of rateable occupation is the proper inference. The land has been bought, and is used by the corporation as a gathering ground for pure water. The power at any moment to enter upon, and to interfere with, the land, for the purpose of maintaining or bettering the execution of that purpose, involves, it seems to me, the intention to occupy. I understand it not to be denied by the appellants that, if the corporation had placed and maintained upon, the land works, however simple, for collecting or diverting water, an " occupation " would have been created. At present the contour of the land renders any such artificial work unnecessary for the purpose of getting and maintaining its beneficial user.
If beneficial user exists, and if beneficial user affords good ground for the inference of rateable occupation, it appears to me that the presence of artificial works cannot be essential to proof, but that, when it is proved, it strengthens of course the evidence of such occupation.
If upon this, the principal point, the judgement of the Divisional Court is affirmed, there remains only one other subsidiary point to be mentioned; for, although the reported judgements, as I read them, show that in some way the learned judges were left by the arguments under the impression that the contention of the assessment committee as to the rateability of the corporation in respect of their occupation of the gathering ground related only to 859 acres out of the 1, 165 acres, and that as to the remaining 306 acres the corporation were rated separately as occupiers of woodlands and nurseries under the Rating Act of 1874, s. 4, and the only question, in the words of the Lord Chief justice, was whether they ought to be rated at an enhanced value because there is water running through them, this misconception, if it existed, was corrected in the order as afterwards drawn up, upon which this appeal comes before us. The only other question, therefore, as to which I need to say anything, if the hypothetical questions (2) and (3) do not arise, because the whole area of 1165 acres is rateable as being beneficially occupied as a gathering ground, is whether or not evidence of the price paid by the corporation is admissible as a basis for calculating the assessment for rating purposes, or, in other words, whether the interest upon that price is some evidence of the rent which an occupying tenant of the gathering ground would pay. I think it is.
The law appears to me to be correctly stated by Mr. Ryde at p. 176 of the second edition of his work on Rating. He says:
"The measure of rateable value is defined by statute as the rent which may reasonably be expected; interest on cost or on capital value cannot be substituted for the statutory measure, but can be looked at as prima facie evidence in order to answer the question of fact what rent a tenant may reasonably be expected to pay."
He justifies this statement by the judgement of CAVE J. in 1885 in R. v. London School Board for London. I agree at the same time with the judgement of VAUGHAN WILLIAMS LJ that in regard to the 306 acres used as plantations and nurseries there is a question still to be considered and decided by the quarter sessions. It may be found that a rent might be got for them from a tenant from year to year as plantations and nurseries, and, if so, as Mr. Ryde also correctly states in the passage to which I have referred, it will be the rent to be reasonably expected which will constitute the proper basis for assessment for rating. I agree that the appeal should be dismissed with the usual consequences.
Appeal dismissed.
The Corporation appealed to the House of Lords.
Lands Tribunal
This is an appeal by the Valuation Officer for the London Borough of Enfield against a decision of the London (North West) Valuation Tribunal that the 55 units located within the Enfield Enterprise Centre, which were assessed as separate units in the 1995 rating list, should be assessed as a single hereditament. Details of the individual rating assessments for each of the units, together with the decision of the valuation tribunal, are set out in a schedule which forms appendix A to this decision.
The Enfield Enterprise Agency (the agency) has not responded to this appeal and the appellant has agreed that the matter may be determined, without an oral hearing, under rule 27 of the Lands Tribunal Rules 1996. I have received written representations from Mr G J Heilbuth ARICS for the appellant.
The Enfield Enterprise Centre (the centre) comprises two, two-storied flat-roofed buildings of brick construction forming part of a factory complex built in the 1930's. The buildings were sub-divided in about 1987/1988 to form self-contained workshop and business starter units which generally range in size from 8.5 to 40.0 square metres. However, one unit extends to 131.5 square metres. The front building has a goods lift which serves the first floor but the first floor to the rear building has stairway access only.
The ground floor units in the front building have their own access whilst the first floor the units in the front building and the ground floor and first floor units in the rear building have shared entrances. There is a communal car park for the benefit of the occupiers which has a capacity of 49 spaces.
All the units within the centre are let on separate licences which are on similar terms. Those which are material to this appeal may be summarised as follows:-
(a) The period of the licence is for one month from a stated date which may be continued thereafter, from month to month, until determined by one month's prior notice in writing from either party;
(b) The licence fee for the use of the unit is payable monthly on the first day of each month;
(c) A rental deposit, equivalent to two months of the initial licence fee, is payable on the grant of the licence;
(d) The licence fee is subject to regular review by the agency on one month's prior notice. Any increases are effective from a date six months from the date of the licence agreement and at six-monthly intervals thereafter;
(e) The licensee is responsible for the payment of the uniform business rates, electricity, telephone and water consumed within the unit arising from the lessee's particular use of the unit;
(f) The licensee is responsible for internal decoration of the unit and shall not make any alterations or additions without the prior written consent of the agency;
(g) The licensee will not use the unit in such a way as to cause nuisance to other occupiers of the building or in such a way to vitiate or prejudice any insurance;
(h) The licensee will at his own expense conform to all statutory and other regulations pertaining to his use of the unit and comply with the conditions, rules and regulations prescribed by the agency from time to time;
(i) The licensee will provide to the agency a duplicate set of all keys to the unit and any information to ensure free access by the agency to the unit; The licensor agrees to maintain the buildings and common parts, building insurance and lighting and cleaning of common areas;
(k) The benefit of the licence is stated to be personal to the licensee and non-assignable;
(l) The terms of the licence are not intended to confer any tenancy upon the licensee and possession of the unit is retained by the agency subject only to the rights contained in the licence agreement.
Mr Heilbuth has prepared written representations to support his submission that it is not the agency who was in occupation of the whole centre but the individual unit holders who are in rateable occupation of their respective units. He arrives at this opinion by applying the four tests of rateable occupation laid down in Laing (John) & Son Ltd. v. Kingswood Area Assessment Committee . He concedes that the unit holders satisfy the test of "actual" and "beneficial occupation'. He submits also that they satisfy the test of "sufficient permanence" and of "exclusive occupation' and it is in this respect that his views differ from the decision of the valuation tribunal.
In considering the test of sufficient permanence, Mr Heilbuth identified two aspects requiring consideration, namely the length of the individual occupations and the period that was required to terminate such occupations. In the instant case Mr Heilbuth said that the occupation of the units was for varying lengths, some being for periods well in excess of one year and some being for shorter periods: in this regard he produced a schedule setting out the occupying particulars for the centre at 1 April l 995 and at 24 July 1998. He concluded from these particulars that:-
(a) A great many of these occupations exceeded one year. He cited LCC v. Wilkins (V0), Dick Hampton (Earth Moving) Ltd v. Lewis (V0), United Gravel Company v. Sellick (V0), Renore Ltd v. Hounslow Borough Council and McAlpine (Sir Robert) & Sons Ltd. v. Payne VO [1969] RA 368;
(b) Monthly licences were regularly renewed and it could be inferred therefore that it was the intention of the parties that the occupation should last indefinitely until such time as one of the parties decided to terminate the arrangement (Dick Hampton and Renore Ltd);
(c) The fact that monthly tenancies could be determined at short notice was irrelevant to the concept of rateable occupation. He said that it was the actual period of occupation and its expectation of continuance of that occupation which were important not the precarious nature of the right to occupy. He cited in support Hobbs (V0) v. Madden, Cory v. Bristow, Newton Sand and Aggregates Ltd v. Huntley and Bartlett Brothers (Hauliers) Ltd v. Huntley (V0).
Mr Heilbuth said that he did not accept that the agency was in exclusive occupation of the individual units within the centre 'on the grounds that it had retained paramount control as a result of:-
(a) Retaining a duplicate set of keys to each unit and the keys to the main gate; and
(b) The right to determine who occupied each unit, could at will terminate these occupations and had the power to set rents at varying levels.
He said that the retention of keys and the reservation of a right of re-entry was part of the normal relationship between a landlord and a tenant which did not interfere with the right of the unit holder to carry on the day to day running of their businesses. He found support for this opinion from Westminster City Council v. Southern Railway Company and WH Smith & Son Ltd.
Mr Heilbuth said that in assessing the combination of issues in the instant case Brook VO v. Greggs plc [1991] RA 61 and others represented the most analogous set of circumstances where the Member of this Tribunal found that a market stall held on a weekly licence should be the subject of a separate assessment.
Mr Heilbuth said in conclusion that he was satisfied that the four tests of rateable occupation as set down in John Laing had been satisfied. In particular the licensees exerted sufficient control over their own premises for the purposes of running their businesses to be considered as in exclusive occupation. He said that the occupation was of sufficient permanence either in fact or at least to the extent that it might be deemed so in the context of those circumstances.
He referred me to five other business centres in the locality which are all rated on similar basis.
In conclusion he invited the Tribunal to overturn the decision of the valuation tribunal and to reinstate the original rating list entries.
In answer to a number of written questions raised by this Tribunal Mr Heilbuth said that-
(a) he decision of the valuation tribunal was to merge the assessments of all units appertaining to the centre into a single unit of assessment effective from 1 April 1995.
(b) At the request of the appellant the agency confirmed to this Tribunal that no conditions, rules or regulations had been laid down by the agency under clause 13 of the standard licence agreement for the management and control of the buildings. However, the agency also stated, in their letter of 11 November 1998, that following the decision of the valuation tribunal they had revised the terms of the licence agreement. The principal amendments being:-
(i)to transfer the liability for the payment of business and water rates to the agency; and
(ii)to state in relation to the agency's right of access to the units at all times that the licensee's occupation of the unit "therefore is not exclusive".
(c )"In the circumstances in the appeal cases Westminster v. Southern Railway Company and Brook v. Greggs in respect of key holding and rights of access differ from those in the instant case, where less control is exercised by the licensees, Mr Heilbuth submitted that the differences in the instant case did not sufficiently alter the balance to arrive at a position in which the agency was in paramount control.
(d) In additional submissions on the agency's letter of 11 November 1998 Mr Heilbuth said that:-
(i) The material day for the purposes of the instant appeal was 1 April 1995 (Non- Domestic Rating (material day for list alterations) Regulations 1992/556, regulations 4, 5 and 8);
(ii) The current licence agreement submitted to the Lands Tribunal, on 11 November, was not admissible as evidence since the agency was not a party to the appeal. In the alternative, the new form of licence agreement was not effective at the material day and was not relevant therefore for the purposes of this appeal.
Inspection
I carried out an inspection of the appeal hereditament accompanied by representatives from the valuation office and the agency. During the course of my inspection I noted the following:-
(i)T he appeal hereditament was situated on the south side of Queensway and forms part of an industrial area which, with the exception of a complex occupied by the Middlesex University, mainly extended to both sides of Queensway.
(ii) The appeal hereditament comprised two buildings each constructed on ground and first floors separated by a paved yard.
(iii) Car parking, reserved for the use of the occupiers of the individual units, was located at the southern end of the appeal site within security fencing.
(iv) Vehicular and pedestrian access to the rear building and the majority of the units forming the front building was provided by a gated access and paved access way located adjacent to the eastern boundary of the appeal site. However, separate vehicular and pedestrian access was available to Unit 2 and Units 7-14 (inclusive), which are located on the ground floor of the front building, from a courtyard which has direct access to and from Queensway.
(v. )Each of the units, which are held on licence, have separately metered electricity supplies and, where provided by the agency, a separately metered gas supply.
(vi) A service charge is levied by the agency on each licensee to cover the cost of water rates, external repairs and other outgoings incurred by it in managing the appeal hereditament.
DECISION
As stated earlier there is a single issue for my determination namely whether the licensees were in rateable occupation of their individual units or whether the centre was in the rateable occupation of the agency.
The concept of rateable occupation is not defined in the statute but has evolved through judicial decision. In John Laing, Tucker LJ, at page 163, identified the four necessary ingredients of rateable occupancy in the following terms:
"First, there must be actual occupation; secondly that it must be exclusive for the particular purpose of the possessor, thirdly, that the possession must be of some value or benefit to the possessor; and, fourthly the possession must not be for too transient a period".
In the instant case there is no dispute that the unit holders are in actual occupation and that such occupation is of benefit to them. To this extent the first and third ingredients appear to have been met.
The questions remain as to whether the unit holders' occupation is for too transient a period and whether the units holders are in exclusive occupation.
Insofar as the first issue is concerned the valuation tribunal concluded that the one month security of tenure could in reality be taken away and/or terminated by the agency at any time. The appellant valuation officer submitted that the test of sufficient permanence was satisfied.
His evidence to satisfy the test of sufficient permanence considered two aspects: firstly, the length of the individual occupations; and, secondly, the period of notice required to terminate them.
I was referred to the authorities set out above. In my view these authorities establish the following principles relevant to this appeal. Firstly, the length of occupation is not a conclusive text of permanence of occupation. However it is a factor which I should take into account in arriving at my decision. In my opinion periods of occupation found to be permanent in other cases are of limited assistance and should be viewed against the facts and circumstances of that case.
In the Southern Railway case Russell LJ said at the foot of page 144 and continuing at page 145
"The occupier, not the land, is rateable; but the occupier is rateable in respect of the land which he occupies. Occupation, is not synonymous with legal possession .... rateable occupation, however, must include actual possession and have some degree of permanence; a mere temporary holding of land will not constitute a rateable occupation ... "
In Dick Hampton Roskilll LJ having reviewed the earlier authorities on the question of permanence, said at page 279:
"We were told in the 'building hut' cases 12 months has been taken as a working rule. I say nothing to disturb a practice which no doubt has been found administratively convenient in a particular class of case. But the existence of an administratively convenient practice must not be allowed to obscure what is the real principle involved, the determination whether the occupation is of sufficient permanence as properly to amount to beneficial occupation. It cannot be right in every case of every kind where the question arises to answer it by reference solely to the question of whether the period of occupation is a few months, weeks, days more or less than some arbitrary period such as the 12 months which I have mentioned."
Later at page 280 he said "It will always be a factor in determining whether or not the requisite element of permanence is present, but the degree of importance attaching to this factor must vary with the circumstances of a particular case."
Omrod LJ in the same case, at page 282, said
"Fixed time limits are in any event inappropriate. A tenant under a lease for six months, even a tenant at will, is undoubtedly in rateable occupation because he is not a 'wayfarer' or a 'transient'.
He continued at page 283 "But where there is no competing occupier, as in the case of a tenant under the lease for six months, the time element becomes of much less relevance to establishing liability to rates although, of course, the shortness of the occupation will be reflected in the assessment.
"In my judgment, therefore, it is a mistake to place too much emphasis in this context on the words 'permanence' or 'transient'. They have become to some extent terms of art and have lost their ordinary meaning."
Radcliffe LJ in London County Council v. Wilkins VO after reviewing the earlier authorities said at page 102;
"Certainly it is true that the law demands that an occupation to be rateable should be permanent, but then it is equally certain that permanence does not connote it might appear to in this connection. It is rather easier to say what it does not mean than what it does. An occupation is not the less permanent because it is that of a lessee who holds under a lease for a fixed term. In other words, there is permanent occupation however clearly the end may be in sight. More than that, an occupation can be permanent event though the structure or other chattel which is the means of occupation is removable on notice... It may be that permanent signifies no more than continuous, as opposed to intermittent, physical possession of the soil, as is suggested by the learned editors of Ryde on Rating... However that may be, it is well settled that a tenant at will has an occupation that is sufficiently permanent to carry rateability. If so, I see no reason why the contractor's occupation of his huts during pendency of the building contract should not produce a similar result."
Later he said:
"Each decision, no doubt, has to be related to its own particular facts. But, in my opinion, within very wide limits, which are not overstepped in the present case, the question whether there is sufficient permanency of occupation is essentially a question of degree and, as such, is a proper question for final determination of the Lands Tribunal... I do not think that we ought to assume that occupation was, in fact, more transient than the evidence suggests. If so, eighteen months on the site does not present itself to me as something inherently too brief to rateability. The rate is an annual impost on the occupier in respect of his profitable occupation of land; it is not a capital charge on the owner in respect of the property interest in the soil. If such an occupation in fact endures for a year or more, I do not see why the occupier should not contribute to the current fund of the rating area for that period. The mere brevity of his occupation will be itself the cure of any hardship in his liability."
In Renore Ltd v. Hounslow Borough Council Brown J at page 573 said
"I think that the date at which one must look in deciding for the purposes of this case whether there was a sufficient degree of 'permanence' is either the time when the ratepayers first went into actual possession of these three [car parking] spaces, which was early in April or the beginning of the period in respect of which rates are claimed, 26 April. It makes no practical difference in this case, but I am inclined to think that the right date is the latter. Whichever is the right date, the ratepayers had gone into possession under the agreement referred to in paragraph 2(e) of the case. They had already before that claimed to be entitled to a lease of the parking spaces (see paragraph 2(c)) and negotiations for such a lease continued for some months. The council had marked the spaces with the ratepayers' name, which suggests that they were going to stay there for at any rate some considerable time. At that time the expectation must have been that the ratepayers would continue in possession of those three spaces indefinitely. In my judgment there was amply evidence on which the justices were entitled to find that the ratepayers' occupation was permanent enough to satisfy ingredient (4)".
Applying the above principles to the facts of the instant appeal I, firstly, consider the terms of the standard licence agreement and, secondly the details of the occupation of the individual unit holders in order to determine whether there is a sufficient element of "permanence" to constitute rateable occupation.
Before I consider these issues it appears necessary for me to determine a preliminary point as to the admissibility in evidence of the amended standard licence agreement, attached to the agency's letter of 11 November 1998, and on that assumption whether because of the timing of its introduction in evidence following the decision of the valuation tribunal the evidence is relevant in this appeal.
I accept the submissions of Mr Heilbuth that the "material day" for determining this appeal is 1 April 1995 as this is "the day on which the circumstances giving rise to the alteration occurred" (regulation 3 paragraph 4) being the date upon which the hereditament was required to be shown 'm the non-domestic rating list (regulation 3 paragraph 4(a)). This is by virtue of paragraph 8 of regulation 3 as falling within sub-paragraph (b).
For these reasons I find that as the amended licence agreement post-dated the "material day" it is not relevant to this appeal. I further find that as the agency are not a party to this appeal the amended lease agreement is not admissible as evidence in these proceedings.
In the light of these findings I propose to restrict my consideration to the terms of the standard licence agreement in existence at the "material day" namely the document forming appendix C to the appellant's submissions.
Insofar as the first matter is concerned the terms of the licence agreement seem to me to envisage that the parties to agreement contemplated that the unit holders' occupation would continue after the initial period of one month thus establishing some degree of permanence for the following reasons:-
(a) Clause 1 of the licence envisages continuance of the licence after the initial one month period from month to month until determined by either party on one month's notice; and
(b) Clause 3 of the licence enables the licensor to review the licence fee at six monthly intervals from the date of commencement of the licence.
The evidence of occupancy between 1 April 1995 and 24 July 1998 indicates that of the 40 units which were occupied at 1 April 1995 22 had been occupied for over periods of between 1-5 years.
I conclude from this evidence that the requirements of ingredient (4) are satisfied.
I now consider the question of whether the unit holders had exclusive possession in order to satisfy the requirements of the second ingredient.
The valuation tribunal were not satisfied that the unit holders were the paramount occupiers and therefore in paramount control for the following reasons:-
(a) The agency retained all keys to the centre and the keys to the main gate suggested to the valuation tribunal that the agency dictated the working hours of the centre;
(b) The agency dictated who should occupy each unit the period of their occupancy and the level of rent which the valuation tribunal was informed was not uniform but dependent upon the size of the unit and upon the occupant's financial circumstances.
The appellant, on the other hand, contended that unit holders were in paramount control and compared the terms of the licence agreement with those of a lessor and lessee. He contended that the of retention of all keys and the control over the entrance gates, together with a right of entry reserved in the licence agreement, did not interfere with the day to day running of the business of the unit holders.
Mr Heilbuth found support from his evidence from Westminster City Council v. Southern Railway Company and W H Smith & Son Ltdand Brook (V0) v. Greggs PLC and others.
The point for decision in the Southern Railway case was whether shops and kiosks located at Victoria Station and Beckenham Junction, let out by the railway company on various types of tenancy, agreements or licences, were capable of separate assessment, or whether they were part of a railway hereditament and not the subject of separate assessment.
The issue turned on whether the railway company was in paramount control of the shops and kiosks located on the station concourse by retaining the right to close the outside gates to the station between the hours of midnight and 6.00 am together with a reservation in the leases and licence agreements of entry for certain purposes. These agreements also bound the occupiers of the shops and kiosks to obey by-laws and regulations in respect of the railway company's premises.
In finding that the shops and kiosks were separately rateable hereditaments Russell LJ said at page 145 in respect of rateable occupation:
"Where there is no rival claimant to the occupancy, no difficulty can arise; but in certain cases there may be a rival occupier in some person who, to some extent, may have occupancy rights over the premises. The question, in every such case, must be one of fact, viz., whose position in relation to occupation is paramount, and whose position in relation to occupation is subordinate; but in my opinion, the question must be considered and answered in regard to the position and rights of the parties in the premises in question, and in regard to the purpose of the occupation of those premises. In other words, in the present case the question must be, not who is in paramount occupation of the station, widiin whose confines the premises in question are situated, but who is in paramount occupation of the particular premises in question.
A familiar instance of this competing occupancy is the case of the lodger. It has long been settled, on the one hand, that in the case of lodgers in a lodging-house, the lodgers are not rateable in respect of their occupancy of their rooms, but the landlord is the person who is rateable in respect of his occupancy of the entire house. In view of the fleeting nature of the occupancy of a lodger, the convenience of this view, indeed the necessity for it is obvious; but it purports to be based upon the paramountcy of the landlord's occupation, arising from his control of the front door and his general control over and the rights of access to lodgers' rooms for the proper conduct of the lodging-house. And the same view as to rateability has prevailed in the case of a business lodger. On the other hand, the occupation of a person residing in a flat is such that he is (generally speaking) rateable, although, as a matter of practice the owner of the block of flats usually pays the rates charging the tenant an inclusive rent.
I cannot but feel that the position of the lodger in relation to rateability is an exceptional one, and is largely the product of practical considerations. But it can I think, be justified and explained when we remember that the landlord who is the person held to be rateable, is occupying the whole premises for the purpose of his business of letting lodgings, that for the purpose of that business he has a continual right of access to the lodgers' rooms and that he, in fact, retains control over the ingress and egress to and from the lodging-house, notwithstanding that the power of ingress and egress at all hours is essential to the lodgers. The general principle applicable to the cases where persons occupy parts of a larger hereditament seems to be that the owner of the hereditament (being also in occupation by himself or his servant) retains to himself general control over the occupied parts, the owner will be treated as being in rateable occupation; if he retains to himself no control, the occupiers of the various parts will be treated as in rateable occupation of those parts.
Later at page 147 Russell LJ said
"... The effect of the alleged control upon the question of rateable occupation must depend upon the facts in every case; and in my opinion in each case the degree of control must be examined, and the examination must be directed to the extent to which its exercise would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them, or would be inconsistent with his enjoyment of them to the substantial exclusion of all other persons."
I was also referred to a decision of this Tribunal of Mr C R Mallett FRICS in the case of Brook v. Greggs PLC in which the member decided that stalls in a market hall should be separately rated. Although I am not bound by this decision the issues in that case seem to me to be broadly similar to those in the instant appeal and the decision is to that extent helpful. The material facts in that case were that individual stalls were held on renewable weekly licences which were terminable at a moment's notice by either party. The licence charges were reviewable annually and were inclusive of general and water rates, cleaning of common parts and a return on capital in constructing and fitting out the market.
The times during which the traders might occupy their stalls were controlled by the council and the terms of the licences/leases required traders to keep their stalls open for trading. The council was responsible for security. Entrances to the market hall were protected by metal shutters which were opened and closed by security officers employed by the council. Access could not be gained by the traders when the market was closed. Stalls were left stocked at night and in certain cases the stalls were protected by metal roller shutters secured by padlocks for which the traders retained keys but other stalls were either open or fitted by canvas lines.
The member held that the traders were in exclusive occupation of each stall and that the interest of the council in managing the market was different to that of each stall holder who was conducting a particular retail trade.
In applying these principles to the facts in the instant appeal I have noted that Mr Heilbuth concedes that the degree of control exercised by the agency in the instant case is greater than in the two cases cited above because of the general power of entry and a requirement for the licensees to deposit a duplicate set of keys with the agency, he nevertheless submits that the licensee of each unit retains paramount control.
The key issue in the instant appeal in order to determine who is in rateable occupation is to establish from the facts who is in paramount control of each unit of accommodation. The starting point seems to me to be the licence granted by the agency which I understand to be in a standard form.
The preamble to this licence sets out the agreement by the licensor to permit the licensee to use a designated area within the centre (herein referred to as a unit) on the terms and conditions set out in the licence. The only restrictions are that such use will not prejudice or vitiate any insurances, that it shall comply with statutory and other requirements and it shall meet any conditions, rules and regulations laid down by the agency from time to time.
It seems to me, therefore, that the licensee could reasonably expect, from the preamble to the licence, to be able to carry out his business during normal business hours without interference or interruption by the agency.
However it is necessary to consider whether the retention of keys to the main gate, the requirement to lodge a duplicate set of keys of the unit and a free right of access by the agency and a right to determine licences and set the level of future licence fees would interfere with the enjoyment by the licensee of the unit within his possession, for the purposes for which he occupies it, or, would be inconsistent with his enjoyment of it, to the substantial exclusion of all other persons.
Insofar as the first issue is concerned there is no requirement in the standard licence agreement or in conditions, rules and regulations made by the agency under clause 13 of the licence agreement for the agency to maintain control over the main gate. It seems to me that such control is exercised by the agency as part of its management's functions of the estate to provide security to the appeal hereditament outside normal business hours. In my view this is of benefit to the occupying lessees. No evidence was adduced that such control had impacted on the licensee's right to use premises occupied by them for the purposes of their business.
Insofar as the second issue is concerned whilst the agency may have the right to enter onto the premises for a variety of purposes, and for this reason they require a duplicate set of keys to be lodged with it such right does not convey a right of occupation or a right to conduct a business in the unit.
The third issue related to the right of the agency to determine licences and set licence fee levels. However, no evidence has been adduced that these rights have resulted in licensees being evicted from premises. I accept the submission of Mr Heilbuth that such rights are those which would normally be inserted into a lease or licence in the open market on the "material day". There is no evidence to suggest that the presence of these terms in the standard licence agreement would affect the ability of the licensee to use the premises for the purposes of his business during the currency of the licence.
For the sake of completeness and having regard to the requirements of Rule 50(4) of the Lands Tribunal Rules 1996, as amended, it is necessary for me to state an alliterative award on the assumption that the revised standard licence agreement, annexed to the letter from the agency of 11 November 1998, is admissible as evidence in the instant appeal.
As previously stated the principle amendment to the original standard licence agreement brought about by the revised document is to the wording relating to the rights of access reserved to the agency. In particular clause 5.3 states that "the licensor is entitled to have access to their unit at all times and the licensee's occupation is therefore not exclusive". Clause 2.2 of the revised agreement retains the right of the licensee to use the unit together with access areas and common facilities for the purposes of his business.
I consider that the terms of the revised agreement do not materially affect the right of the licensee to carry out his business as no right of occupation is given to the agency. I conclude that the licensee remains in paramount control of his unit and therefore in rateable occupation.
For these reasons I conclude that each of the units is a separately rateable hereditament and the appeal should be allowed. I direct that the rating list should be amended to give effect to the assessments set out in part I of appendix A from the dates set out in column 4 to that appendix.
As there is no respondent in this appeal there can be no order as to costs.
Lands Tribunal
This appeal against the decision of the Northern Essex Local Valuation Court is concerned with the rateability of a trampoline site situated within the public Greensward at Marine Parade West, Clacton on Sea, Essex. The site was first brought into assessment by a valuation officer proposal dated the 16th February 1977.
On the 13th February 1987 the occupier, Mrs I J Monkcom, made a proposal seeking a nil assessment. The valuation officer objected and when the matter came to appeal the local valuation court concluded that the site was rateable but reduced the assessment from £175 rateable value to £150 rateable value.
The ratepayer appeals to this tribunal seeking a nil assessment or in the alternative a substantial reduction in assessment. The valuation officer seeks to maintain the assessment decided by the local valuation court.
Mr T G Sharman by leave of the tribunal appeared for the ratepayer and called her to give evidence. The valuation officer Mr J Adams ARICS appeared in person and gave evidence.
From the evidence and an agreed statement of facts I find the following:
The trampoline site is an area of land approximately 222 sq.yd. (185.6 sm) within the public Greensward, Marine Parade West, Clacton on Sea in Essex. The area of the site is defined and separated from the Greensward by a timber fence. It is adjacent to a donkey enclosure and a crazy golf course.
The site is grassed and accommodates six children's trampolines. The metal frames are recessed into shallow trenches each 80 ft square with timber frames. The skin or canvass of a trampoline when fitted is thereby at ground level. This arrangement is for the safety of children using the trampolines.
There is a hut constructed of wood with a felt roof of 33.3 sf (3.1sm) and used for storage.
On the 2nd June 1986 the Tendering Council granted a licence to the ratepayer to use the site solely as a trampoline pitch between the hours of 8 am and 10 pm from the 1st of April or Good Friday, whichever the sooner, to the 31st October in each year 1986 to 1990 inclusive. The licensee may at her own expense provide, erect and maintain a hut and trampoline pitch and suitable fencing.
The ratepayer uses the premises only during school holidays and fine days. Children are allowed to use the trampolines for five minutes on a payment of 30 pence. Parents are allowed into the enclosure free of charge.
The business is run by the ratepayer's husband and two small daughters and the girls received a nominal payment for their services. The gross receipts in 1986 amounted to £2,193.72 and in 1987 £2,238.05. The ratepayer calculates that the business made a loss in 1986 of £163.19 but this was after making capital payments for the purchase of the hut, fence, trampolines and other equipment amounting to £805 but before making any deductions for the costs of management. Likewise in 1987 the profit is calculated to be £246.38 after capital payments of £235 in respect of trampolines but again before any deduction of management costs.
The issues
The issues may be briefly stated in the form of three questions:
1 . Is there exclusive occupation of the trampoline site by the ratepayer?
2. Is there beneficial occupation of the trampoline site by the ratepayer?
3. Is the trampoline site ancillary to a public park within the meaning of s 44 of the General Rate Act 1967 and therefore exempt from rating?
If in fact the trampoline site should be assessed then there is a dispute as to the correct assessment.
I was referred to the following authorities and decisions of the Lands Tribunal: Gage v. Wren; Lambeth Overseers v. London County Council; Kingston upon Hull Corporation v. Clayton VO,Burrell VO v. Downham Market UDC, Blake VO v. Hendon Corporation; Sheffield Corporation v. Tranter; Southern Miniature Railway v. Hake; London County Council v. Robinson and Lambeth MBC, Redbridge London Borough Council v. Wand; North Riding of Yorkshire County Valuation Committee v. Redcar Corporation; Smith v. St Albans City and District Council; and Halsbury's Laws of England (4th edn), Vol 39, para 25.
The first issue concerns exclusive occupation. I have no doubt that during those periods when the appeal site is in use for children's trampolining they are in the occupation of the ratepayer and all other uses are excluded. There is no evidence to show that at other times, either within or without the limits of the license, the site is used to any significant degree for any other purpose and no doubt the unique physical characteristics of the site are not conducive to a different use.
I do not think that the occupation can be disregarded on the grounds of transience. In fact the premises are in use as a trampoline site for comparatively few days in the year but they have been especially adapted for that use and are available for that use at any time during the license period over a number of years. The metal trampoline frames remain in the shallow trenches throughout the year.
The next question concerns beneficial occupation. As I understand it from numerous authorities starting with the House of Lords decision in Jones v. Mersey Docks (to which I was not referred) beneficial occupation is not limited to pecuniary profits but means an occupation which is of value to the occupier and for which he would be prepared to pay a rent. In the present case the ratepayer makes a payment for her license to trade. It can be demonstrated that after paying the "rent", rates, repairs, insurance and other overheads including an annual allowance for her capital expenditure there still remains a profit. Whether that profit is sufficient to induce the tenant to continue to occupy the premises is a question of fact but the only evidence before me is that the ratepayer has been trading at the premises since 1986 and there is no suggestion that she does not wish to continue trading.
I conclude therefore that there is in fact a beneficial occupation.
On this last question I refer to s 44 of the General Rate Act 1967 as amended by the Local Government Act 1972, s 271 and sch 30, which reads as follows:
"44 (1) A park which has been provided by, or is under the management of, a local authority and is for the time being available for free and unrestricted use by members of the public shall, while so available, be treated for rating purposes as if it has been dedicated in perpetuity for such use.
(11) In this section (a) References to a park include reference to a recreation or pleasure ground, a public walk, an open space within the meaning of the Open Spaces Act 1906, and a playing field provided under the Physical Training and Recreation Act 1937; (b) The expression 'Local Authority' means council of a county ... London Borough, county district or borough included in a rural district, a parish council or parish meeting, the Greater London Council, the Common County of the City of London or the Council of the Isles of Scilly, or any two or more of them acting in combination."
I have been referred to a large number of cases but I have not had the benefit of any legal arguments in the light of those authorities. In each case, whether or not a swimming pool, bowling green, refreshment pavilion, roundabouts, swings, kiosks, stalls, donkey rides and putting courses were part of the park was a question of fact and degree. However, it is also necessary to try and understand the principles underlying the consideration of the facts.
In the Court of Appeal decision in Blake VO v. Hendon Corporation Devlin LJ said (1961) 32 DRA 486, 496:
"The public is not a legal entity and cannot be vested with the legal ownership of the walks and pleasure grounds which it is to enjoy. But if it could be given the beneficial ownership, that is what it should have. In the case of buildings, such as libraries and art galleries, the needs of management may be deemed to require the local authority to retain the right of occupation. But the local authority have no right to retain out of lands intended for the enjoyment of the public the right of occupation that is not necessary for their management."
Later at p 497 he said:
"Of course, if the exclusion of the public for free use goes beyond what is justifiable as ancillary, the land, or the parts of it subject to the exclusion, will be rateable on the ground that they are no longer beneficially occupied by the public but are being occupied by the local authority for their own purposes."
In the Redcar case the Lord Chief Justice at [1942] 2 All ER 589, 594 said:
"The basic principle on which the Brockwell Park case was decided was that, although the legal possession was vested in the county council, they were 'merely custodians or trustees to hold it and manage it for the use of the public'. As Lord Halesbury said, the county council were incapable by law of using the park for any profitable purpose. They must allow the public the free unrestricted use of it. This certainly would not be an accurate description of the possession of Redcar Corporation. I do not attach any importance of fact that there is nothing to show any irrevocable dedication of this land and works and buildings to the use of the public, but, in truth and in fact, these hereditaments, taken as a whole, are not used so as to allow the public the free and unrestricted use of them.... I take the test which Brett LJ laid down in Hare v. Overseers in Putney, that test was 'that there is no beneficial occupation, if by law no benefit can arise to the occupier'. Applying that test, I think the corporation failed....... The corporation are in occupation and in beneficial occupation.........
In the present case the district council permit the licensee to use the site as a trampoline pitch but they do not require her to do so. They seek to regulate the hours of business and such matters as erection of a suitable fence, the cleaning of the site and the use of display boards; but they do not seek to regulate the charges. The scale of operations is vastly different from that reported in the Redcar case but the principles are the same.
Having already established that there is a beneficial occupation of the site it would be difficult to find that the public have a free and unrestricted use of the site as an ancillary of the adjoining park. It can rarely happen that the use of a park by the public is not subject to some restriction evidenced by notices such as "keep off the grass", "no ball games" and "the park closes at . . .", but these are all intended for the better enjoyment of the park. So too, special parts of the park may be allocated for certain uses such as a children's playground equipped with swings, roundabout and slides. In my view it is not the fencing of the site or the introduction of charges that are necessary fatal to the ratepayer case but the creation of a beneficial occupation which of necessity excludes the public from the free and unrestricted use of the site. For these reasons it cannot be regarded as an ancillary of the park.
There remains the issue as to the quantum of the assessment. Mr Jones produced the following valuation:
162.2 sm at £0.36 psm 58.00
6 holes at £15 90.00
Hut 3.1 sm 3.00
Fence
£151.00
Net annual value say, £150.00
He compares this assessment with the agreed assessments on the donkey enclosure of £150 and the golf site at £200 net annual value.
The rate of £0.36 psm is the same rate as that applied to 418 sm of grass land in the donkey enclosure and compares with £0.60 applied to 334.4 sm of concrete on the golf site together with concrete plinths containing each tee, fairway, bunker and hole.
The ratepayer produced no evidence in support of her contention that the assessment was excessive but criticised the addition of £90 in respect of the six holes or trenches. Having inspected the site I am inclined to the view that the figure of £90 is excessive. The walls and floors of the trenches are bare earth with a minimum of timber framing. The steel trampoline frames set into the trenches are in my view tenant's chattels and are not rateable. Therefore I reduce the assessment to net annual value of £90.
I heard submissions as to costs but in the special circumstances of this case I make no award.
Court of Appeal
COLLINS M.R. read the following judgment:- This is an appeal from a decision of the Divisional Court affirming the order of justices refusing to enforce the payment of certain rates in respect of a warehouse in Liverpool, alleged to have been in the occupation of the defendant during the period covered by the rates. The matter comes before us upon a special case stated by the justices at the request of this Court upon a former hearing, when the Court was differently constituted. The respondent contends that the defendant was out of occupation of the premises during a portion of the periods covered by the rates in question, and claims exemption under a local statute during the time that he was thus out of occupation. Paragraphs 3, 4, 7, and 8 of the special case are as follows. [The Master of the Rolls read paragraphs 3, 4, 7, and 8 of the special case, as set out above, and continued:-] It will be seen, therefore, that we have to consider whether on the facts stated the justices were right in point of law in holding that the defendant was not in occupation during the periods named. The Divisional Court held that the question was concluded by its decision in Overseers of Bootle v. Liverpool Warehousing Co. , on which the justices had purported to act, and accordingly refused to interfere with their decision.
It is important to remember, in dealing with questions of liability to pay rates, that occupation, which is the basis of liability, necessarily varies with the nature of the rateable subject-matter. The acts necessary to establish occupancy of a dwelling-house may be very different from those which might be required to establish occupation of a non-habitable hereditament. It is, I think, clear from a comparison of many authorities that the intention of the alleged occupier in respect to the hereditament is a governing factor in determining the question whether rateable occupancy has been established. For instance, the physical presence, actual or constructive, of the alleged occupant upon the hereditament may be consistent with the position of licensee or lodger as well as with that of an occupier in the sense required to establish rateability. "In order to ascertain this," says Blackburn J. in Allan v. Overseers of Liverpool , "we must see what was the intention of the parties." So, in a case where an owner had put up his house to let, and had placed or left furniture in it, that eminent Judge the late Christian J. says: "The presence of furniture has its chief bearing on the case with reference to the animus habitandi. .... If a man leaves furniture in a house, or sends furniture to a house, the presumption is in favour of the animus revertendi, or habitandi": see Staunton v. Powell. So, in the case of the tenant of a boarding-house - Gage v. Wren - which could only be carried on profitably for a short period in the year, who at the end of the season had withdrawn the furniture with the exception of a few tenant's fixtures and fitted mats, but who had never relinquished the intention of returning to reopen the house as a boarding-house in the coming season, it was held that she had never ceased to occupy so as to be liable for rates; Lord Alverstone C.J. and Darling J. relied, it would seem, exclusively on the intention to be inferred from the nature of the business, and Channell J. expressed entire agreement with them, though he also relied on the fact of the chattels left behind as evidence of actual occupation: see also Mayor, etc., of Southend v. White. Darling J. invoked the analogy of fruit trees, which may possibly call for no active interference until the fruit is ripe, but yet are to be deemed as occupied during the period that the fruit is ripening. The like principle has been applied to saleable underwoods which were cut only at intervals of twenty years: R. v. Mirfield.
To come to the case before us, the business of a warehouseman need not involve the actual presence on the premises either of the warehouseman himself, or of any representative, or of any movable chattels. If he has the necessary appliances ready for use when the demand for storage comes, he is in a position to do business to which the physical occupation of the premises is indispensable. If he holds himself out to let storage space not involving a demise of the whole warehouse, and, by securing exclusive control over the premises, has put himself in a position forthwith to give the accommodation required, is he to be deemed as not the occupier until some customer has been found to deposit goods for storage? And when he has secured customers, and his warehouse has afterwards again become empty, is he to be deemed as having ceased to occupy? I cannot think that this can be so. I am aware that ownership is distinct from occupation, and that an owner does not make himself rateable by trying to let an house which he has ceased to inhabit. But the principle involved in that proposition does not apply to the case of the tenant of a vacant warehouse who retains control over it for the purpose of letting storage room. In the case of the owner seeking to find a tenant in the case put, no assertion of occupation by him is involved. If he gets a tenant, he substitutes the occupation of another person for his own. The warehouseman in getting a customer supplies visible evidence of his own occupation. In the case of the owner who tries to let the intention is not to occupy. In the case of the warehouseman it is exactly the reverse. It seems to me on the facts found by the justices, which I need not repeat, that the intention of the defendant here was as far as possible to avoid the semblance of occupation while carefully guarding the substance. He carefully retained the control, while his continuous intention was to utilize the premises for the purpose of his business whenever the opportunity offered. With regard to the Bootle Case , on which the Court below seem to have acted, I think it is distinguishable, as the Court found there a bona fide intention "not to occupy, not to carry on the business of the respondents in those particular premises": see perBigham J. Here the justices have found for us the facts as to intention in the paragraphs above cited, and have requested our opinion as to whether their decision in the case was correct in point of law. For the reasons I have given I think it was not. I should add that the facts before us appear to be somewhat more fully stated than they were in the Divisional Court. With the greatest respect to them, I think the appeal must be allowed.
COZENS-HARDY L.J. I have had the opportunity of reading and considering the judgment of the Master of the Rolls. I entirely agree with it, and do not desire to add anything to it.
FARWELL L.J. read the following judgment:- This is a case stated by justices, and raises the question whether the defendant "ceased to be occupier" of a certain warehouse in Liverpool within the meaning of s. 31 of the Liverpool Improvement Act, 1858, and s. 37 of the Liverpool Corporation Act, 1893.
The question is one of actual, not beneficial, occupation. It is not disputed that property that is in fact unoccupied is not liable to be rated; and it is contended (1.) that this warehouse was unoccupied; and (2.) that in any case this is a question of fact for the justices. Whether premises are or are not unoccupied is in many cases a mixed question of fact and of law; there may be visible physical occupation by the person rated, or his servant, or his goods and chattels, and such occupation may be of part of an undivided tenement; and, if in such a case occupation is found as a fact by the justices, no appeal will lie. But these do not exhaust all the cases of occupation. Rateable property has many varieties; of some the normal use is by personal occupation, e.g., a dwelling-house, of others by occupation by live or dead stock, e.g., a linhay used as a shelter for cattle, or a barn; and the nature of the property and its mode of use must be considered in each case. The test, in a case like the present, of business premises, appears to me to be, Has the person to be rated such use of the tenement as the nature of the tenement and of the business connected with it renders it reasonable to infer was fairly within his contemplation in taking or retaining it? In many trades, and certainly in a warehouseman's, the trader must necessarily contemplate the occupation for considerable periods of parts of his premises as spare room. If and so long as he uses the premises for the purposes of his business, he is in occupation of them for rating purposes: see the judgment of Darling J. in Gage v. Wren. In the present case the warehouse is used for the purposes of a warehouseman's trade, and is full, half full, or empty from time to time according to the fluctuations of trade; but it appears to me impossible to hold that it fluctuates in point of rateability in like manner. Floors or separate warehouses for the time being empty do not thereupon cease to be rateable and continue free until used, even although there are no chattels, and nothing but landlord's fixtures therein, because the warehouseman has the use of them as spare room for the purposes of his trade. If he shuts them up altogether, and gives up his business in connection with them, they cease to be rateable; but, if and so long as he carries on his business there, and holds them ready for use in and as part of such continuing business, he remains rateable. The question must be whether they are kept in such a state as to be capable at any time of being used in a continuing business. Treating this as the test, the Bootle Case was rightly decided, because the business in connection with the warehouses in that case ceased to be carried on; the warehouses were shut up and withdrawn absolutely from their owner's trade. But in the present case the contrary is the fact; it is true that the water is cut off, but it can be turned on again at a moment's notice and that the weights and scales and trucks were moved into the owner's warehouse next door, but they could be got in again as soon as required. Provided it was worth his while commercially, the owner was prepared to reopen the warehouse and to let either the whole of it or separate floors, or to let floor space at a tonnage or package rent [paragraph 3 (i)]. Under these circumstances I find it impossible to say that the defendant has ever given up the use of this warehouse, or withdrawn it from his business so as to cease to occupy it within the meaning of the Act. He has merely kept it as spare room.
Then it is said that the justices have found non-occupation as a fact. I do not so read the case. They refer to the Bootle decision as governing the case, but its applicability is a question of law, or at least of mixed law and fact, and the question left to us in paragraph 8 is whether as a matter of law they came to a correct decision. I read the case as amounting to a statement that the justices conceived that the Bootle Case established a principle, and that such principle is applicable to the present case. In my opinion they have come to an erroneous conclusion, and this appeal should be allowed.
HAVERS, J., The short point taken by the ratepayers is that during the periods between the 1st April, 1952, and the 31st July, 1952, and the 1st April, 1951, and the 27th November, 1951, respectively, the sheds were actually empty, and that, therefore, the ratepayers were not in rateable occupation of them. Counsel for the ratepayers based his argument substantially, if not wholly, on the decision of the Court of Appeal in Associated Cinema Properties, Ltd. v. Hampstead Borough Council.' It is important, however, to see the nature of the property with which the Court of Appeal was dealing in that case. The headnote to that case reads ([1944] K.B. 412) :
" By an agreement in writing a company took for a term dwelling-houses so that they might have accommodation available for use as offices in the event of their premises being rendered unfit for use by enemy action or for use I owing to the exigencies of their business.' The company did not use the premises for any purpose, nor enter into physical possession of, nor place any furniture or other chattels on, the premises at any material time.
HELD : That a mere intention to occupy premises on the happening of a future uncertain event cannot, without more, be regarded as evidence of occupation, and, therefore, that the company were not in rateable occupation of the premises as they had never been in actual occupation of them."In that case the premises were dwelling-houses of which the company had never been in actual physical possession and in which they had never placed any furniture or other chattels at any material time. The Court of Appeal held ([1944] K.B. 417)"
It is never true to say that a mere intention to occupy in hypothetical circumstances which may never come into existence is equivalent to occupation. "
That case is wholly different on its facts from the facts in this case, which closely approximate to those in R. v. Melladew 1 KB 192, which dealt with a warehouse. Counsel for the rating authority in his argument in that case points out the difference between occupation of a warehouse and occupation of a dwelling-house ([1907] 1 K.B. 197)" What amounts in law to occupation of premises must vary according to the character of the particular premises in question. Occupation is in many cases constructive, and the decisions show that the existence of constructive occupation, in the absence of actual physical occupation, depends mainly on the intention manifested The occupation of a warehouse is different from that of a dwelling-house. The use of a dwelling-house is by actual inhabitancy, and the purposes of a dwelling house require furniture.
A man may occupy a dwelling-house by his servants or his furniture; and, if he removes his furniture and seeks to let the house, his occupation ceases, because his intention is not to occupy the house himself, but that someone else should occupy it. Altogether different considerations apply to the case of a warehouse. A warehouse is practically an unfurnished building, and its business use is by letting unoccupied space therein for the purpose of storing goods. It is therefore occupied by its owner for th purposes of his business as long as he intends to use it by taking in goods for storage, if and as soon as such are forthcoming. It does not cease to be occupied by reason of there happening at any particular moment to be no goods stored in the warehouse. If the owner still retains control over the warehouse, and intends to carry on his business there at any moment when a sufficient amount of goods for storage is forthcoming to make it worth his while to take them in, he must still be considered as occupying the warehouse."Sir Richard Henn Collins, M.R., in his judgment, said (p. 200) :
It is important to remember, in dealing with questions of liability to pay rates, that occupation, which is the basis of liability, necessarily varies with the nature of the rateable subject-matter. The acts necessary to establish occupancy of a dwelling-house may be very different from those which might be required to establish occupation of a non-habitable hereditament."
Farwell, L.J., said (p. 203) :
Rateable property has many varieties; of some the normal use is by personal occupation, e.g., a dwelling-house, of others by occupation by live or dead stock, e.g., a linhay used as a shelter for cattle, or a barn ; and the nature of the property and its mode of use must be considered in each case. The test, in a case like the present, of business premises appears to me to be : Has the person to be rated such use of the tenement as the nature of the tenement and of the business connected with it renders it reasonable to infer was fairly within his contemplation in taking or retaining it? In many trades, and certainly in a warehouseman's, the trader must necessarily contemplate the occupation for considerable periods of parts of his premises as spare room. If and so long as he uses the premises for the purposes of his business, he is in occupation of them for rating purposessee the judgment of Darling, J., in Gage v. Wren. "
Every word of that passage in the judgment of Farwell, L.J., seems to me to be applicable to the facts of this case. These ratepayers had been carrying on business as timber merchants in the port since 1930. They had constructed the timber sheds. They had shown no intention of ceasing to carry on business or of not using the sheds for the purpose of their business, and it seems to me that, on the facts of this case, the justices came to a right conclusion in, holding that the ratepayers were in rateable occupation of them.If the argument of counsel for the ratepayers were right, it would seem to follow that, if during one week a ship did not come in with a load of timber and the sheds were in consequence empty, the ratepayers would not be in rateable occupation. Next week if a ship came in the sheds would be in occupation, and the following week they would be empty merely because no timber was available, and again would cease to be rateable. This seems to me to be a wholly anomalous and unjustifiable result. In my view, this case falls within the decision of the Court of Appeal in R. v. Melladew. I hold, therefore, that the justices wereright in the conclusion at which they arrived, and that the ratepayers were in rateable occupation.
LORD GODDARD, C.J. : I agree. Although, as counsel for the ratepayers pointed out, this case differs from R. v. Melladew in that there the warehousemen were taking other persons' goods and in this case the premises were for the storage of their own goods, it seems to me that every part of the reasoning in R. v. Melladew is equally applicable to this case. In my opinion the justices were right.
SELLERS, J. : I agree. There is a clear distinction between the Hampstead case' and this case, as Havers, J., has pointed out. The distinction is that that case concerned a dwelling-house, and in this case we are dealing with business premises where there is a finding of fact that both the sheds were" built and throughout the year in question had been maintained in use by the ratepayers in connection with their business of timber merchants and importers."At all material times the sheds were ready for the storage of timber. The case falls clearly within the principles enunciated in R. v. Melladew, though, as Lord Goddard, C.J., has pointed out, the difference between the two, emphasised by counsel for the ratepayers, is that one was for the purpose of their own goods and the other for general warehouse purposes. But the real characteristic of the ratepayers' business was that, as timber merchants and importers, they did require from time to time space in which to store the timber or goods they bought. The words of Farwell, L.J., in R. v. Melladew are very appropriate: " in many trades, and certainly in a warehouseman's trade, the trader must necessarily contemplate the occupation for considerable periods of parts of his premises as spare room." This was clearly one of those trades, and it was the spare room which enabled the ratepayers to continue with their business of trying to get timber imported or goods purchased, which required that they should have spar room in which to put it as and when they were able to do business. This is a very clear case, and I agree with the order of the court.
Court of Appeal
DILLON LJ: I will ask Bingham LJ to give the first judgement.
BINGHAM LJ: The short question raised by this appeal is whether the Rotherham Justices were correct in holding that the appellants were in rateable occupation of premises known as Bay 4, Hellaby Lane, Bramley, Rotherham, for a period after the 1st October 1982. The justices held that the appellants had been in rateable occupation and, on a complaint made under s 97 of the General Rates Act 1967, issued a distress warrant for something over £90,000 on the 11th April 1985. On appeal to Kennedy J by case stated 'he upheld the justices' decision, holding that that decision was one which was open to the justices on the facts found. A further appeal is accordingly made to this court.
The applicants are a company incorporated in Scotland. They were formerly called NMT Properties Limited. There has been a change of name, and they are now called Calmain Properties Limited, but I shall continue to call them NMT for convenience. NMT has one director, Mr R N Khan, who owns 46% of the shares. The evidence is that NMT is a property development and owning company and has never carried on business as warehousemen.
The premises in question, Bay 4 at Hallaby Lane, are part of a new building finally completed on the 1st October 1982. The building was, as the facts show, built for NMT, who are the freehold owners of the building. Bays 1, 2 and 3 form part of the same building and are alongside Bay 4, being part of the same complex. NMT are freehold owners of those premises, and developed them also. But, so far as Bays 1, 2 and 3 are concerned, the history is slightly different.
By an agreement made on the 6th August 1981 NMT agreed with Carreras Rothmans Ltd to build and complete Bays 1, 2 and 3, whereupon Carreras Rothmans would execute a warehousing agreement with a company named Industrial Storage & Forwarding Limited. Industrial Storage & Forwarding Limited is a company of which Mr R N Khan and another were directors. This arrangement was duly completed.
From the 1st April 1982 to the 30th September 1983 Industrial Storage & Forwarding occupied Bays 1, 2 and 3 on a letting from NMT and provided warehousing services for Carreras Rothmans. That appears as an agreed fact in the case stated. At the end of September 1983 that arrangement changed. Industrial Storage & Forwarding dropped out of the picture, and indeed the company went into liquidation a few months later. That company's role was assumed by Industrial Storage (Rotherham) Limited, who accordingly became tenants of NMT in place of Industrial Storage & Forwarding Limited. On the 30th September 1983 Industrial Storage (Rotherham) Limited entered into a new contract with Carreras Rothmans.
Industrial Storage (Rotherham) Limited is a company incorporated on the 6th September 1983. It has two directors, of whom Mr R N Khan is one, and Mr R N Khan owns 90% of the shares. After the 30th September Industrial Storage (Rotherham) Limited carried on as warehousemen for Carreras Rothmans. So far as Bays 1, 2 and 3 are concerned, no problem about the rates has arisen. It was accepted that the premises were occupied first by Industrial Storage & Forwarding Limited and then by Industrial Storage (Rotherham) Limited, and the rates throughout the period have been duly paid.
In the case of Bay 4, the premises were not in fact used for any purpose from the 1st October 1982 (when the building was completed) until the 22nd February 1985, a date well after the date of the complaint to the justices. NMT did, however, instruct estate agents, who issued letting particulars. Those are of some importance in the case, and I should therefore refer to them.
The particulars appear on the writing paper of agents describing themselves as "Auctioneers, Valuers, Land and Estate Agents", and, so far as relevant, they read as follows:
"TO LET POSSIBLY THE FINEST WAREHOUSING AVAILABLE IN THE NORTH OF ENGLAND
43,500 sq ft (OR MAY DIVIDE)"
There is then a picture of the premises and a short description as to its location, and the particulars continue:
"AVAILABLE ON SHORT, MEDIUM OR LONG TERM BASIS."
Its situation is further described, and various particulars of the height and construction of the building are given. It is stated, among other details:
"Superb on site security, including controlled security boom."
It continues:
Rent: By negotiation.
Rateable Value: To be assessed.
Lease: Term by negotiation. Lessors are prepared to consider short, medium or long term period:
Available as a building lease or alternatively with full on site facilities provided by one of the leaders in the field of storage, materials handling and forwarding.
Legal costs: In the event of a building lease the lessees to be responsible for lessors' legal costs incurred in the preparation of the lease."
I shall return to consider the effect of these particulars later, but it seems convenient at this stage to make two points. The first is that the expression "building lease" is not used here as is common ground in its normal sense but as indicating a lease available of the building or part of it and not a lease involving any building work. Second, the reference to "full on site facilities provided by one of the leaders in the field of storage, materials handling and forwarding" is not suggested as a reference to NMT as leaders in the field of storage, materials handling and forwarding but as a reference, perhaps, to Industrial Storage & Forwarding Limited or Industrial Storage (Rotherham) Limited.
In holding that NMT were in rateable occupation for the relevant period, the justices relied on six reasons of which (1) and (2) were not so much reasons as statements of agreed facts, which I have already covered in the recitation I have given. I shall accordingly begin by quoting their reasons with No (3):
"(3) We were told, and indeed read for ourselves that the Memorandum of Association of NMT Properties Limited, although primarily an investment company, empowered the appellants to act as warehousemen.
(4) There was no evidence to suggest that in this particular case, any arrangements whatsoever had been made by NMT Properties Limited to offer the lease of the property to an intermediary such as Industrial Storage (Rotherham) Limited were a customer to be found.
(5) We were shown certain agent's letting particulars giving a description of the warehouse itself and indicating that full on site facilities could be made available. It was argued that if such facilities were required, that these would not be provided by NMT Properties Limited but by some other company, such as Industrial Storage (Rotherham) Limited. At the stage in question, however, where no tenant had actually been found and the extent of the service requirements of a prospective tenant are not known, we were of the opinion that there was nothing to prevent NMT Properties Limited from providing certain service requirements themselves in respect of the warehouse.
Even if this did not eventually happen and that NMT Properties Limited did not directly provide the service facilities required, it was evident that they would indirectly provide those services by arranging for the property to be initially let to another company, such as Industrial Storage (Rotherham) Limited, who would undertake to provide whatever services were required, and by introducing the prospective tenant to that company.
(6) They were, in any event, ready to make available warehouse space to take in the goods of a prospective tenant and we agreed with the argument of the counsel for the rating authority that in these circumstances, the warehouse was 'open for business' and that in accordance with the principles laid down in the case of R. v. Melladew and the other cases referred to, NMT Properties Limited was in rateable occupation of the premises."
It is, I think clear from that recital of the justices' reasons that they reached their conclusion in reliance substantially on four things. First, the construction they put on NMT's Memorandum of Association; second, the construction they put on the letting particulars; third, the authorities to which they were referred, and fourth, the findings which were made that it was possible that NMT would either provide warehousing facilities themselves or through a company such as Industrial Storage & Forwarding Ltd or Industrial Storage (Rotherham) Ltd.
I need not linger on the first of those grounds relating to the construction of NMT's Memorandum of Association.
The justices and the learned judge held on the construction of the memorandum that it was within the power of NMT to act as warehousemen if the company chose to do so. That conclusion was challenged in NMT's notice of appeal, but it is a conclusion which, with respect, appears to be plainly correct, and counsel for the appellants did not advance any argument to the contrary. Indeed, he effectively abandoned that point.
I shall go on, therefore, to the second point, namely the construction of the letting particulars. The question does arise as to what this document means and so raises a question of construction. It is, I think, clear beyond argument that by this document NMT were through their agents offering a lease of the building or part of it. That was, I think, the primary object of this document, the natural purpose for which to employ estate agents, and the language employed in the particulars seems primarily directed to finding a tenant of the building or part. It is however suggested, and in my judgement rightly suggested, that there are references in the documents which could be understood to suggest that if a party wanted to use space in the warehouse, but not to take a lease of the building or any part of it, NMT would be ready to arrange for space to be made available through an intermediary company. That is, as I think, a possible construction. But what is significant for present purposes is that there is nothing to suggest that NMT were ever to act as warehousemen. Indeed, on the evidence as a whole, there is nothing to suggest that NMT would in any situation whatever act as warehousemen. They had never done so, and there is nothing to suggest that they ever would. In either of the eventualities envisaged by these letting particulars, NMT would let the premises to a lessee, the lessee being either the party answering the advertisement directly or an intermediate company which might or might not be one of the companies of which Mr Khan was a director.
I turn therefore to the authorities on which the justices also relied. It is convenient to begin with R. v. Melladew. Melladew & Son were a firm of warehousemen, and the premises involved in the case were a warehouse, being one of a block of warehouses in Neptune Street, Liverpool, all being managed by Melladew & Son and all under the control of a warehouseman employed by the firm. The firm admitted that it was in occupation of the premises in question during the period for which rates were claimed with the exception of two periods, one running from the 1st October 1900 to the 12th December of the same year, and the second period running from the 25th February 1904 to the 13th July of that year. The findings of fact include the following:
"(c) During those two periods the warehouse had no goods in it and was closed, and the defendant offered to allow the complainant" i.e.. the rating authority "to keep the keys of the warehouse and invited the complainant to inspect the premises.
(d) The warehouse was a self contained one, and consisted of several floors, and the defendant carried on the business of warehouse keeper there and at adjoining and neighbouring warehouses by letting either the whole of each warehouse or separate floors or rooms in the same, or receiving goods at a certain rent per ton or per package per week. The warehouse formed one of a block of warehouses in Neptune Street, all under the management of the defendant and under the control of one warehouseman in the employ of the defendant."
There was a finding that during the two periods in question a high pressure water supply, needed for operating a hydraulic lift, had been cut off, and that weights, scales and trucks had been removed to an adjoining warehouse. One then comes to finding (i) which in my judgement is crucial to an understanding of the case. It reads as follows:
"(i) Throughout the rating years 1900 and 1904 the defendant continued to carry on the business of warehouse keeper in Neptune Street and elsewhere in Liverpool. Subject to the facts stated in paragraphs (g) and (h)" which I have summarised "the warehouse was ready for the receipt of goods at any minute, and the defendant was at all times throughout the said periods prepared to receive applications for the hire of storage room, and ready and willing to reopen the warehouse and receive goods into it, provided that enough goods were offered to fill half the whole capacity of the warehouse, this being the smallest quantity for which he thought it worthwhile commercially to open the warehouse. With this proviso he was prepared to reopen the warehouse and to let either the whole of it or separate floors or separate rooms, or to let floor space at a tonnage or package rent. Subject to the above mentioned minimum limit, the defendant throughout the two periods was willing to receive goods at the warehouse."
The justices in that case concluded that the firm was not in rateable occupation during the two periods in question. The Queen's Bench Divisional Court affirmed that decision, but the Court of Appeal took a different view. Sir Richard Henn Collins MR, said at p 200:
"It is important to remember, in dealing with questions of liability to pay rates, that occupation, which is the basis of liability, necessarily varies with the nature of the rateable subject matter. The acts necessary to establish occupancy of a dwelling house may be very different from those which might be required to establish occupation of a non habitable hereditament. It is, I think, clear from a comparison of many authorities that the intention of the alleged occupier in respect to the hereditament is a governing factor in determining the question whether rateable occupancy has been established. "
Then on p 202 he said:
"To come to the case before us, the business of a warehouseman need not involve the actual presence on the premises either of the warehouseman himself, or of any representative, or of any movable chattels. If he has the necessary appliances ready for use when the demand for storage comes, he is in a position to do business to which the physical occupation of the premises is indispensable. If he holds himself out to let storage space not involving a demise of the whole warehouse, and, by securing exclusive control over the premises, has put himself in a position forthwith to give the accommodation required, is he to be deemed as not the occupier until some customer has been found to deposit goods for storage? And when he has secured customers, and his warehouse has afterwards again become empty, is he to be deemed as having ceased to occupy? I cannot think that this can be so. I am aware that ownership is distinct from occupation, and that an owner does not make himself rateable by trying to let an house which he has ceased to inhabit. But the principle involved in that proposition does not apply to the case of the tenant of a vacant warehouse who retains control over it for the purpose of letting storage room. In the case of the owner seeking to find a tenant in the case put, no assertion of occupation by him is involved. If he gets a tenant, he substitutes the occupation of another person for his own. The warehouseman in getting a customer supplies visible evidence of his own occupation. In the case of the owner who tries to let the intention is not to occupy. In the case of the warehouseman it is exactly the reverse. It seems to me on the facts found by the justices, which I need not repeat, that the intention of the defendant here was as far as possible to avoid the semblance of occupation while carefully guarding the substance. He carefully retained the control, while his continuous intention was to utilise the premises for the purpose of his business whenever the opportunity offered."
Lord Justice Cozens Hardy agreed with the judgement of the Master of the Rolls. Lord Justice Farwell gave a concurring judgement, our attention being particularly drawn by counsel for the rating authority to the passage at the bottom of p 203:
"The test, in a case like the present, of business premises, appears to me to be, has the person to be rated such use of the tenement as the nature of the tenement and of the business connected with it renders it reasonable to infer was fairly within his contemplation in taking or retaining it?"
And at the bottom of p 204:
"Under these circumstances I find it impossible to say that the defendant has ever given up the use of this warehouse, or withdrawn it from his business so as to cease to occupy it within the meaning of the Act. He has merely kept it as spare room. "
That decision strikes me, if I may respectfully say so, as being plainly right on its facts, but is in obvious contrast with the present case since NMT are not and never have been warehousemen, and Bay 4 at the material time was not and had never been used by NMT or anyone else as a warehouse. The authority is nonetheless of importance as affirming the important principle that the question is one of intention to be decided on all the facts of the case.
Our attention was also drawn to Borwick v. Southwark Corporation [1890] 1 KB 78. In that case a firm of manufacturers, as one sees from the headnote, purchased a building with the object of having premises to which they might transfer their business in the event of their existing factory being burnt or other emergency arising. They put into the building and affixed to the walls some shafting and wooden benches suitable for their business, but no engine or motive power. Lord Alverstone CJ said at p 82:
"I am of opinion that this appeal must fail, though the question is not without difficulty. It seems to me that there was evidence of beneficial occupation. There is no doubt that the appellants can make use of this property if they so choose, and will do so if and when they require it. I think they are making use of it by having the necessary shafting and benches upon the premises in readiness for use."
Then lower down the same page, having been referred to Bootle v. Liverpool Warehousing Co., he said:
"The distinction between the case of Bootle v. Liverpool Warehousing Co. and the present is that in the former the judges came to the conclusion of fact that the owners had no intention to carry on their business in the particular premises which it was sought to rate, whereas here I think the facts do point to an intention on the part of the appellants to carry on their business upon the premises at any moment that they may require to do so."
Lastly we were referred to Associated Cinema Properties Ltd v. Hampstead BC [1944] 1 KB 412, our attention being particularly drawn to a passage in the judgement of the court at p 415. The passage reads as follows:
"It was contended, however, on behalf of the council that the possibility of physical occupation coupled with the 'intention to occupy physically in case of need' constituted rateable occupation. In support of this submission much reliance was placed on the two cases which the justices had regarded as compelling them to hold that the company were occupiers. Of these the first was R. v. Melladew 1 KB 192. The hereditament there in question was a warehouse. Now, it is the business of a warehouseman to let unoccupied space for the purpose of the temporary storage of goods. To be available for this purpose, the warehouse must be empty, in whole or in part. If the owner makes a public announcement that he is prepared to let space in an empty warehouse, he may reasonably be said to be using that warehouse for the purposes of his business. This, briefly, was the ratio decidendi of R. v. Melladew; and it has, in our judgement, no relevance to the present case. Borwick v. Southwark Corporation, which was the other case relied on by the justices, may appear at first sight to give more support to the council's contention. The correctness of this decision has been doubted, and, if it were necessary to read it as affirming the proposition that a mere intention to occupy empty premises in a problematical contingency is equivalent to occupation, we should regard it as contrary to established principle and unsound. It is, however, clearly distinguishable on the facts from the present case."
Counsel for the rating authority placed particular reliance on the passage in the middle of that extract relating to a public announcement, but it was of course in the context of a case in which a public announcement had been made by a warehouseman. Here, as I repeat, there was no foreseeable contingency in which NMT would let space to a customer as a warehouseman.
Counsel for the rating authority propounded the test, which was reflected in the justices' reasons and in the judge's judgement, of whether the premises were open for business. That is no doubt often a useful and helpful approach, but it is not the statutory test. That is whether NMT were at the relevant time in occupation of these premises. If they were in occupation, it can only be because they were using the premises as warehousemen, and in my judgement it is plain on the facts that they were not using the premises as warehousemen and were not in any eventuality intending to do so.
The learned judge said [1988] RVR 110:
"Here counsel for NMT submits that NMT was simply a property company seeking a tenant, not a warehouse company seeking customers, and if he is right about that the magistrates' decision cannot stand. "
It seems to me plain that NMT were not in any realistic sense a warehouse company seeking customers. If they were indeed soliciting custom directly at all, it was with a view to arranging for an intermediary letting, still acting as a freehold owner seeking to arrange an advantageous letting of premises.
I turn, lastly, then to reasons (4) and (5) given by the justices. They say in (4) that there was no evidence to suggest that arrangements had been made by NMT to offer the lease to an intermediary. Factually that is quite correct, but I think that NMT are entitled to submit, as they do, that the finding is essentially irrelevant. It would in the circumstances have been surprising if arrangements had been made for a lease to an intermediary until such time as a warehouse user was in prospect. But what is more significant is that, so far as there was evidence of the company's practice, that practice was to let to an intermediary and not direct to a depositor.
As part of reason (5) the justices have found that there was nothing to prevent NMT Properties Ltd from providing certain service requirements themselves in respect of the warehouse, and that again is factually correct. It does not, however, in my judgement ask the right question, which is not whether there was anything to prevent NMT letting the space direct, but whether they were holding themselves out as warehousemen and whether they were in fact and in truth in occupation. The answer to the correct question is, in my judgement, that they were not. Also as part of their fifth reason the justices say that even if NMT did not directly provide the service facilities required, it was evident that they would indirectly provide those services by arranging for the property to be let initially to another company, Industrial Storage (Rotherham) Ltd, who would undertake to provide whatever services were required. That may well be true, but the reasoning, in my judgement, betrays some slight misunderstanding on the part of the justices, because, had there been such a lease to an intermediary company, it would in all probability have been that company which went into occupation, as it was accepted that Industrial Storage & Forwarding and Industrial Storage (Rotherham) had previously done in the case of Bays 1, 2 and 3. The fact that provision might have been made for such an indirect letting does not have the effect of sustaining the conclusion that NMT itself was in occupation before such letting.
The learned judge ended his judgement in this way. He said at p 112:
"But in all the circumstances it seems to me, as I have indicated, that, although I am by no means convinced that in the place of the magistrates I would have evaluated the matter as they did, they were entitled on the facts to make the findings that they did and accordingly this appeal must fail."
Accordingly it has been argued that the decision was one of fact for the justices with which we should not interfere. This is, however, a case in which there is no relevant disputed fact since all the facts are agreed. The only document now relevant for consideration is the letting particulars, and again the construction of that document is a question of law. The question was whether on the agreed facts and on a proper construction of the letting particulars in the context of those facts the justices could properly conclude that NMT was in rateable occupation of Bay 4 during the relevant period. With respect to the judge and to the justices, I conclude that the justices could not properly reach such a conclusion.
I would accordingly allow this appeal.
STOCKER LJ: I agree, and there is nothing I wish to add.
DILLON LJ: I agree that this appeal should be allowed, but I rest my judgement on a rather narrower point.
The question is whether the appellants were at the relevant time in rateable occupation of Bay 4. As Kennedy J pointed out, of the four ingredients of rateable occupation, the one in issue in the present case is actual occupation. The case for the rating authority depends entirely on the agents' particulars issued by Messrs Merryweather Corbett & Dawson, to which my Lord has referred. Without those, there would be nothing whatsoever to suggest that the appellants were in actual occupation of Bay 4. They had never actually occupied it in any ordinary sense for any business purposes, and in fact Bay 4 was not used for storage or any other purpose until 1985.
The case for the rating authority is founded on the decision in R. v. Melladew, to which my Lord has already referred, but the facts of Melladew were completely different. In that case warehousemen had been carrying on the business of warehousemen in the premises in question. It was said that that business had been discontinued and that the premises were empty, but while they were empty the former warehousemen were still advertising for custom for the warehousing of goods in the premises. In the present case the agents' particulars show that someone presumably the appellants got agents to advertise the property by distributing the particulars, but the particulars seek either a tenant to take what is called a "building lease" of Bay 4, that is to say a lease of the building as a whole or possibly of some part or parts of it, or, alternatively, someone seeking facilities for the storage and warehousing of goods. It is quite plain, and common ground, that if the premises were let on what is called a "building lease", the lessee would be in occupation and liable for the rates and the lessor would not. The rating authority seeks to deduce from Melladew that the advertiser is in occupation because he is seeking people who want warehousing services and facilities in the premises even though he is also seeking something quite inconsistent with his being in occupation. Even assuming that the particulars are to be construed as meaning that the appellants, and not any associated company, were to provide the warehousing services and facilities for customers, it seems to me that the offer of a building lease is wholly inconsistent with any conclusion that the appellants were then, at the time of the issue of the particulars, carrying on a warehousing business and were in occupation as providers of warehousing services. They had not yet decided and they had not yet taken occupation. You could only say that they were occupying as warehousemen if they had indeed decided to carry on that business rather than to grant a building lease, but on the material before the justices, as before us, the whole matter was at large. Consistently, therefore, with Edwards v. Bairstow[1956] AC 14, to which we were referred, the court should interfere. The only conclusion, in my judgement, is that the decision of the learned judge was wrong and should be set aside, and that in answer to the question posed at the end of the case stated, the court should declare that the decision of the justices that the appellants were in rateable occupation of the premises was not a correct decision in law.
WESTMINSTER CITY COUNCIL V. SOUTHERN RAILWAY CO., THE RAILWAY ASSESSMENT AUTHORITY, AND W. H. SMITH & SON, LTD.
WESTMINSTER CITY COUNCIL AND KENT VALUATION COMMITTEE V. SOUTHERN RAILWAY CO., THE RAILWAY ASSESSMENT AUTHORITY, AND THE PULLMAN CAR CO. LTD.
References: [1936] AC 511; [1936] 24 R&IT 278
House of Lords
Lord RUSSELL OF KILLOWEN: My Lords, My noble and learned friend the Master of the Rolls has prepared, and allowed me to peruse, an opinion upon the subject of these appeals, which deals in detail with the points raised and argued before us, and states the conclusion to be reached in regard to each of the premises in question in these appeals. While I agree with his reasoning and conclusions, except as to one comparatively unimportant matter, I have thought it advisable to add some observations of my own.
The questions which we have to decide may be said, if envisaged from one point of view, to arise for decision for the first time: but looked at from another angle their solution involves a consideration of former authorities on the question of rateable occupation. They are, however, essentially new questions, for we have to decide for the first time whether premises are so let out as to be capable of separate assessment.
The Railways (Valuation for Rating) Act, 1930 (which may be conveniently referred to as the Act of 1930) put an end to the system of valuing railways for rating purposes which was formerly prevalent in hereditament in England; the particulars relating to each railway company being entered in a separate part of the roll. Having ascertained the net annual value of the undertaking as a whole, the authority has to apportion that value among all the railway hereditaments in England occupied by that railway company. The relevant matter to note is that nothing which is not a "railway hereditament" is to be included in the roll. Any hereditament which is not a "railway hereditament" is liable to be rated by the appropriate authority, under the general law of rating.
The crucial provision of the Act of 1930 at this point comes into view, namely, the definition of "railway hereditament". It runs thus:
"Railway hereditament means, subject as hereinafter provided, any hereditament occupied for the purposes of the undertaking of a railway company:
"Provided that no premises occupied as a dwelling house, hotel or place of public refreshment, or so let as to be capable of separate assessment, shall be deemed to be, or form part of, a railway hereditament."
Other parts of the Act of 1930 make it clear, in my opinion, that nothing can be a "railway hereditament" unless it is occupied by the railway company; and it was common ground in the arguments addressed to us that the word "capable" in the proviso meant capable both in fact and in law. Further it is to be observed that by the words it subject as hereinafter provided ", the proviso is incorporated into the definition. Three results would appear to follow: (1) that premises, by whomsoever occupied, if occupied as a dwelling house, hotel or place of public refreshment, can never be deemed to be or form part of a railway hereditament; (2) that no premises which, according to law, are in the rateable occupation of some person other than the railway company can be deemed to be or to form part of a railway hereditament; and (3) that such premises might in fact form part of a railway hereditament.
It was contended before us that the effect of this statutory definition, by virtue of its reference to capability of separate assessment, gave statutory recognition and effect to certain decided cases, with the result that your Lordships were in some way bound to treat them as correctly decided, and unable to give effect to a contrary view, should you happen to be convinced that such contrary view was right in law. I can attribute no such effect to the definition. It is open to your Lordships to declare what you conceive to be the law, unhampered by any statutory restriction.
Before considering the particular circumstances affecting the respective premises which are the subject of this appeal, I would in the first place call attention to s. 91 of the Southern Railway Act, 1924. Under that section the Southern Railway Company, has power to
" build ... shops ... offices or any other similar buildings ... on ... any station or railway of the company ... and to ... sell demise let or otherwise dispose of the freehold or any other interest of or in any buildings or any part or parts of buildings erected or to be erected ... over any such station . . . of the Company or on the site thereof and also to sell demise let or otherwise dispose of the right to build ... on ... any such station or railway or upon the sites thereof respectively."
In other words it has power to carve out of any station separate premises, which though still within the precincts of the station and in one sense forming part of it, may yet be disposed of to others, even for an estate in fee simple. The great majority of the premises which are the subject of this appeal have been so carved out, and are in fact situate within the precincts of Victoria Station. They may nevertheless, though themselves within the confines of the station, which itself is a railway hereditament, neither be a railway hereditament nor even form part of a railway hereditament, if they are "so let out as to be capable of separate assessment."
In the next place I would make a few general observations upon rateable occupation. Subject to special enactments, People are rated as occupiers of land, land being understood as including not only the surface of the earth but all strata above or below. The occupier, not the land, is rateable; but, the occupier is rateable in respect of the land which he occupies. Occupation, however, is not synonymous with legal possession: the owner of an empty house has the legal possession, but he is not in rateable occupation. Rateable occupation, however, must include actual possession, and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation. Where there is no rival claimant to the occupancy, no difficulty can arise; but in certain cases there may be a rival occupancy in some person who, to some extent, may have occupancy rights over the premises.
The question in every such case must be one of fact namely, whose position in relation to occupation is paramount, and whose position in relation to occupation is subordinate; but, in my opinion, the question must be considered and answered in regard to the position and rights of the parties in respect of the premises in question, and in regard to the purpose of the occupation of those premises. In other words, in the present case, the question must be, not who is in paramount occupation of the station, within whose confines the premises in question are situate, but who is in paramount occupation of the particular premises in question.
A familiar instance of this competing occupancy is the case of the lodger. It has long been settled on the one hand that, in the case of lodgers in a lodging house, the lodgers are not rateable in respect of their occupancy of their rooms, but that the landlord is the person who is rateable in respect of his occupancy of the entire house. In view of the frequently fleeting nature of the occupancy of a lodger, the convenience of this view, indeed the necessity for it, is obvious; but it purports to be based upon the paramountcy of the landlord's occupation, arising from his control of the front door and his general control over and right of access to the lodgers' rooms for the proper conduct of the lodging house. And the same view as to rateability has prevailed in the case of the business lodger. On the other hand the occupation of a person residing in a flat is such that he is (generally speaking) rateable, although as a matter of practice, the owner of the block of flats usually pays the rates charging the tenant an inclusive rent.
My Lords, I cannot but feel that the position of the lodger in relation to rateability is an exceptional one, and is largely the product of practical considerations. But it can I think be justified and explained when we remember that the landlord, who is the person held to be rateable, is occupying the whole premises for the purpose of his business of letting lodgings, that for the purpose of that business he has a continual right of access to the lodgers' rooms, and that he, in fact, retains the control of ingress and egress to and from the lodging house, notwithstanding that the power of ingress and egress at all hours, is essential to the lodger. The general principle applicable to the cases where persons occupy parts of a larger hereditament seems to be that if the owner of the hereditament (being also in occupation by himself or his servants) retains to himself general control over the occupied parts, the owner will be treated as being in rateable occupation; if he retains to himself no control, the occupiers of the various parts will be treated as in rateable occupation of those parts.
What I may call the landlord control principle has been applied to cases other than lodgers. Thus in Allan v. Liverpool Overseers and Rochdale Canal Co. v. Brewster, the Mersey Dock Board were held to be in rateable occupation of premises (part of their dock system) which they had appropriated to the use of others. In each of these cases the true ground of the decision was, I think, that the use to be made of the appropriated premises by the occupiers thereof was subject to the general control of the Dock Board. LOPES LJ in Rochdale Canal Co. v. Brewster, put it thus:
" In this case I have come to the conclusion that there is such a predominating right of control reserved to the Board as to prevent the occupation being so exclusive as to be rateable. In my judgement, what passed to the respondents was the licence to use the accommodation of the, cranes, quays, land and water berths subordinated to the superintending control of the Board a mere incorporeal right. They could not exclude the Board."
The Lord justice is pointing out in other words that the Board had retained the right of control over the use made of the appropriated part by the occupants thereof. On the other hand a different result was reached in the case of Young & Co. v. Liverpool Assessment Committee.There such rights as were reserved to the Mersey Dock Board did not involve any control over or interference with the carrying on of their business on the appropriated parts by the occupants thereof.
Another case to be noted in this connection is theLondon and North Western Rail. Co. v. Buckmaster. I confess that I regard that authority as unsatisfactory. BLACKBURN J. held that the Railway Company had, while giving a right to the Clay Cross Company to put horses in the stable, retained themselves such control over the stable that the Clay Cross Company had not exclusive occupation. In coming to this conclusion he relied upon a clause binding the Clay Cross Company to observe the byelaws and regulations for the use of the Railway Company's stations, premises and conveniences. QUAIN J. agreed with hesitation, though he seems to have thought that the agreement was merely one to provide stabling accommodation. He relied however on the bye laws clause and upon the Railway Company's control of the outer gates. ARCHIBALD J. also agreed, but upon the ground, insufficient per se, that the agreement was not a demise but a mere easement of occupation. In the Exchequer Chamber the six judges were equally divided, with the result that the decision below stood. Three judges held that the railway company were rateable because they retained control of the stables; the other three held that the Clay Cross Company had occupation and possession of the particular premises, and were rateable accordingly. For myself I would have decided in accordance with the latter view; but from any aspect the authority is an unsatisfactory one and well deserved the reservation of opinion expressed by BRETT LJ in the later case relating to Smith's bookstalls. Moreover having regard to the views which prevailed in Cory v. Bristow, it would seem that too much weight was attributed to the clause as to observance of bye laws.
In truth the effect of the alleged control upon the question of rateable occupation must depend upon the facts in every case; and in my opinion in each case the degree of the control must be examined, and the examination must be directed to the extent to which its exercise would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them, or would be inconsistent with his enjoyment of them to the substantial exclusion of all other persons.
Before I turn to a consideration of the particular premises in Victoria Station (or some of them) which are here in question, let me say at once that I regard the forms of the documents under which they are "let out" as of small importance. There can I think be no doubt that a view once prevailed that in order to constitute rateable occupation it was necessary that the occupier should be in the position of a tenant of the land; and that a mere licence to occupy, or a title to occupation in virtue of a right in the nature of an easement was not enough. Further, although authorities had established that the existence of a tenancy was not necessary, but that rateable occupation could exist in one who occupied only by virtue of a licence or easement, the old error still prevailed at times. Thus in the case of the Holywell Union v. Halkyn Drainage Co, although a Divisional Court had held that the Company's easement involved occupation of such a character as to be rateable occupation, the Court of Appeal reversed the decision on the ground that an easement was not subject to rate, and that since the ownership of the tunnel had not been conveyed to the company but only an easement in it, the company had nothing in respect of which it was liable to be rated. The House of Lords restored the order of the Divisional Court, holding that the occupation which the company enjoyed under their deed for the purpose of drainage was exclusive and therefore rateable.
In my opinion the crucial question must always be what in fact is the occupation in respect of which someone is alleged to be rateable, and it is immaterial whether the title to occupy is attributable to a lease, a licence, or an easement.
I now turn to consider the premises in Victoria Station other than W. H. Smith & Son's bookstalls. These require separate consideration for reasons which will hereafter appear. One group consists of separate premises of a permanent character not forming part of a building used by the railway company for its own purposes. An instance of this is the National Provincial Bank. I feel no doubt that this is not a railway hereditament. Indeed the only argument of substance in favour of the contrary view was the fact that it was within the station precincts, and that therefore access thereto was cut off during the few hours at night when the station was closed. This, it was said, was the control which reduced the National Provincial Bank to the position of a lodger in their banking premises and demonstrated that their occupation thereof was merely subordinate to that of the Railway Company. A strange situation surely for a bank. Indeed this was the only argument of substance in regard to any of the premises of this class. But for this shutting off of access at night time they would all be in substantially the same position as the two shops as to which the Railway Company abandoned their appeal before the Railway and Canal Commission and which the Railway Company has conceded are not railway hereditaments.
I cannot, however, accede to the view that because the bank could not, without the consent of the Railway Company, get to the bank premises during a few hours in the middle of the night, in which no banker would normally desire to go to his bank, and throughout which hours the bank is in fact occupying the premises by means of its goods and furniture, therefore the paramount occupant of the bank premises is the Railway Company, and the occupancy of the bank is a merely subordinate affair. Other features affecting the bank's occupancy upon which some reliance was placed were (1) that the Railway Company may decide upon the line of approach to be used by the bank and their employees in going to the premises; (2) that the Railway Company reserve certain rights for the purpose of controlling pipes and cables which run through under or over the premises; and (3) that the bank must observe the bye laws and regulations as to the management of the station, and the requirements of the station master for the management of the station business and traffic. I can find nothing in these provisions inconsistent with the bank having and enjoying the exclusive occupation and possession of the bank premises for the purposes for which they are occupied, namely, for the purposes of a bank.
In my opinion the bank premises are so let out as to be capable of separate assessment; they are not a railway hereditament within the meaning of the Act of 1930, and they should not be included in the railway valuation roll.
My Lords, with the exception of the Beckenham premises, the show cases and W. H. Smith & Son's bookstall, this view applies, in my opinion, also to all the other premises under consideration in these appeals. I can see no real ground for drawing any distinction in the case of any. Each of them is so let out as to be capable of separate assessment and, not being a "railway hereditament" should be omitted from the roll.
As regards the show cases, a separate point arises in regard to them, namely, whether the site which each occupies is land used for the exhibition of advertisements or for the erection of a structure used for the exhibition of advertisements but not otherwise occupied, within the meaning of s. 3 of the Advertising Stations (Rating) Act, 1889. The point is of comparatively small importance; but, in my opinion, the sites occupied by the show cases fall within the words of the section. It is true that they contain goods but the goods in the show cases are not themselves offered for sale; they are displayed for the purpose of advertising the goods which are offered for sale elsewhere. They fulfil the same advertising purpose as would be fulfilled by a printed description or a pictorial representation of the same goods. They seem to me to be advertisements and nothing else; and the land occupied by a case which contains them seems to me to be both land used for the exhibition of advertisements and land used for the erection of a structure used for the exhibition of advertisements; nor is it otherwise occupied. I would hold that the Railway Company was rateable in respect of the showcases, but only by reason of this special statutory provision.
As regards the premises at Beckenham I desire to add nothing to what is contained in the opinion of the Master of the Rolls as being the grounds upon which they should be excluded from the roll
There remains for consideration the question of W. H. Smith & Son's bookstalls. They require somewhat separate treatment because the question of their rateability under the general rating law was the subject of decision in the Court of Appeal some 53 or 54 years ago. The present agreement under which W. H. Smith & Son, Ltd, occupy the sites of their bookstalls is dated September 11, 1929, but is in substantially the same form as the one in force when the case of Smith v. Lambeth Assessment Committee was decided. It is in form a licence to erect and continue in the stations such bookstalls as may be necessary, the number nature and position being subject to the general manager's approval who may order the removal of any bookstall to any other site within the station. Access by all, whether servants or customers, is subject to the Railway Company's bye laws. The bookstall employees, while on the railway premises, are to be under the control of the general manager and the station master, and in case of an employee misconducting himself at a station, he is to be removed by the licensees or, in default, by the Railway Company.
The bye laws are to be observed; the bookstall servants are not to obstruct the Railway Company's servants and are to conform to the Railway Company's reasonable orders; and no employee is to be retained, contrary to the decision of the general manager. Finally the Railway Company may exercise some control over what is sold at the bookstall; the licensees agree not to offer for sale publications of a certain objectionable character. Here no doubt there is power to exercise some slight control over the occupants' user of the site, in that they bind themselves not to offer for sale any book, pamphlet or other publication of an indecent, immoral, indelicate, illegal or seditious character, or relating to medicines for complaints or ailments of an indecent or indelicate nature; a restrictive provision which might well find its place in the lease of business premises to a bookseller as to whose rateable occupation no shadow of doubt could exist. In my opinion the occupation by W. H. Smith & Son of the sites of their bookstalls is no different from the occupation of the site of the bank premises by the National Provincial Bank Ltd.: it is just as exclusive, just as paramount for rating purposes, just as permanent, and therefore just as rateable; and this notwithstanding the old decision of the Court of Appeal in Smith v. Lambeth Assessment Committee. That decision does not commend itself to my judgement. LINDLEY LJ in a subsequent case explained it as a case in which it was sought to rate the same thing twice over. However that may be, it appears to me to afford another instance of the old fallacious view that a demise was necessary and a C mere licence was insufficient to create rateable occupation. Thus BAGGALLAY LJ having pointed out that no part of the station had been demised to W. H. Smith & Son said:'
" It is clear to me that Smith & Son are not rateable, for the effect of the indenture was simply to grant a licence ... where an exclusive occupation is conferred, the grantee becomes rateable; but, where merely a right to an exclusive enjoyment passes, the grantee takes no interest which renders him liable to be rated."
BRETT LJ states the question as being, was there a demise or a mere licence to sell and display, and he answers it thus: " there has been no demise; the indenture creates only a licence or privilege with certain auxiliary rights," and therefore he holds that W. H. Smith & Son had no rateable occupation. LINDLEY LJ held there was no rateable occupation because there was no demise of any part of the station, but merely a grant of certain privileges, and no right to continue in occupation of any particular spot. It seems to me that the true question was not considered namely, the nature of the de facto occupation by W. H. Smith & Son of the particular sites in respect of which they had been rated. The only question considered appears to have been whether W. H. Smith & Son had had sites demised to them, or whether they had a title to occupy the particular sites; but rateability does not depend on title to occupy, but on the fact of occupation. In my opinion, the sites of the bookstalls in question on the present appeal are so let out as to be capable of separate assessment. They are not railway hereditaments nor do they form part of a railway hereditament.
For the reasons which I have endeavoured to indicate I would allow these appeals except as regards the show cases. I understand, however, that your Lordships think that the show cases do not come within the special statutory provision of the Act of 1889. Upon this footing I agree that the appeals should be wholly successful.
I think it right to point out that this result accords with what I think would have been the decision of MACKINNON J. had he not felt himself bound to decide otherwise by reason of the decision in Smith v. Lambeth Assessment Committee.
Lord MACMILLAN: My Lords, I have had the privilege of studying in advance the opinion which my noble and learned friend Lord Russell of Killowen has just delivered and also that which the Master of the Rolls is about to deliver. They deal so exhaustively and to my mind so satisfactorily with the varied subject matter of these appeals that it only remains for me to express my agreement with them. Upon the one minor point on which my noble and learned friends are in disagreement namely, as to the application of the Advertising Stations (Rating) Act, 1889, to the show cases in Victoria Station, I find myself on the side of the Master of the Rolls. The Act deals with " land used temporarily or permanently for the exhibition of advertisements or for the erection of any hoarding, post, wall or structure used for the exhibition of advertisements."
I read the word "advertisements" here in its commonly accepted sense as referring to bills and posters, and while the goods contained in the show cases are undoubtedly placed there for the purpose of advertising their merits, I do not think that the goods themselves are advertisements within the meaning of the Act. The land occupied by the show cases is accordingly not, in my opinion, used for the "exhibition of advertisements," although it may be said to be used for the purpose of advertising. The exhibition of actual goods for advertising purposes is a comparatively modern innovation and at the period when the statute was passed, as appears from the law reports, the question in agitation was as to the rating of bill posters' hoardings; it is reasonable to infer from this as well as from the language of the statute that it is to this type of advertising that the Act was intended to apply.
I desire to add only a few words as to the Scottish cases which have arisen under the Act of 1930. The problem arising with regard to the subjects to be included in or excluded from the railway valuation in Scotland is identical with that presented in England, for in s. 22(9) of the Act, which contains provisions as to the value of the Scottish portions of a railway undertaking carried on in England and in Scotland, it is enacted that, for the purposes of that section, "premises occupied as a dwelling house, hotel or place of public refreshment or so let out as to be capable of separate assessment shall be deemed not to form part of a railway company's undertaking." The words I have quoted are an echo of the proviso to the definition of "railway hereditament" in s. 1 (3)of the Act which has been so fully discussed in the present appeals. Their effect, as Lord Hunter points out in London and North Eastern Rail. Co. v. Glasgow Assessoris "to assimilate the position in England and Scotland so far as subjects which are to be deemed part of the undertaking for rating purposes are concerned."
Under the former law in Scotland, contained in s. 20 of the Lands Valuation (Scotland) Act, 1854, the question in the numerous cases which arose was whether particular subjects formed part of the railway undertaking. It is not without interest to note that in North British Rail. Co. v. Greig and Mackay, it was held that station refreshment rooms let to a tenant were not part of the railway undertaking, while railway bookstalls were. Both Lord Hunter and more emphatically Lord PITMAN in Allan & Sons Billposting, Ltd. v. Clydebank Assessor express the view that the formula defining "railway hereditament" in s. 1(3) and embodied in s. 22(9) provides a new statutory test which supersedes the necessity of referring to the authorities under the previous law. That is no doubt largely true but the new statutory test itself contains words which require construction. It is necessary to determine whether the subjects are " let " or whether only a licence to use them has been given such as does not amount to a letting; and it is necessary also to determine whether they are "capable of separate assessment," for it is plain from para. 21 of the 11th Schedule to the Local Government Act, 1929, that a hereditament may be let out to a tenant "but not so as to be capable of separate assessment." On these points, as your Lordships have found, it may still be useful to seek light from some of the earlier cases.
My Lords, I do not propose to detain your Lordships by an examination of the Scottish cases under the Act. It is enough to say that I do not find anything in them which is inconsistent with the conclusions which your Lordships have reached in the present appeals, of which indeed I find an intelligent anticipation in Lord PITMAN'S statement that " if a site for a shop is let out, whether it be a space on the platform of a railway company or otherwise within the premises, it must be deemed not to be part of the undertaking ": Allen and Sons Billposting, Ltd. v. Clydebank Assessor .This is the more fortunate in that in Scotland appeals from the decisions of the Assessor of Railways and Canals (now, I understand, called the Assessor of Public Undertakings) are heard by the Lands Valuation Appeal Court, which is a court of ultimate jurisdiction from which no appeal lies to this House, although, as Lord SANDS pointed out, the interpretation of a statute by your Lordships must be treated by that court as binding: Aberdeen Assessor v. CollieHence the importance of the present decision as affecting Scotland as well as England.
Lord Wright: My Lords, the questions in these appeals arise under the Railways (Valuation for Rating) Act, 1930, which I shall refer to as the Act. Under the Act the Railway Assessment Authority is required to prepare a railway valuation roll showing the net annual and rateable values of every railway hereditament in England. The question before the Assessment Authority and on appeal before the Railway and Canal Commission was whether the premises (to use a neutral term) here in question are, or are not, railway hereditaments, or in other words whether they should be excluded from, or included in, the railway valuation roll. The Assessment Authority included some and excluded others, but the Railway and Canal Commission on appeal have included them all as being railway hereditaments. The Corporation of the City of Westminster, as the rating authority, now appeal to your Lordships and contend that the premises should all be excluded from the roll and separately rated.
The main purpose of the Act is to establish a single valuation of the railway undertaking as a whole, in place of the old practice of valuing each hereditament separately in the parish or rating area in which it is situate: the undertaking having been valued as a whole in so far as carried on in England, that value is to be apportioned among the railway hereditaments in England occupied by that railway company (s. 3).
In order to prepare the roll it is necessary to determine what are and what are not railway hereditaments, according to the definition in s.1 (3) of the Act, which is as follows:
" 'Railway hereditament' means, subject as hereinafter provided, any hereditament occupied for the purposes of the undertaking of a railway company:
Provided that no premises occupied as a dwelling house, hotel or place of public refreshment, or so let out as to be capable of separate assessment, shall be deemed to be, or to form part of, a railway hereditament."
'Undertaking' in relation to a railway company includes, in addition to the principal undertaking of the company:
(a) any canal, dock or harbour undertaking carried on by the company;
(b) any subsidiary or ancillary undertaking carried on by the company, not being a road transport, sea transport or air transport undertaking; and
(c) the share of the company in any joint undertaking carried on by, or on behalf of, two or more railway companies not being a road transport, sea transport or air transport undertaking;
but, save as aforesaid, does not include the share of the company in any joint undertaking."
Before seeking to ascertain the effect of this definition, it is necessary to state the character of the premises round which the dispute centres, which is sufficiently shown by the photographs produced; the nature of the businesses severally carried on in them or the use to which they are put; and the terms of the letting under which they are held.
The premises which have been selected for examination in these proceedings are certain premises in Victoria Station and certain others in Beckenham Station. Both these stations are the property of the respondents, the Southern Railway Company. I shall deal first with Victoria Station.
The premises in Victoria Station are numbered V1 to V41: they are mostly shops of the lock up variety, and in particular that type of shop generally known as a kiosk: there are also a branch of the National Provincial Bank, certain business offices on the first floor, W. H. Smith & Son's bookstalls, two hairdressing establishments and a few miscellaneous premises which are of small importance. All these premises can only be entered from the station, mostly from the open space within the station, called the "concourse": they are all within the limits of the station, which is enclosed by its outer gates, all of which are closed by the Railway Company between 12.45 a.m. each night and 6 a.m. each morning, except for a short period at 4.30 a.m. In this way access to the station is shut off during these times, save by special permission of the Railway Company.
The bank, as appears from the photograph, is a two storey building, with a door in the centre opening on to the bank. Among the shops is Boots' chemist shop, a well stocked chemists' lock up shop with a basement; the shop has been formed by taking a room on the first floor of the Station Hotel premises, by opening up the outer wall and replacing it by a double fronted shop front. Sassoons is a long fronted shop, with two doors, displaying for sale carpets and fancy goods; there are also flower and fruit shops with glass fronts and sides, and entrance doors, but only one of these is now in question as the Railway Company did not object to the other two being excluded from the roll, on the ground that, though the main entrances were from the station, there were also entrances from the roadway outside. There is an omnibus office, built of wood framework with glass sides and entered by a door. The majority of the premises are kiosks, of greater or less size, for the sale of tobacco or confectionery; in these the customer is served outside, the shop attendant being inside: the type is too familiar to need further description.
Another class of premises are what have been called show cases; these are of small dimensions, exhibiting articles dealt with by the companies whose names they bear: they are built or placed against walls of the station, except one, which is erected in a central space on the concourse; necessary attachments are made for lighting. There is also a small office, partitioned off from the booking office, let to the Travellers Insurance Association, Ltd., for the insurance of baggage. Of the two hair dressing establishments, one is in the basement and consists of a large space partitioned off from the lavatories; the other is on the first floor, approached by a staircase. There are two office premises, one set occupied by the Pullman Car Co., Ltd., on the second floor, approached from the station by an outer door, of which the Railway Company have the key, and by a corridor, jointly used by the Railway Company, but the offices themselves are self contained. Much the same is true of the other set of offices, occupied by Bowman, Leadam & Grinling, Ltd. There are two other premises of trifling importance; one is an office let to the Postmaster General as a waiting room for his staff: this is in the passenger gallery, which is approached from the platforms by stairways, the exit (closed at the same time as the other gates) being on the Eccleston Bridge. There is also a small Nissen hut, of corrugated iron, to hold a small car, but dignified by the name of a motor garage.
The bookstalls used by W. H. Smith & Son, Ltd., must be separately described. They are four in number and differ in size. They are constructed of timber, cut and shaped by the Company's workmen at their workshops and fitted and put together on the sites which they occupy in the station. They are of the construction familiar to all, and are of considerable size: they occupy their sites by their own weight: they have all been used on their present sites for some years without being moved, though it is said in evidence that it is possible to move them by mechanical devices. They have pipes or cables fixed for lighting and so forth attached to the structure of the station'
All these premises are in fact possessed and used by the various persons to whom they are let by the Railway Company for the purposes of their several trades or businesses.
The premises at Beckenham junction are all within the area enclosed by the Railway Company's station yard, the outer gates of which are closed between the hours of 8.30 p.m. and 6 a.m., and all day on Sundays. Access to the station yard is thus controlled by the Railway Company, though they in practice give permission to the tenants, if they ask for it, to enter at times when the yard is closed. Certain of the premises, the subject of this appeal, consist of buildings of a permanent character, with stacking ground or storage bays attached; the tenants are builders' merchants, who use the buildings as offices and showrooms; certain other of the premises consist of a raised stacking ground, for builders' materials, with a concrete retaining wall, whereas others consist of open stacking grounds or bays for sand or other building material; in all cases the spaces let are defined and delineated on plans.
I must next examine the various agreements under which the premises at Victoria Station are held. Some are in the form of a demise or tenancy agreement, others purport to grant a licence. But substantially their effect is the same so far as concerns what is material in this appeal, that is the question whether there is or is not de facto occupation. I shall first summarize (so far as seems relevant) the effect of the form adopted in the largest group, and then refer briefly to some differences to be found in the other agreements.
I shall take as a sample of the most numerous class the agreement dated May 15, 1931, between Frederick Hotels, Ltd. (described as licensees) and the railway company: the licence is to occupy and use the site situate in the booking hall and the building erected thereon, with access over the Company's adjoining premises at such time as the Company's premises are ordinarily open for business purposes; reserving the right to the Company to close their premises during the hours that they are not used for public traffic and a right to close temporarily for any special occasion: the licensees are to pay a yearly sum (free of all deductions except property tax) and a percentage of gross profits.
The licensees are to pay all rates and taxes if the premises are separately assessed, and repay the same to the Company if the premises are included in the Company's assessment. There is the usual covenant to repair and yield up in good repair. The licensees are to permit the Company to enter on the premises (a) to view their state and condition, (b) to inspect and repair the Company's own adjoining premises. There are covenants against carrying on noisy or offensive trades or storing explosive or dangerous substances and so forth. The licensees agree to observe bye laws and regulations made by the Company with respect to the conduct and management of the Company's premises, and the Company are entitled to require the removal from the Company's premises of any employee whose conduct is objectionable. There is a clause for re entry on non payment of rent or insolvency; there is also a clause giving the Company a lien on the licensees' goods and property upon the premises; and the licensees agree that they shall not have any claim for compensation for loss of goodwill (except under the Landlord and Tenant Act, 1927). This agreement is for one year and for any renewal period.
Other agreements, not otherwise substantially different, are in the form of a demise, with a covenant against assigning or underletting, and with covenants for quiet enjoyment. In certain of the agreements, the Company reserve power to resume immediate possession of the premises if expedient for the alteration of the station or the railway lines.
The agreement relating to the National Provincial Bank is for a lease for twenty one years of the ground floor site, with access for the bank's customers during such times only as the bank is open for the conduct of public banking business. It contains the usual terms of a lease, with other terms similar to those set out above. Other agreements, also in the form of leases, carry the right of ingress to and egress from the premises from and to the station during such times only as the station is open for public traffic, and in some cases the right is reserved to the Company to close the station temporarily during an emergency. The agreement relating to the Pullman Car Company's offices provides for the control by the Railway Company of the outer door or entrance to the building; the door is to be kept open during ordinary business hours and not to be opened for exit after such hours. It is in form a tenancy of the offices, with right of ingress and egress over the common staircase, but otherwise with the usual terms of a tenancy: the evidence was that each night the tenants' servant left the key of the offices with the Railway Company's attendant, who handed it next morning to the office cleaner: that course seems to have been adopted for the convenience of the tenants.
The agreements for the show cases are in a different form. They are in form simply applications for permission to exhibit and maintain advertisements, subject to conditions which present no special features.
The agreement in reference to the ladies' hairdressing saloon is in form a licence, but the licensee is to pay all rates and taxes (including landlord's property tax), and is to repair, clean and light the premises and keep them open during such hours as the Railway Company legally require: there is a provision for all rights of re entry and otherwise of 'a landlord, and a provision against assigning the agreement without consent.
The only other agreement to which I need refer in detail is that of W. H. Smith & Son, Ltd., which presents special features. It is dated September 11, 1929, nine months before the Act came into force, and is for a period of twenty one years, subject to earlier determination in certain events. Like many of the other agreements, it contains a clause that it is to be deemed to be a licence only and not a demise or lease or tenancy. The first clause gives a sole licence to sell books, etc., in the Railway Company's stations. Later clauses license the licensees to erect bookstalls on the platforms, the number, size, nature and position of which are to be subject to the approval of the general manager of the Company, who has power to order the removal of any bookstall to another site in the station if he thinks it convenient for business or traffic. There is also the grant of all necessary ingress and egress for the licensees, their servants, customers and subscribers, subject to the Company's bye laws, rules and regulations at all proper and reasonable times.
I must also refer, as relevant to the extent of control exercised by the Railway Company, to the provisions (1) that the licensees' employees while at the stations or on the Company's premises shall be under the control of the Company and any employee misconducting himself shall be immediately removed from the stations and premises by the licensees, (2) that the bookstalls shall be conducted in a regular and proper manner, (3) that the licensees' employees shall observe the Company's bye laws and orders properly given by the Company's servants for the purpose of enabling the Company to carry on its business, (4) that the licensees shall not offer or advertise for sale any indecent or otherwise objectionable book. There is a condition against assignment of the benefit of the agreement. The licensees undertake to repair the bookstalls. The Company are to have a power of distress. The Company are to be paid by a share of gross profits, with a guaranteed minimum sum. There is no reference to rates or taxes.
At Beckenham Junction, the agreements are in substantially identical terms. To take one instance, one of the agreements grants a licence to At Beckenham junction, the agreements are in substantially identical plan. The licence is terminable on three months' notice by either party. The licensees are to pay or bear rates and taxes (except landlords' property tax) in the event either of the premises being separately assessed or not, and there is a power of distress as if for rent in arrear and as if the licensees were tenants. Clause 3 calls for special notice: it is in these terms:
"The Company their agents servants and licensees shall have free entrance and access to and over the said premises for all purposes and at all times."
There is a provision against the licensees assigning. The licensees must not use the premises except for goods which have been or will be, conveyed over the Company's system. They and their servants are not to be on the premises or in the goods yard when the yard is not open for business save with the consent of the station master or goods agent. They are likewise to comply with any statute and all bye laws orders and regulations affecting the user or occupation of the premises. They are to keep the premises and any buildings they erect in good and clean order and repair. The Company are to have a lien on goods or other property of the licensees while on the premises. The Company have power to determine the agreement in certain events, such as insolvency, and the licensees are to have no claim to compensation for goodwill. The agreement is merely to convey a right in the licensees to enter on the premises to exercise the licence, and is not to create any leasehold interest or tenancy.
On the facts and documents which I have outlined the Railway Assessment Authority included certain hereditaments in the roll and excluded others. The line of demarcation which they adopted at Victoria Station seems to have depended on whether a customer entered the shop or other premises or did his business from the outside. The bank and Boots' shop fell within the former category; most of the kiosks fell within the latter, but some kiosks were placed on the roll, on the ground that the counter was so recessed in the middle of the front of the kiosk that the customer stood within the general line of the front at each side of the counter. This criterion was not relied on by either side before your Lordships.
On appeal, the Railway and Canal Commission held that all the hereditaments about which either side appealed, should be included. All three judges regarded the case as covered by the authority of Smith v. Lambeth Assessment Committee; but MACKINNON J. indicated that but for that authority he would have been inclined to answer in the other sense. Sir Francis Taylor (with whom Sir Francis Dunnell C agreed) was of opinion that the various tenants had only a subordinate occupation, the Railway Company being in paramount and exclusive occupation and therefore rateable, so that the premises of the tenants were not capable of separate assessment; he particularly relied on the fact that the Railway Company had sole control of the means of access to the station enclosure. This conclusion he applied also to the premises at Beckenham. He made a careful analysis of the authorities which he treated as binding him.
I shall now turn to the language of s. 1 (3) of the Act. The essence of the definition is that the railway hereditament should not merely be occupied by the Railway Company but occupied for purposes of the railway undertaking: the scope of the term " railway undertaking " is explained to some extent by the exclusion of road transport, sea transport and air transport, and by the inclusion of any subsidiary or ancillary undertaking which the Railway Company carries on. It is clear, therefore, that the Company may occupy hereditaments which are not railway hereditaments, because they are not occupied for purposes of the undertaking as, e.g.., for road transport purposes.
Now it is true that the Southern Railway Company occupies the Victoria Station as a whole for purposes of the undertaking, but it must be ascertained whether the same can be predicated of the different premises in question in these proceedings. The Company, under s. 91 of the Act of 1924, has power (inter alia) to hold, sell, demise, let or otherwise dispose of the freehold or any other interest of or in any buildings erected on the site of any station, or the right to build on any station.
The Company therefore has power to let out any or all of the premises in question in Victoria Station. Before they let them out, or if they do not let them out, the premises, or at least the site, are occupied by the Railway Company and, if occupied for purposes of the undertaking, form part of the railway hereditament. They seem, therefore, to be capable of coming within the proviso in s. 1 (3) which, I think, contemplates that the Company by an appropriate letting out could carve out of the railway hereditament as a whole something which ceases to be a railway hereditament. So far I am referring merely to the site in the station; when the premises have been erected on the various sites, each becomes a new and separate hereditament in respect of which the question has to be considered whether as such it is ever occupied by the Railway Company at all, or if occupied by the Company, is occupied for purposes of the undertaking. The question relevant here is whether the premises were "so let out as to be capable of separate assessment." The converse phrase is to be found in para. 21 of the 11th Schedule to the Local Government Act, 1929; " any part of a freight transport undertaking let out by the company to a tenant, but not so as to be capable of separate assessment."
It is clear that something which otherwise would be a railway hereditament may cease to be such if it is so let out as to be capable of separate assessment; these words require careful definition. They refer, I think, both to the character and the conditions of the letting and also to the purpose for which the premises are let: but there is also implicit a reference to rules of law which determine the position by their application to the actual circumstances. I think the rules of law which are implicit are not the rulings in any specific decided case or cases; the ,circumstances of the particular letting in each of the cases now in question may not be precisely parallel to any existing authorities, and, further, an appellate court may not accept the pronouncements in the earlier cases as truly representing the law. The language of the proviso is quite general, and I cannot find any justification for saying that it gives legislative sanction to any particular decision. In one aspect, the problem is new. But I do not think that the words mean that an entirely fresh departure is to be made in the principles of rating law, though it becomes necessary for the court to attempt a survey of the whole of the existing authorities in order to arrive at a consistent and comprehensive appreciation of the relevant law.
The question then is whether the premises in question have been so carved out of the railway hereditament, to which they or their sites belonged, as to be capable of a separate assessment, or whether they have, though let out, been so let out as still to leave them in the occupation of the Railway Company. I disregard for the moment the further question whether, even if they remained in the occupation of the Railway Company, they were occupied for purposes of the undertaking, as defined in the section.
I shall consider first the premises in Victoria Station, that is the bank and the various shops, offices and other premises, but I shall reserve W.H. Smith & Son's bookstalls for separate consideration.
All these premises would seem to be capable of separate occupation: Boots' chemist's shop or the bank, or any one of the kiosks constitutes a hereditament, which has been erected by the tenant, to use that term neutrally: when it is let out the occupation is in the tenant: he uses it for purposes of his trade; he possesses the key; when he shuts it after business hours he still occupies it for his goods; there his position is so far identical with that of any shopkeeper who has a lock up shop in an ordinary thoroughfare.
What is, nevertheless, contended by the Railway Company is that whatever be the tenant's position, he has at most enjoyment, and not rateable occupation: the rateable occupier is all the time the Railway Company, who, it is said, occupy the shop or other premises, just as they occupied the site as a part of the station before the premises were erected. This contention seems at the outset to confuse the station itself with the premises erected upon it. But the essence of the argument is that for rating purposes occupation must be distinguished from enjoyment, or to put it differently, that, if the tenants possess or enjoy or occupy the various shops, their occupation is only subsidiary to that of the Railway Company, who are said to have paramount occupation, in the same way as the landlord of a lodging has paramount occupation of the whole house, including the rooms let to the lodger. The position of a lodger for rating law has long been well established, but the same principle has been extended to cases where premises included in a larger whole have been let out to other persons, subject to such limitations of user and such control that these persons could not be regarded as having that sole and exclusive occupation which is the test of rateability in such cases. The premises were thus part of a larger hereditament "let out to a tenant but not so as to be capable of separate assessment."
In order to examine this contention it is necessary to refer to certain authorities. But some general propositions may first be stated. Two important principles have been clearly laid down by this House in Holywell Union v. Halkyn Drainage Co. In that case Lord Herschell LC very precisely states the general distinction:
" There are many cases where two persons may, without impropriety, be said to occupy the same land, and the question has sometimes arisen which of them is rateable. Where a person already in possession has given to another possession of a part of his premises, if that possession be not exclusive he does not cease to be liable to the rate, nor does the other become so. A familiar illustration of this occurs in the case of a landlord and his lodger. Both are, in a sense, in occupation, but the occupation of the landlord is paramount, that of the lodger subordinate."
But Lord Herschell in the same case further points out that the relation of tenant to the owner of the property is not necessary to constitute rateable occupation.
"Land," he says, " may be occupied for purposes of and in connection with the enjoyment of an easement in such a manner as to make the person so occupying liable to be rated."
Later he says:
"The question whether a person is an occupier or not within the rating law is a question of fact, and does not depend upon legal title."
The case of Cory v. Bristow is also instructive in regard to certain general principles. The rateable subject matter there consisted of permanent moorings fixed by Messrs. Cory on the bed of the Thames under the right, granted them by the Thames Conservators in virtue of their Parliamentary powers, to occupy them by their hulk or derrick. The decision is important as showing that a person no less occupies in the rating sense because he does so subject to regulations or bye laws or is liable to be turned out on short notice: thus Lord HATHERLEY says:
"But in the present case all the argument has turned upon this, that independently of the question whether or not this be a licence or in the nature of a demise, inasmuch as there are certain bye laws which may be made from time to time by the conservators, who have given this permission, and inasmuch as by the 91 st section of the Act the power of any person to have this beneficial occupation may be determined on a week's notice, therefore, there is not conferred on the Messrs. Cory the exclusive possession of these mooring chains which they have been permitted to place in the river as is described in the case. I apprehend, my Lords, that it would be a confusion of ideas to say that it interferes with the exclusive possession any more than a right of re entry on the part of a landlord in certain given events could be said to interfere in any way with the right of the tenant during the time he is holding. He is in beneficial occupation for a term, though that term is limited by certain contingencies which may possibly determine his interest at an earlier period."
And further Lord CAIRNS also refers to the fact that Messrs. Cory were to work to the satisfaction of the conservators under the inspection of the harbour master: he points out that Messrs. Cory were none the less in rateable occupation because they were required to obey the conservators' bye laws, and were to work to the satisfaction of the conservators and subject to definite limitations, and were liable to be ejected on notice.
It is also clear that a person may occupy part of a larger building, though he can only obtain access by permission of the general owner, if I may so call him. Thus in the Holywell Unionc ase, Lord Herschell expressly recognized this principle when he cited the case of Lancashire Telephone Co. v. Manchester Overseers, in which a telephone company were held liable to be rated in respect of their wires and poles where the wires were attached to the roofs or walls of houses by the permission of the occupier, who, nevertheless, retained complete control of the building, so that the company could only obtain access to the roof by his permission. LINDLEY LJ said:
" The distinction between an easement of support, and the occupation of that which affords support is often very fine. I think the telephone company occupy land in the same sense as many other persons who have been grantees of easements and have been held rateable."
These statements of general principle are very relevant in considering the main features relied on as negativing rateable occupation by the tenants in the present cases. The Railway Company, it is said, have reserved such control that their occupation is paramount, and indeed they were bound to do so in order to fulfil their statutory duty of working the railway: thus they control the access or egress to and from the shops by closing the station gates an night; they require the tenants to obey their bye laws and regulations, and they impose the various restrictions contained in the agreements which I have quoted above. But in my opinion, these matters are on the authorities I have cited, and in principle, not inconsistent with the fact of rateable occupation being in the tenants: any tenant may be subject to restrictive covenants of a stringent character, such as limitations against using the premises for noxious or unlawful purposes, or covenants requiring obedience to regulations, or restrictions on modes of access' or as to the mode of conducting the business. Obvious examples are the covenants in the case of a tied house, or restrictive covenants as to the businesses permitted. These restrictions do not in themselves save the tenant from being rateable, if he is an occupier in other respects.
I cannot find in the agreements in question any reason to hold that the tenants are not rateable. The Railway Company have no doubt quite properly imposed such restrictions as seemed necessary for the proper working of the station as a whole. They have reserved the right to close the station each night, and also a special right to close temporarily in cases of emergency: but these are merely restrictions on the tenants' user and enjoyment, and do not change their character or make the occupation other than a sole and exclusive occupation. The tenant is still in sole occupation of his premises, and has full use of them to carry on his business. As one indication of this I may refer to the terms of the agreements which give the Railway Company limited rights of entering for specific purposes, e.g.., to view the state of repair, and so forth. These terms indicate a possession in the tenant adverse to the landlord. On this point I may refer again to Lord Herschell in the Holywell Unioncase, where he says:
"If the company were to have an easement only, and were not to be in possession of the tunnels and works which they constructed, and the Duke was to remain in possession of them, it is difficult to understand why a covenant should be taken to 'permit and suffer the Duke to go down dial and measure the tunnels and shafts.' "
As to the closing of the station at night, this is done outside business hours and as MACKINNON J. shrewdly observes, is rather an advantage to the tenants, because it tends to obviate the risk of burglary to which lock up shops in public thoroughfares are peculiarly exposed. It is obvious that the tenants' occupation is continuous, because at night he occupies by his goods. The tenant is the person entitled to exclude trespassers, e.g.., from the bank or Boots' shop, or to bring ejectment.
A great many authorities have been cited in support of the argument that the tenants' possession of the premises under review is only subordinate and, as it was said, analogous to that of a lodger. It is true that the lodger has never been held rateable: that was decided as long ago as 1784. 1 do not intend to examine the cases in detail, especially as the position of the lodger is authoritatively explained by Lord HATHERLEY in Cory v. Bristow. " Although," he says, "a lodger " may have
" the exclusive use of the chambers he occupies, still there is a concurrent right reserved by ... the person who lets the lodgings, of using the ... lodging house for whatever purposes he may think fit for managing the establishment and all purposes connected with it."
In other words the landlord occupies his premises and uses them for his business of keeping lodgers. Such a case is far removed from the case of the tenants here, who occupy their shops in order to carry on their business. Smith v. St. Michael, Cambridge Overseers, was merely an application of the lodger principle to a case where the landlord, who occupied a house and lived in part of it, let certain rooms to Inland Revenue officials, who used them for their business, but the landlord was held to have had his own servants to look after the house and furniture, and to have retained the occupation, though he had agreed to give the exclusive enjoyment of the occupation to the lodger. Such was the explanation of Smith v. St. Michael, Cambridge given by BLACKBURN J., who was a party to that decision, in Allan v. Liverpool.
I must however refer to two cases much stressed in argument on behalf of the Railway Company. One is London and North Western Rail. Co. v. Buckmaster. The premises in that case consisted of "a stable for the accommodation of four horses" at the Clapham Station, situate within the fence of the company's premises, though it appears that the gates were not closed. In the Queen's Bench, BLACKBURN, QUAIN and ARCHIBALD JJ. (QUAIN J. With great hesitation) held that the agreement should be construed as a licence and not a demise of the premises for the time being. QUAIN J. was of opinion that all that the agreement involved was the providing of stable accommodation for four horses. BLACKBURN J. thought that the stable might be held to remain part of the station premises and under the control of the company, so that the railway company were the proper occupiers. Emphasis was placed by him on the provision that the tenants were to be subject to the company's bye laws. In the Exchequer Chamber, the judges were equally divided, and the decision of the Court of King's Bench stood. AMPHLETT B. (delivering the judgement of himself, Lord COLERIDGE CJ and POLLOCK B.) agreed with the Court of Queen's Bench: they thought it highly improbable that the railway company had intended to grant a demise with no provision against alienation, and no power of re entry: they also thought that all that was given was accommodation for four horses in some stable.
I understand these judgements as based on the view taken by the judges of the particular agreement in the light of the particular circumstances. CLEASBY B. delivered the judgement of himself and GROVE and DENMAN JJ. to the opposite effect. I find their reasoning more convincing: they held that the effect of the agreement was to hand over to the tenant the possession and occupation of the stable, the stable being regarded as a separate tenement: there was rent payable; property tax was to be deducted; possession was to be given up at a month's notice; the terms as to bye laws, they held, did not give the railway company a right to interfere with the occupation and possession of the stable. In brief they held that on the agreement as a whole, an independent possession was given to the tenant, who was accordingly rateable. Having carefully considered this case, I am of opinion that the judgement delivered by CLEASBY was correct. But in any case I think the other judgements proceed on a view that the effect of the agreement Was to reserve control over the stable, if a stable was in question, combined with a view that not a stable, but a stabling, was the subject of agreement. Though the case has been cited with approval, it is in my view most unsatisfactory as an authority, and, as I have said, I think it was wrongly decided. As appears below, it has not passed without question.
Rochdale Canal Co. v. Brewster was a case which was similar to and followed Allan v. Liverpool. It had reference to a berth at one of the Liverpool Docks. The berth was under the agreement set apart and appropriated to the use of the plaintiffs, at a rent free from deductions save landlord's property tax, the plaintiffs agreeing to pay all rates and taxes: the plaintiffs were to keep the premises in repair: they were to allow the servants and officers of the Dock Board free access to all parts of the premises and to conform to bye laws: the quay space was not fenced in from the street: the Dock Board reserved a right of re entry in certain events. The Court of Appeal held that the plaintiffs were not rateable: LINDLEY LJ thought the agreement pointed to a letting of land and not merely to the creation and enjoyment of a mere easement or license to use. But he held on the authority of Allan v. Liverpool, and London and North Western Rail. Co. v. Buckmaster, that there was an occupation of land which was at all times subject to the control of the owner and thus was not such an occupation as to render the occupier liable: the occupation was held to be analogous to that of a lodger. This case, with Buckmaster's case and certain earlier cases were much relied upon by Sir FRANCIS TAYLOR in his careful judgement in the Railway and Canal Commission; but in my opinion it, like so many of the earlier cases, can only be justified, if at all, as based upon the special view taken by the Court of the particular circumstances of the case.
As Lord Herschell said rateable occupation is a question of fact, by which is meant that it must be ascertained by considering all the circumstances of the case. It may be that in Brewster's case the circumstances were such (perhaps because of the peculiar position of the Dock Board and its special duties) as to involve a constant and general control over the berth in question so as to prevent the tenant being rated separately. If that is so, the position is different from the position, as I understand it, of the premises in question in Victoria Station. Indeed Brewster's case, was distinguished in a case which appeared to present many similar features: that was Young & Co. v. Liverpool Assessment Committee where there was a lease of a vault and quay space in a Liverpool Dock for purposes of a bonded warehouse. The premises were wholly within the dock walls and access could only be obtained by passing through gates in the absolute control of the Board: the lessees had the keys of the premises: they had to leave for the use of the Dock Board free access to certain machinery belonging to the Board in the docks: the lessees were to be subject to the bye laws and to certain restrictions: they agreed that the user of the premises should be so worked by the company as not to cause interference with the general working of the dock and that the servants of the Board should at all reasonable times have free access for the purpose of such general working.
A Divisional Court (Lord Alverstone CJ, HAMILTON and AVORY JJ held that the lessees were in rateable occupation. HAMILTON J. relied in part on the use of the word " demise," though he pointed out that the use of a term of art cannot alter the truth; he held that the various covenants on the part of the lessee, though some were special, did not turn the position into that of a mere licensee. Indeed he thought the covenants giving the lessors control as to particular matters pointed to there being no general right of control reserved in the lessor. The court clearly attached no special importance to the fact that access to the premises was by gates controlled by the lessors. In Brewster's case, there was no such control of access. This in itself supports what I think is otherwise clear, that control of access by a landlord is not decisive against a tenant being in rateable occupation.
As I understand the circumstances of Young's case, I think it was decided on right principles. But Smith v. Lambeth Assessment Committee was in my opinion wrongly decided and was based on an erroneous view of the relevant circumstances and of the law. I must consider that case separately when I deal, as I now do, with the bookstalls.
On the description of the facts and the agreement in reference to W. H. Smith & Son's bookstalls which I have given earlier in this opinion, I think that on principle they are so let out as to be capable of separate assessment and ought to be excluded from the roll as not being railway hereditaments. They are premises of considerable size, occupying definite areas which they have occupied for a long time without being moved. It is true that the Railway Company reserve power to change the sites, but the evidence is that they do not ever, or only at very rare intervals, exercise that power; while the stalls remain in a particular site, the site is occupied by W. H. Smith & Son. In Electric Telegraph Co. v. Salford Overseers, where the subject of assessment consisted of telegraph posts of which the landowners could direct removal at will, it was held that there was exclusive occupation of the soil by the posts so long as they were not required to be moved. There was sufficient permanence to constitute rateability. That principle applies in my opinion to the bookstalls.
They and the sites on which they stand are in fact beneficially occupied, like any of the other shops or premises in the station: it would be unfair that they should escape being rated while the other premises are rated. But it is said that the terms of the agreement are such as to involve nothing more than a mere permissive licence, because a pervading control is exercised at all times over W. H. Smith & Son and their servants. I cannot accept this view. I have referred to Cory v. Bristow, in which this House held that obedience to bye laws and subjection to control in the conduct of the business carried on, were not inconsistent with occupation. Regulation of right of access is not here material. The various terms undertaken by W. H. Smith & Son such as their agreement not to interfere with the business or traffic of the Railway Company and not to sell or exhibit publications which are detrimental to the Company's interests, are only of the same character as the restrictive covenants which have so often been referred to already in this opinion. There is a covenant to repair the bookstalls; the Railway Company are given power of distress; though there is the usual clause that the agreement is to operate as a licence only and not as a demise or lease or tenancy, such a clause cannot change the true nature of the agreement, In any event the question is whether there is de facto occupation; I think there is, though in terms only a licence and liberty are given.
I cannot regard the bookstalls as other than independent hereditaments, capable of independent occupation, and in fact occupied by W. H. Smith & Son and no one else; I cannot see how the Railway Company can be said to be in occupation of the bookstalls, or how they can be regarded as bearing to W. H. Smith & Son the same relation as a landlord bears to his lodger. Such a view seems to me to involve a confusion between the station area which is not let and the specific hereditament which is let. Nor can the question be decided by considering that before the Railway Company let the bookstall site they were in complete occupation of the whole area including that site, and remain in occupation still of the surrounding area: the theory of the lodger does not depend on the fact that the landlord still lives in the house, but on the fact that he still retains control for purposes of his business of the whole house: here, I think, the Railway Company does not retain such control over the bookstalls but lets out the bookstalls to W. H. Smith & Son for purposes of their separate business.
But this opinion is contrary to the decision of the Court of Appeal in Smith v. Lambeth Assessment Committee given in 1882, by a court composed of BAGGALLAY, BRETT and LINDLEY L.JJ. The judgement of BRETT LJ is quite short and may be quoted in full.
"In this case the question is whether the indenture dated the 25th of April, 1872, amounts to a demise of part of Waterloo Station or is merely a licence to sell books and newspapers with leave to display and keep the same on different parts of the station. Parts of the indenture look like a demise, others are wholly inconsistent with an intention to create an interest of that kind. In order to ascertain the true meaning the whole instrument must be looked at; parts of it must not be taken separately, the question arises upon the whole, The grantees are called the ' tenants '; but they can go into the station only at reasonable, that is particular, times and for limited purposes; the rent is to be paid for the whole of the licence or privilege granted; the bookstalls and cupboards have been erected with the approval of the Company's engineer and are moveable at pleasure, for it is for the Company to direct where they are to be placed. It is clear upon these facts that there has been no demise, the indenture creates only a licence or privilege with certain auxiliary rights. In this view Smith & Son have no rateable occupation; the only manner in which the bookstalls can be rated is that the Railway Company must be assessed at an enhanced value. It is not necessary to refer at length to the cases which have been cited. I need only say that I reserve until a proper occasion my opinion whether London and North Western Rail. Co. v. Buckmaster was correctly decided."
The other judgements are in substance the same. It is obvious that what is considered here by the court is merely the language of the agreement; yet it is clearly established, as I need not repeat, that what is material is not necessarily the terms of the grant, but the de facto occupation which may be greater or less than the terms convey. The question is not concluded by saying it is an easement, not a demise. The limitations which BRETT LJ treats as decisive are merely restrictive covenants. The fact that a single rent is paid both for the occupation and use of the bookstalls and for the sole and general privilege of selling books and so forth in the station cannot affect the nature of the use and occupation. LINDLEY LJ distinguishes Cory v. Bristowsimply by saying that in that case there was, and in the case before him there was not, exclusive occupation; that is merely to state, not to justify, the distinction. This case cannot be regarded as an authority which can help in the decision of other cases where the circumstances differ, and on that ground I have disregarded it while dealing with the other premises at Victoria Station. But for reasons which I have sufficiently explained, I think it was wrongly decided and is inconsistent with the authorities both before and since its date. It has since been followed twice in Scotland and once in Ireland in cases relating to bookstalls, but I do not find that it has been relied on as embodying any principle. It was explained by LINDLEY LJ in Lancashire Telephone Co. v. Manchester Overseers in 1884 in a passage which at first sight is puzzling: he says
"I do not feel pressed, I confess, with the case of Smith v. Lambeth Assessment Committee, because there it was attempted to rate two people for the same things. There the Railway Company were rated for the land for which it was also sought to rate Smith, but here nobody is rated for this occupation. I cannot find any distinction in principle between the present case andElectric Telegraph Co. v. Salford Overseers, and Cory v. Bristow."
The two cases which LINDLEY LJ cites would seem to lead to the conclusion exactly opposite to that which was reached in Smith v. Lambeth Assessment Committee ,but it seems that an attempt was in fact being made to rate two persons for the same premises, because the Railway Company were already paying rates on the bookstalls, their value being included in the general rate for the station charged upon the Company. This may explain why the court decided as it did, but is not in logic a sufficient ground for the decision. Nor can it apply now when the question is whether the bookstalls are railway hereditaments; if they are not, W. H. Smith & Son will be rated, but the Railway Company will not.
It has been strenuously argued that the authority of Smith v. Lambeth Assessment Committee has stood so long that it should not now be overruled and reliance has been placed on expressions of opinion in this House in certain cases that a decision of old standing should not be departed from. But there is no rule which debars your Lordships from doing justice even at the cost of reversing an old authority, that is an authority of a court inferior to this House. It is true that in London County Council. v. Erith and West Ham A.C, etc. Lord Herschell said that he deemed
"it inexpedient to interfere in such a matter as this with a long course of practice supported by decisions which are not of very recent date. Therefore, even if it be not possible to rest upon grounds altogether satisfactory the exemption of these sewers, yet the case being, as I have said, a very particular one, I could not advise your Lordships to depart from a practice which has prevailed for a very long period, and which has been sanctioned by judicial authority."
He was dealing with the rating of sewers, but in West Kent Main Sewerage Board v. Dartford Union Assessment Committee this House did depart from the old rule in regard to the rateability of underground sewers. Lord ATKINSON put the question
"whether this House ought still to be deterred, despite the difficulties which have arisen in rating operations, from sweeping away this anomalous exemption, and putting the law in respect to the rating of sewers on the sound and rational basis upon which the law has by recent authorities been put in respect of other rateable subjects of property, simply because it might place unforeseen burdens on sewer authorities, or render more onerous the engagements into which they have heretofore entered in the belief that the anomaly would continue."
The question and the answer are peculiarly pertinent in this case. He answered it in the negative. In West Ham Union v. Edmonton Union Lord LOREBURN admirably stated the general principle:
Great importance is to be attached to old authorities, on the strength of which many transactions may have been adjusted and rights determined. But where they are plainly wrong, and especially where the subsequent course of judicial decisions has disclosed weakness in the reasoning on which they were based, and practical injustice in the consequences that must flow from them, I consider it is the duty of this House to overrule them, if it has not lost the right to do so by itself expressly affirming them."
There are many reasons why, if Smith v. Lambeth Assessment Committee was, as I think, wrongly decided, this House should in the present case not give effect to that judgement. I have referred to the peculiar circumstances which may have influenced that decision, that "is, to the attempt to rate twice over. Nothing of the sort applies now. What we are concerned with is a new statutory duty imposed on a new statutory body, the Railway Assessment Authority; its duty is to distinguish railway hereditaments from others, according to the test whether the others are so let out as to be capable of separate assessment. The Act has not stereotyped any particular decision. It would be unjust, therefore impossible in my opinion to apply one principle to W. H. & Son's bookstalls and a different principle to all the other non railway hereditaments.
The Assessment Authority must act on uniform principles in preparing the roll, unless there is some absolute law to the contrary. I think there is not. W. H. Smith & Son cannot claim a sort of privilegium. It is said that it is hard for them to have to pay rates when they entered into a contract for twenty one years on the basis of an exemption which they had enjoyed since 1882 or earlier. But when they made that contract in September, 1929, nine months before the Act was passed, it was clearly known that railway rating was to be put on a new basis. The Act commonly known as the Derating Act' had shown that transport undertakings were on a different footing from retail shops, the former enjoying, while the latter did not enjoy, special privileges. The position was completely different from that in 1882, and indeed, at that date there was no special reason why the Rating Authority should seek to get rid of the decision: they got their rates from the railway, if they did not get them from W. H. Smith & Son, and they could not get them twice over. In all the circumstances of the case I think this House is entitled, and indeed bound, to refuse to affirm the peculiar anomaly which would exist if W. H. Smith & Son's bookstalls were treated differently from the other shops and offices at Victoria.
I have still to mention the show cases about which a special question arises, by reason of the Advertising Stations (Rating) Act, 1889. This Act by s. 3 provides that where land is temporarily or permanently used for the exhibition of advertisements, or for the erection of any hoarding, post, wall or structure used for the exhibition of advertisements, but not otherwise occupied, the owner shall be deemed to be in beneficial occupation of the land and shall be rateable on it. I think that these show cases are occupied by their owners, by means of the goods which they exhibit: so far I see no distinction in principle from the other premises which I have discussed. But the question remains whether they fall within the last mentioned Act. I do not think they do. The Act, I think, is dealing with what in ordinary parlance would be called advertisements, such as posters, hoardings, and so forth. What are exhibited in the show cases are goods, not advertisements. It is true that the goods are not exhibited for purposes of being sold, at least on the spot, though no doubt they might be purchased by arrangement made at the shop. The show cases in truth might fairly be regarded as shop windows, though placed at a distance from the actual shop. I do not think they fall within the Act of 1889.
As, in my judgement, the Railway Company are not in occupation of the premises in question, it is not necessary to determine whether, if they had been in occupation, the premises could have been properly held to be railway hereditaments within the Act.
I have still to deal with the premises at Beckenham junction. I have described what they are and referred to the relevant agreements. They are specific and delineated sites and capable of separate occupation just as much as the shops at Victoria. The limitation of access is in principle the same. The restrictions on the rights of user, in particular, the condition that they are not to be used for the storage of goods other than goods which have been conveyed or are about to be conveyed by the Company's railway, are not different in principle from the various restrictive covenants which I have discussed. The agreements are in the main similar in form to those which have been summarized in connection with Victoria Station. They expressly contemplate the possibility of the premises being separately assessed, or of being included in the general assessment of the railway.
I should not have thought that the agreements were in a form which called for any separate discussion after what I have said of the agreements relating to Victoria Station, were it not for clause 3 which I have quoted above.' If that clause could be read literally at its face value and without qualification, I should be of opinion that it was not consistent with the tenant having an independent occupation, that is, if it were construed as entitling the Company by its servants to go in and upon the premises at all times for all purposes. These latter words read literally would give the Company power to fill the premises with the Company's goods and would negative exclusive occupation on the part of the tenants. But so read, the clause would be inconsistent with the whole tenor of the agreement. The agreement must be read as a whole, and clause 3 must be construed so as hot altogether to destroy the grant. I think the rights which the clause givesare not wider than those to be found in the clause I have quoted from Young & Co. v. Liverpool Assessment Committee. Apart from clause 31 construe the agreement as giving an independent occupation, and I construe clause 3 as giving right of access not inconsistent with exclusive occupation as that term is understood in rating law.
I think the appeals should succeed.
Kingston upon Thames LBC v Marlow 1995 Landlord held liable where following a dispute with his tenant the tenant accepted forfeiture of the lease and vacated the premises
Marshall v Camden LBC 1980 Trustee can be an owner for UPR so long as no lease has been granted or possession has otherwise been disposed of
Brent London Borough Council v Ladbroke Rentals Ltd. (1980) the Court of Appeal held that where a hereditament which had been unoccupied for more than three months was divided, without structural alterations, into two or more hereditaments, unoccupied property rates were payable on the two or more hereditaments without there arising any further entitlement to free periods of three months
Hailbury Investments Ltd. v Westminster City Council (1986) The imposition of planning restrictions is not action taken by a public authority with a view to prohibiting occupation of the premises
Tower Hamlets London Borough Council v St. Katherine by the Tower (1982) The UPR exemption applied, in this case, because the subject hereditament did not have a satisfactory means of escape in the event of fire, as was required in accordance with the London Building Acts (Amendment) Act 1939.
Regent Lion Properties Ltd. v Westminster City Council [1990), the Court of Appeal held a hereditament to be exempt for a period during which remedial works were being carried out to remove the danger arising from the presence of asbestos in the building
Debenhams plc v Westminster City Council. (1986), the House of Lords rejected the contention that a hereditament comprising two separate buildings linked only by a tunnel and a footbridge was exempt when only one of the buildings was included in a list compiled under s.54 of the 1971 Act. Lord Keith of Kinkel said that he could not construe the separate building which was not included in the list as being a 'structure fixed to' the building that was listed.
Richardson Developments Ltd. v Birmingham City Council (1999), the High Court considered the situation of an 18th century building which was listed in 1982 with the specific exclusion from the listing of two wings added in the 19305. These wings were subsequently demolished in the 1990s and new buildings were then constructed within the curtilage of the original listed building. The appellant company contended that the whole hereditament, as it then stood- qualified for exemption. Dyson J found against the company. He said that he was not prepared to accept the view that later extensions to listed buildings automatically attracted listing, and he concluded that the only criterion for determining whether an addition to a listed building should be treated as being part of it was that the addition should be fixed and ancillary to the original. The hereditament comprising the 18th century building and the 20th century additions was held to not be exempt.
Barnet London Borough Council v London Transport Property (1995) that an unoccupied bus garage had been used for storage and was therefore exempt from the charge. The High Court rejected this submission on the basis that 'storage' did not include the parking of buses overnight as a normal aspect of running a bus service.
Southwark London Borough Council v Bellway Homes and the Post Office (2000), the High Court held that a disused Post Office sorting and distribution office, acquired by a company for the eventual redevelopment of the site, was a 'qualifying industrial hereditament' and was accordingly exempt from the liability arising from unoccupied property. Blofeld J found, in the context of regulation 2 (5)
in the course of their distribution".
Income Tax Special Commissioners v Pemsell 1891 Charity consists of 4 principal divisions
R v Liverpool CC ex parte Windsor Securities Ltd 1978 Cumming- Bruce LJ Authorities should use a 'common sense ' approach Hardship is different to poverty~ a firm running into difficulties and vacating property would incur a loss in respect of UPR. A property Co having vacant property would incur the same loss One may be considered more likely for relief than the other.
R v Liverpool CC ex parte Caplin 1984 Owners had purchased property Borrowed Money Property not producing income No relief given 'should have been aware that they would be liable until tenants found'
Wakefield MDC v Huzimor Inv. Dev Ltd 1989 Difficulty in letting properties was not hardship
Kennett DC v BT 1983 House of Lords decision. Telephone exchange with wiring in but not connected held to be in occupation. The case subsequently gave rise to the Property Not In Active Use provisions
Assoc. Cinema Prop Ltd v Hampstead BC 1944
References : [1944] 1 K.B. 412; [1944] 37 R & I.T. 3
Court of Appeal
The Lord CHIEF JUSTICE This case raises questions which are difficult, and the number of authorities which have been cited to us is enough, were it not for what has already been said by the House of Lords, to show that it is not easy to disentangle the cases and to arrive at a reconciliation of the decisions, or of the reasons which were given for the decisions.
In these circumstances I should have, perhaps, thought it right to take an opportunity of considering the form of my judgement; but as I have no doubt at all about the result, I think it right to give judgement now, speaking for myself.
I have referred to what was said in the House of Lords as to the difficulty of reconciling the different cases; and the passage I had in mind is in the opinion of Lord Atkinson in Liverpool Corporation v. Chorley Union A.C [1913] A.C. 197, at p. 210:
"But the authorities mainly relied upon by the appellants are those conversant with the non rateability of vacant houses. I find great difficulty in reconciling these, one with the other, from the statement of the law by Lush, J., in R. v. St. Pancras Assessment Committee (1876) 2 QB 581. down to the decisions in R. v. Melladew and Borwick v. Southwark Corporation; and I find still greater difficulty in discovering any intelligible principle upon which the decisions are founded, or any principle applicable equally to vacant houses and to property like that sought to be rated in the present case."
That leads me to say that I am of opinion that it would be useless to go through all the cases here and find a straight line upon which to frame my judgement. Therefore, I propose to consider first of all what the question is which we have to consider, and then to approach that question in the light of the facts of this particular case. In the case to which I have already referred, of Liverpool Corporation v. Chorley Union A.C, Lord Atkinson refers to Winstanley's case on p. 208, and says it was based upon the judgements of Buller, J., and Lord Hershell, and "had reference solely to the first of the three questions set forth at p. 12 of that report, into which it was stated the question for decision resolved itself. These questions were (1) (the bald question): Does the appellant occupy this cemetery for which he is rated ? (2) If he does, is his occupation a thing of value ? (3) What is the measure of that value ? " Very much the same way of looking at the question was adopted in Townley Mill Co. v. Oldham A.C. [1937] A.C. 419, at p. 436 [7 DRA., 122 (HL)], where Lord Maugham says: " There is no doubt that in order to prove rateable occupation, it was necessary to establish not only occupation, but that the occupation was a thing of value."
It appears, therefore, that the question we have to consider is whether there is a rateable occupation. Something has been said also about beneficial occupation, and I will have something to say on that point later on ; but it seems to me to be one of the less important questions in this case, for the reason that it is not disputed that if there is in fact occupation here. the occupation is beneficial occupation.
Although it is difficult to find in the enactments, either in the Statute of Elizabeth or anywhere else, a definition of "rateable occupation," the judgement of Lush, J., in R. v. St. Pancras Assessment Committee (1876) 2 QB 581, has so often been cited (and cited with approval in the House of Lords) that I may refer to it once more. Lush, J., in his judgement, which was a considered judgement, said this on p. 588 :
" It is not easy to give an accurate and exhaustive definition of the word I occupier. Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a vacant house is in possession, and may maintain trespass against anyone who invades it, but as long as he leaves it vacant he is not rateable for it as an occupier. If, however, he furnishes it, and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may not reside in it one day in a year."
It is right to say, I think, that occupation is a question of fact. That was made plain in the case of Holywell Union v. Halkyn Drainage Co [1895] A.C. 117, at p. 125, where Lord Herschell said:
"The question whether a person is an occupier or not within the rating law is a question of fact, and does not depend upon legal title."
Several of the cases show (and I will only refer to one of them for this purpose) the decisive nature of the facts when they have been found. The illustration which I take (and I might take others) is the case of Smith v. New Forest Union A.C., 61 LT. 870, where in a very brief judgement the Court of Appeal held that there was no evidence of occupation. Lord Esher said:
"The possessor of this land was both legal owner and in legal possession, but he was not in actual possession. He never intended to do anything with the land, but let it for building purposes. He put up a board, but he was never in such occupation as to be rateable under the Statute of Elizabeth."
Lindley, LJ, said:
" I agree. There was here no use or enjoyment or occupation."
Lopes, LJ, said:
"To constitute occupation under the Statute of Elizabeth, there must be use and enjoyment of the property capable of being beneficial. There is no evidence of any such here, and I agree with the Divisional Court." The decisive facts there were that the person who was sought to be rated had " never enclosed, cultivated, used or let the land."
In those circumstances, it is not surprising, I think, that the Court of Appeal found no difficulty in arriving at the decision that there was no rateable occupation.
I contrast that case with the case of Borwick v. Southwark Corporation [1890] 1 K.B. 78. The facts have been so often referred to and stated in the argument before us to day, that I need not repeat them. Suffice it to say that certain chattels used in connection with the business of the appellants were removed from a house, but wooden benches and shafting had been installed and fixed there. Lord Alverstone, LCJ., said, on p. 82:
" There is no doubt that the appellants can make use of this property if they choose, and will do so if and when they require it. I think they are making use of it by having the necessary shafting and benches upon the premises in readiness for use."
Then he says this on p. 83, after discussing whether they had become fixtures, although they were part of the subject matter:
" I cannot think, therefore, that there is no evidence of occupation."
He arrived at the decision that there was occupation because of the facts which consisted of the introduction of the shafting and benches which were fixed in partial readiness for the resumption of the business or other activities which it was to carry on in the building.
I refer to the facts in this case under consideration to show what the position was. I find it unnecessary to read the whole of them, but finding (d) in para. 5 says this: "The appellants had not entered into physical possession of the said premises and the landlords had taken any steps necessary for the maintenance, repair and preservation thereof." Finding (f) is "The object of the appellants in becoming tenants of the said premises was to have accommodation available for offices in the event of their present offices being rendered unfit for use by enemy action or should they desire to use the said premises owing to the exigencies of their business. "Finding (g) is : "The appellants had never used the said premises for any purpose." Those facts are so manifestly different from those which Lord Alverstone stated in Borwick v. Southwark Corporation that the difference seems to me very significant. In this case, according to the findings : "The appellants had never used the said premises for any purpose." Nothing could be more clear or more precise than that statement. It is true it follows a statement that " the object of the appellants in becoming tenants of the premises was to have accommodation available " in certain events. That was relied upon by counsel for the respondents here as proving an intention to occupy the premises which, it was said, was enough to constitute rateable occupation. I shall have something to say about intention later. Upon those findings the magistrates have said this. After setting out some preliminary matters, which are really not in question here, they say, in para. 9: " We have also heard the witnesses and we are satisfied that the defendants acquired these premises for use as offices in connection with their business ; that the premises were and are capable of being so used, and that the defendants had and still have an intention so to use them whenever, according to the exigencies of their business, it was or is desirable. On the authorities, R. v. Melladew and Borwick v. Southwark Corporation, we are of opinion that the defendants must be held to be the occupiers, and to be enjoying the benefit of premises kept in reserve for them for use in their business in case of emergency and, therefore, rateable." If those two cases did require the justices, as a matter of law upon the facts they found, to come to that decision, the respondents in this appeal by way of case stated will succeed. Therefore, it is necessary to look at those two cases to which the justices have referred.
The first of them Borwick v. Southwark Corporation, supra, to which I have already referred, and I repeat my reference to the Lord Chief Justice's judgement, in which he said quite clearly that the persons there sought to be charged were making use of the premises; and he gave reasons for that statement, namely, by having the necessary shafting installed. Mr. Justice Bigham says on p. 84 of that report:
"It is, I think, obvious from these circumstances that the place is kept by the appellants as a 'stand by' for use at any moment when the exigencies of their business may make it desirable to so use it, and is in readiness for such use. Such a state of things constitutes, in my opinion, a permanent user so as to create an 'occupation.' Then: " Whether a man 'occupies' or not is in each case a question of intention, to be ascertained with reference to the particular circumstances."
So I find nothing so far, in the first of the two cases upon which the justices have relied as leading them to their decision, to support the view that as a matter of law they should so find.
The other case on which the justices rely is R. v. Melladew. The judgement of the Master of the Rolls, Lord Collins, in that case requires a little more attention. He says at p. 200 :
"It is important to remember, in dealing with the questions of liability to pay rates, that occupation, which is the basis of liability, necessarily varies with the nature of the rateable subject matter. The acts necessary to establish occupancy of a dwelling house may be very different from those which might be required to establish occupation of a non habitable hereditament. It is, I think, clear from a comparison of many authorities that the intention of the alleged occupier in respect to the hereditament is a governing factor in determining the question whether rateable occupancy has been established."
Stopping there for the moment, no doubt Mr. Turner on behalf of the respondents is entitled to rely upon that as a cogent authority in favour of his submission that the all important question is whether there is an intention or not to occupy the premises. Melladew's case was a case in which the business of a warehouseman had been carried on; but there were no goods in the warehouse at the material times and it was closed. Certain steps had been taken to indicate that the business would not be carried on there, such as cutting off the water and the removal of weights and scales and trucks; but notwithstanding that, it was held that there was no cessation of the occupation of the warehouse by the warehouseman. Looking at it from that angle alone, the Master of the Rolls' statement that the intention of the alleged occupier in respect of the hereditament "is a governing factor in determining the question whether rateable occupancy has been established" is, if I may say so with the greatest respect, perfectly accurate at least I respectfully adopt it and very much in point upon the facts of that particular case. He goes on: "For instance, the physical presence, actual or constructive, of the alleged occupant upon the hereditament may be consistent with the position of licensee or lodger as well as with that of an occupier in the sense required to establish rateability. 'In order to ascertain this,' says Blackburn, J., in Allan v. Overseers Of Liverpool, 'we must see what was the intention of the parties.' " I forbear to read the whole of the judgement, because I think the passages to which I have referred show my understanding of these two authorities. But on p. 202 the Master of the Rolls says this, in the middle of the page:
"I am aware that ownership is distinct from occupation, and that an owner does not make himself rateable by trying to let an house which he has ceased to inhabit. But the principle involved in that proposition does not apply to the case of the tenant of a vacant warehouse who retains control over it for the purpose of letting storage room."
He says two or three lines later on:
" The warehouseman in getting a customer supplies visible evidence of his own occupation. In the case of the owner who tries to let, the intention is not to occupy. in the case of the warehouseman it is exactly the reverse. It seems to me on the facts found by the justices, which I need not repeat, that the intention of the defendant here was as far as possible to avoid the semblance of occupation while carefully guarding the substance. He carefully retained "I emphasise that word" the control, while his continuous intention was to utilise the premises for the purpose of his business whenever the opportunity offered."
Farwell, LJ, adds something to that, when at the bottom of p. 203 he says:
"The test, in a case like the present, of business premises, appears to me to be, has the person to be rated such use of the tenement as the nature of the tenement and of the business connected with it renders it reasonable to infer was fairly within his contemplation in taking or retaining it ? "
Then at the bottom of the page, in expressing his conclusion, he says:
" Under these circumstances, I find it impossible to say that the defendant has ever given up the use of this warehouse or withdrawn it from his business so as to cease to occupy it within the meaning of the Act. He has merely kept it as spare room."
Applying that last passage from the judgement of Farwell, LJ, which I think is quite consistent and in agreement with what the Master of the Rolls says, that the intention on the part of a person who has been in occupation of a warehouse to give up the occupation may be very material and is very material, supposing the facts agree with his intention ; it is not an authority simpliciter for the proposition if a person acquires possession (becomes legal owner in the sense in which Mr. Turner uses the word) of a house and has an intention, which he may or may not communicate to anybody, that some future time he will occupy, that that is tantamount to rateable occupation. R. v. Melladew does not, in my judgement, support any such proposition.
The importance of intention may be illustrated by what I may call the seaside cases, of which there are two or three examples which have been cited to us. One of them is Gage v. Wren, 87 LT. 271. At the top of p. 274 Lord Alverstone, LCJ., says :
"I quite agree that if those things " that is fixtures, blinds, meters, floor cloths, etc." were left in the house, and if the evidence before the magistrates was that they were only left with a view of finding a purchaser, or an incoming tenant, the inference of law to be drawn from that would not be that there was any evidence of occupation. But the case goes on to say that the respondent left all the fixtures and fittings she had hired from the previous tenant, and I will assume that they were things which might all have been taken by an incoming tenant,"
and so on. Then he says:
" I think that the proper inference of law to be drawn from the facts is that the respondent had the beneficial occupation of this house during the whole time. She intended to come back to the house, and she might come back, and she made no attempt whatever to dispose of it, nor is there any evidence at all that she meant to go out of the beneficial occupation of the house during the year."
As I understand the case, it is an illustration of the application of the significance of intention. When a person has been in occupation, an intention to go out, coupled with facts which support the intention, may establish a state of things in which there is no rateable occupation, because there is no use being made of the premises.
That is really sufficient for the purposes of my judgement. (I find here and I repeat the finding of the magistrates) that no use whatever was made of these premises. All that they did was to pay £1,500 on the conditions which are set out in the case, so as to have a standby office, of which they made no use whatever, either by taking any furniture in or by any other means, for use in case the exigencies of their business required it.
As I have said already, I find nothing in the case of R. v. Melladew, nor the case of Borwick v. Southwark Corporationto support the view that the justices were bound to find, on the authority of those two cases, that there was rateable occupation.
Looking at the case as one which raises a question of fact in the first instance, on the first question whether there is occupation here, I am of opinion that the magistrates came to a wrong conclusion, and there was no rateable occupation simply because I find no other factor at all except the acquisition of possession and the intention to go there at some future time, which as I have said, I think is not decisive of the question of rateable occupation.
Charles, J.: I agree. Save for the fact that this is a matter of considerable importance at this present time, I should not feel disposed to add to the judgement of my lord, with which I entirely agree. But I wish in the circumstances to add a few words, though not a great deal.
It is to be observed that the whole matter arises, to begin with, upon an agreement which was entered into because and in consequence of the possibility of damage arising from enemy action. That agreement, therefore, is couched in somewhat unusual terms. The appellants, the Associated Cinema Properties Limited, covenanted "to keep the said premises in good and tenantable repair, order and condition provided that the appellants should not be under any liability for the maintenance, repair or preservation of the said premises unless and until the appellants should enter into possession of the same, and in the meantime the landlords were to be at liberty to take such steps as they should consider necessary for such maintenance, repair or preservation." Then: "The appellants had not entered into physical possession of the said premises and the landlords had taken any steps necessary for the maintenance, repair and preservation thereof." Then para. (f) says: "The object of the appellants in becoming tenants of the said premises was to have accommodation available for offices in the event of their present offices being rendered unfit for use by enemy action, or should they desire to use the said premises owing to the exigencies of their business." That latter part, one would rather gather, is a sort of addition, because at this particular time the taking of these offices was in case their present offices might be rendered unfit for use by them by enemy action. Then it is found : "The appellants had never used the said premises for any purpose."
It has been said by Mr. Turner that if you, in those circumstances, take a lease of a house and leave it a shell and put nothing into it and do nothing to it, you are still in beneficial occupation so as to bring you within the ambit of rating.
Why are you in beneficial occupation because you have the right, if you like to exercise it at some future time, of going into that empty house ? A very long chain of cases has been cited to us from the time of Lord Blackburn down to 1937 : but there is no case which is comparable with this particular case. All the cases cited to us, whether they refer to a factory or warehouse, or seaside boarding house or bungalow, are subject to vital differences when compared with this house. In the case of the warehouse, one finds that there already had been a beneficial occupation, but the occupier had abandoned the premises for a time. Sometimes in those cases he left something behind. Sometimes where the warehouses are a block with other warehouses occupied by him, he has transferred the chattels next door, ready for return if and when he should let part of the warehouse. The seaside boarding house cases are cases in which they are occupied quite frankly during the season quite frankly they are left when the season is at an end quite frankly, there is an intention to come back directly the next season starts. In the case of the bungalows, there were five bungalows and furniture for four; and the furniture could be shifted about in either of the five, or to the display house as was most convenient. They are all based on special circumstances which, so far as I can see, are in no way akin to the circumstances which we are considering in this case today.
What, then, is necessary before you can arrive at a consideration of what is a beneficial occupation so as to make a house rateable? You have to find actual occupation. There cannot be simply a sort of thought transference from a distance of an intention at some time of coining to a house which you have never seen, and perhaps never will see, under certain circumstances which may never arise. There must be, in my view (and I think what I am saying is in accord with all those cases), actual occupation. There must be use: that is the word used in some of the cases.
Lord Atkinson, in Liverpool Corporation v. Chorley Union A.C [1913] A.C. 211, says:
"When the statute, therefore, enacts that the occupier of a house should be rated, it must mean that the person to be rated shall occupy the house as a house ; that is, that he shall use the house for the purpose of living in it, or sojourning in it, or working in it, keeping animals in it, storing other chattels in it, or using it for some such other purpose as houses may reasonably be devoted to; and that, as a vacant house is not used for any of these purposes, it is not occupied as a house within the meaning of the statute."
These houses were never occupied within the meaning of the statute. These houses were never used. Nothing was ever put into them. No preparation had been made for the reception of the offices. There had, in short, been no actual occupation.
There being no actual occupation, in my view it does not profit us to enter into long discussions of what intention there would be to use a house into which one had entered by way of actual occupation. There is no beneficial occupation here there is no occupation that makes these houses rateable.
The magistrates, when they came to the conclusion that because of the decisions in R. v. Melladew and Borwick v. Southwark Corporation [1890] 1 K.B. 78(the criticisms of which by my lord I entirely agree with) they ought to come to the decision that the defendants must be held to be occupiers, in my opinion reached a decision which was incorrect and, therefore, cannot be supported.
HALLETT, J. :I agree. The authorities seem to me to show that in order to establish rateable occupation there must be (a) legal possession, as to which see Holywell Union v. Halkyn Drainage Co [1895] A.C. 117 ; (b) actual occupation; and (c) beneficial occupation. The phrase "actual occupation" will be found to have been used by Faxwell, LJ, in R. v. Melladew, and also by Wright, J., as he then was, in L.C.C. v. Hackney Borough Council [1928) 2 K.B. 588, at p. 529. The phrase "actual possession" was used by Lord Russell in what is called the Victoria Station, case, The Mayor of Westminster v. The Southern Railway Company [1936] A.C. 511, at p. 529 [7 DRA., 137 (HL]. If it be said that in deciding whether there was an actual occupation by the alleged occupier during the period to which the rate relates, evidence of intention should be taken into account I respectfully agree. I think in many cases evidence of intention would be most relevant in deciding whether there has been, during the material period, an actual occupation. But if it were said that an intention to occupy is the same thing as actual occupation, then apart from authority, I should have said that it was clearly wrong. I should have said that the intention to do a thing and the actual doing of it (unless some Statute provides to the contrary) were always obviously different things.
As I understand, it is said that there are three authorities, one decision of the Court of Appeal and two of the Divisional Court, namely, Melladew's case, supra, Borwick v. Southwark Corporation case, supra, and a case which I think has not been mentioned in the other judgements'. but which was cited to us, of Bayliss v. Chatters [1940] 1 All ER 620, which compel me to come to a decision to which I should not otherwise have come. It is unnecessary that I should go through those cases, because the principle governing them has already been fully examined in the preceding judgements. Suffice it to Say that I find nothing in those cases which compels me to answer the question in this case in a way which I should not otherwise have answered it. I do not think that the actual occupation and a mere intention to occupy are the same thing, and I find no authority which compels me to take a different view. Therefore, I agree with the judgements which have already been delivered.
The Lord Chief Justice: I intended to say something about beneficial occupation, but I omitted to do so. I can summarise what I meant to say in almost one sentence. Occupation will fail to be rateable occupation if it is of no value to the person who is sought to be charged. In this case there is no dissent from the view that, if there is an occupation, there is beneficial occupation.
Southwark LBC v Briant Colour Printing Ltd 1977 The company was not held to be in occupation of a factory as the workers had undertaken a 'sit in' and therefore in occupation of the premises
Sheafbank Property Trust v Sheffield MDC 1988
Kent CC v Ashford BC
Cite: [1998] RA 217
Court: Queen's Bench Division
Judge: Collins J
Legislation Considered: The Education Act 1996 s 71, s 59(1).
Non-domestic rating
—
rateable occupation
—
controlled school
—
governing body or education authority as rateable occupier
The plaintiff local education authority applied for declarations against the respondent local councils (billing authorities) that the non-domestic rates payable in respect of the controlled schools in its area were to be calculated on the basis that the schools rather than the authority were in rateable occupation of the school premises.
If the schools were in rateable occupation, they were liable for only 20 per cent of the rates otherwise payable, because they held charitable status. Managerial and financial responsibility for staffing and rates had been delegated to each school's governing body by the authority's local management scheme.
The governing body was responsible for directing the conduct of the school, although the staff were employed by the authority, and staffing costs were met from the delegated budget. Responsibility for discipline fell to the governing body, so that the authority would have to abide by any decision made by it with regard to the dismissal of a member of staff.
The authority was legally the employer, but contended that, in reality, all relevant employment decisions were made by the governing body, and the staff had to be considered as acting on behalf of the governing body. On that basis the authority argued that the governing body was in physical occupation of the premises.
The authority also referred to the Education Act 1996 s 71, which provided that if a local education authority defaulted in its duty to maintain a voluntary school the Secretary of State could direct that any act done by or on behalf of the governing body would be attributed to the local authority, and reimburse any sums properly expended. It argued that the provision was needed as there was generally no agency between a local education authority and the governing body of a school. Held, the authority was the rateable occupier of the controlled schools.
The governing body was in occupation since it was the legal entity which had responsibility for the operation of the school. However it was merely acting as the authority's agent, as it was the conduit through which the authority's duties were carried out. Further, the authority funded the governing body, in that it provided a global sum which was intended to meet the school's total expenditure, and it retained ultimate control and residual power over the school.
The 1996 Act 1996 s 59(1) made it clear that the governing body of a school was not responsible for any of the expenses of maintaining it. The authority's argument based on the 1996 Act s 71 could not be sustained, since the section was designed to cover a position where a local education authority had failed in its funding obligations, so as to enable the Secretary of State to make reimbursements without any scope for argument whether a particular payment was properly made. Accordingly, the application would be dismissed.
Tomlin v Westminster CC 1989
References: [1990] RA 79
Court of Appeal
CROOM JOHNSON LJ: This is an appeal from the judgment of Henry J, who allowed an appeal by way of Case Stated, from a decision of the Stipendiary Magistrate sitting at Horseferry Road. The Westminster City Council had laid a complaint that the appellant, Mr Tomlin, being a person duly rated and assessed in the City, had failed to pay the sum of £27,090.20 being the general rate and costs in the summons for the period the 1st April 1983 to the 31st March 1987 in respect of premises described in the valuation list as "House, garage and premises, 21 Avenue Road, NW8". The council applied under the General Rate Act 1967, s 97 (1), for a warrant for distress.
The rating authority cannot know the full circumstances surrounding each rateable property in its area, and s 97 (1) contemplates that if the authority establishes a prima facie case that the rates have been properly demanded and not paid, the burden of proof then shifts to the respondent to the summons to appear and show for one reason or another why he has not paid (see Des Salles D'Epinoix v. Kensington and Chelsea London Borough Council. In the present case the issue is whether the appellant, Mr Tomlin, was in rateable occupation.
The premises concerned are the former Cambodian Embassy. The Government of Cambodia was overthrown in the mid 1970s, when a rival regime, namely Pol Pot and the Khmer Rouge, took power in that country. The country's diplomats thereupon left the Embassy, and thereafter the premises were occupied by trespassers, of whom Mr Tomlin was one. He has remained there ever since.
Since then no rates have been paid in respect of the premises. An attempt to obtain payment up to the 31st March 1983 proved unsuccessful.
It is necessary to read at some length the facts as found by the magistrate, which were as follows:
"2. (b) The making publication and demand of the general rate in question was according to law.
(c) The premises had been occupied from the 1st April 1983 to the 31st March 1987 and the amount due including costs was correctly calculated at £27,090.20.
(d) The [appellant's] name appeared in the 'Rating Records' as the ratepayer and he had been residing in the hereditament together with about seven other persons calling themselves the Guild of Transcultural Studies.
(e) The hereditament had been the Cambodian Embassy until the mid 1970s when it was vacated by the diplomatic representatives of the Government of the Khmer Republic and thereafter it was occupied (as to tenancy there was no evidence) by the Guild of Transcultural Studies, an unincorporated association; the Guild's brass nameplate was affixed to the front of the hereditament.
(f) An officer of the rating authority visited the hereditament by appointment on the 21st September 1982 and was shown over it by the [appellant] and the latter's solicitor and took tea with them. The purpose of the visit was to discuss the situation about rates and the [appellant] mentioned that the Guild had applied for charitable status. The officer of the rating authority explained that if this application had succeeded the [appellant] might have obtained the benefit of s 40 of the General Rate Act 1967. The [appellant] told the rating authority's officer that the previous application for charitable status had been rejected because of poor preparation and the [appellant's] solicitor said that there would be a fresh application. On his inspection, the officer noted that none of the bedrooms appeared to be locked though he did not test any door to see if it was locked and was not shown into any room occupied by a person who was not then present on the premises.
(g) The hereditament is spacious and well appointed and includes a fully equipped kitchen, a ballroom and garden all being well maintained and furnished like a private house. The ballroom with living accommodation above was contained in a separate building at the rear in what had once been the chancellory of the former embassy. This can be reached by a pathway from the house and has its own separate entrance to a neighbouring street.
(h) The Foreign and Commonwealth Office has a continuing obligation under the Vienna Convention to visit the hereditament every six months or so and Colonel W P A Durrant from the Protocol Department of that Office made visits between May 1982 and September 1986. These viewings were not by appointment and on seven of the eight occasions of viewing, the [appellant] answered the door personally and conducted Colonel Durrant around the premises; on the eighth viewing the [appellant] quickly joined Colonel Durrant after he arrived. The [appellant] on each occasion took Colonel Durrant around the whole hereditament and knew in which room people lived. The activities of the Guild were discussed between Colonel Durrant and the [appellant]; it was held out to be meditative and of oriental inspiration and one of the main rooms on the ground floor is used as a temple.
A number of people live at the premises Colonel Durrant noted about eight on each of his visits and was told that each contributed a small amount towards the cost of utilities. None of the bedrooms was seen to have cooking or eating facilities and all were viewed at one time or another. Some of the rooms had separate meters. The [appellant] introduced some residents to Colonel Durrant and they included an accomplished violinist, a carpet weaver and a homeopathic doctor of medicine.
(i) The rating authority had served rate demands on the [appellant] for the periods in question and these demands [tad not been questioned.
(j) The [appellant] dealt with the electricity account between 1982 and 1986 and the account was currently in the name of the Guild. On the 12th October 1986 the [appellant] signed an order for work to be done.
(k) The water account was in the name of the [appellant] and was paid by him until upon request dated the 25th October 1984, the account was put into the name of the Guild.
(l) I also had regard to exhibits 1 16 which were produced during the course of the evidence called on behalf of the [rating authority]."
That concludes the magistrate's findings of fact.
Among the documents exhibited and referred to in para 2 (1) of the exhibits were an application by Mr Tomlin dated the 7th November 1976 to London Electricity Board for the supply of electricity for domestic purposes; an application by him dated the 11th November 1981 to Thames Water for metered water supplies, together with the necessary money deposit, and a letter of the 25th October 1984 from a Mr Richard Arnold, describing himself as Secretary to the Guild of Transcultural Studies, to Thames Water asking them to transfer the water account and supply "as from the last bill paid by Mr D Tomlin, from this date to the Guild of Transcultural Studies".
A letter from Mr Tomlin to the Water Authority dated the 27th March 1985, concerning some sort of rebate, says that his work is taking him from place to place at the moment, but asking that the rebate be sent to 21 Avenue Road "as I will be calling there from time to time". That letter needs to be taken into account when considering paras 2(h) and 2 0) above of the facts found by the magistrate concerning the unannounced visits to the premises by Colonel Durrant up to September 1986, and Mr Tomlin's dealings with the electricity supply to October 1986.
The complaint was laid by the rating authority on the [st December 1986. The hearing before the magistrate was on the 11th March 1987. At the conclusion of the evidence called on behalf of the rating authority, a submission was made that there was no case to answer. The magistrate required Mr Tomlin to elect either to call evidence or to rest his submission. Mr Tomlin chose the latter.
The magistrate was of the opinion:
(1) That the rate had been duly made, published and demanded of Mr Tomlin for the years 1982 1986 inclusive.
(2) That Mr Tomlin played a leading role in the affairs of the Guild.
(3) That the description in the valuation list was sufficient to include all the property in the hereditament.
(4) That there was insufficient evidence of exclusive occupation by Mr Tomlin to raise a burden upon him to respond to the complaint.
The rating authority appealed by way of Case Stated. There were two questions for the opinion of the High Court:
(i) whether the magistrate was correct in finding that there was no sufficient evidence of rateable occupation by Mr Tomlin to raise a burden to respond under s 97, and
(ii) whether the magistrate was correct in law to put Mr Tomlin to his election.
On the 29th July 1988 Henry J answered the first question "No". On the second question he remitted the complaint to the magistrate to say whether he had ruled in the exercise of his discretion, or as a matter of law. The appeal to this Court is solely on the first question.
Henry J correctly directed himself on the approach laid down in Ratford and Another v. Northavon District Council.
At [1988] RVR 196, 197, Henry J said:
"The approach based on the authorities has been laid down by the Court of Appeal, per Slade LJ in the case of Ratford and Another v. Northavon District Council.He has distilled four propositions. First: 'A rating authority will not be justified in applying for a summons against a person under s 97 (1) of the Act if it has no reasonable grounds for believing that he is or may be in rateable occupation of the premises in question. . . .'
Second, that that situation only applies where on the facts known to the rating authority the respondent could not have been so regarded as a reasonably possible candidate for the position of rateable occupier.
Third, subject to (1) and (2) above, all the rating authority must show is that the rate was duly made, demanded and not paid. Thereafter the burden of showing non occupation by the respondent shifts to the respondent.
Fourthly, such burden of proof will be on the basis of the balance of probabilities, this being technically a civil matter.
Further help on the question of the burden of proof is to be found from the decision of the Divisional Court, Donaldson LJ (as he then was) presiding, in the case of Forsythe v. Rawlinson. The suggestion there made is that in order to decide who might have been the occupier the court should look, first, to see whether the building was occupied and then the possible candidates of those who might have occupied it 'it' in this case being the hereditament, ie the entire premises.
The basic finding here is clear; that the premises were occupied throughout and occupied by the Guild, an unincorporated association; and that the respondent, whose name appeared in the rating records, played a leading role in the Guild's affairs and had been residing there with about seven others calling themselves the Guild."
The facts as found by the magistrate must be considered against the four essential elements of rateable occupation, set out in J. Laing & Son v. Kingswood A.C. These were:
(a) there must be actual occupation;
(b) exclusive for the particular purpose of the possessor;
(c) it must be beneficial; and
(d) not too transient.
In the present case it is "exclusiveness" which is in issue, subject to certain submissions of law which have been made by counsel for the appellant. These are that the law, when applied to the magistrate's findings of fact, prevent those findings from amounting to a prima facie case of rateable occupation against Mr Tomlin.
Counsel for the appellant's principal submission is that a trespasser cannot be in rateable occupation. If he is wrong about that:, he submits that the nature of trespass prevents two or more trespassers who are individually in occupation of the property from being in joint occupation so as to make each liable to be rated on the whole.
If he is right on either of those submissions, it must mean that squatters can never be liable to pay rates.
His third point is that on the facts, for one reason or another, Mr Tomlin was not in exclusive occupation of the hereditament.
His fourth point is one of the grounds on which Henry J found against Mr Tomlin, namely that he was a trustee (actual or by conduct) of the Guild and was wrong in law.
An unincorporated association, such as the Guild of Transcultural Studies, is not capable of being in occupation of anything. It is a nonentity. If it functions, as in this case, from premises, rateable occupation of those premises can only be exercised by an individual or by individuals. This brings one to counsel for the appellant's first point: Can a trespasser be in occupation for rating purposes? One is bound to say that the judicial opinion in the authorities, to which counsel for the appellant has directed our attention, are really all one way. There are many dicta to say that trespassers can be in such occupation, but not direct authority. This may be because, since liability to pay rates depends on occupation, it has always been assumed that trespassers (like everyone else) are liable. It may be, as counsel for the rating authority has suggested, that since trespassers are often either fleeting, or not worth powder and shot, that rating authorities do not bother with them.
The circumstances here are different. There is an organised body which has been living in the premises in an orderly fashion over a period of years.
In R. v. St. Pancras Assessment Committee (1876) 2 QB 581, Lush J said, in describing the concept of occupation in rating:
"It is not easy to give an accurate and exhaustive definition of the word 'occupier'. Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a vacant house is in possession, and may maintain trespass against anyone who invades it, but as long as he leaves it vacant he is not rateable for it as an occupier. If, however, he furnishes it and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may not reside in it one day in a year.
On the other hand, a person, who, without having any title, takes actual possession of a house or piece of land, whether by leave of the owner or against his will, is the occupier of it."
As to his principal submission that trespassers cannot be occupiers, counsel for the appellant submits that all the dicta to the contrary are obiter. Nevertheless, in the celebrated statement in R v. M Bell (and four others) (1798) 7 TR 598 at p 601:
"If a disseisor obtains possession of land, he is rateable as the occupier of it",
Lord Kenyon was clearly using the word "disseisor" in its technical sense of "wrongful occupier", and the statement by Lord Cairns LC in Cory v. Bristow (1876 7) LR 2 AC 262 at p 273 that wrongful occupation is rateable is to the same effect:
"For the purpose of rating it might indeed be sufficient to look at the mere fact of occupation. They (the appellants) are found in occupation of that which is to them a valuable occupation of this fixed property, and are therefore rateable to the relief of the poor, even though it might turn out that their occupation is a wrongful one, or one the propriety of which they cannot justify."
A recent authority is Southwark London Borough Council v. Briant Colour Printing Co. Ltd. [1977] 3 All ER 968, [1977] 1 WLR 942, 20 RRC 133, 75 LGR 768, 142 JP 1, [1977] RA 101, 244 EG 379, [1977] EGD 710 . There the liquidator of a company which owned a factory was excluded for some months by the workforce. They were in dispute with their employers as to the sale of the factory, and excluded the liquidator from it. The rating authority sought a declaration that the company was, by its liquidator, the occupier of the factory during the relevant period. Slade J (as he then was) held that it was not. Slade J stated that actual occupation is purely a question of fact, and has nothing to do with legal rights. In connection with the closely related, but slightly different, topic of exclusivity, he went on to refer to a passage in Ryde on Rating (13th edn), p 27, which describes what amounts to the necessary condition of exclusive occupation:
"Occupation is exclusive if the occupier can exclude all other persons from using the land in the same way as he does; occupation does not cease to be exclusive because other persons use the land in some other way, for their different uses may make them separately rateable. Exclusive occupation can arise if land is used pursuant to an exclusive right or title, or if the use of the land, albeit not in pursuance of an exclusive right or title, is such that it in fact excludes others from using the land for the same purposes. Occupation is not exclusive if it is subject to the overriding control and direction of another."
Slade J then went on to say at [1977] 1 All ER 849, 864:
"it seems to me that where, as in the present case, the owner of a building is wrongly excluded from it by trespassers, who thenceforth over a period of several months continuously remain in and retain control of the building to the entire exclusion of the owner, the trespassers have actual and exclusive occupation of the building within the meaning of the rating cases over the relevant period, but the owner does not. Nor do I think it relevant in this particular context that the trespassers may have comprised a fluctuating body of persons. "
This passage was approved in the Court of Appeal by Buckley LJ in Southwark London Borough Council v. Briant Colour Printing Co. Ltd. [1977] 3 All ER 968, [1977] 1 WLR 942, 20 RRC 133, 75 LGR 768, 142 JP 1, [1977] RA 101, 244 EG 379, [1977] EGD 710 , with whom Scarman LJ and Sir John Pennycuick agreed. Buckley LJ said at [1977] RA 101, 122:
"With that statement I entirely agree. In the past three centuries there must have been innumerable occupiers of property who have been rated in respect of such property notwithstanding that they had no legal title. The fact that the participants in the work in were actively defiant trespassers cannot make them any less rateable than they would have been if their lack of title had been less ostentatious; indeed, it is in my judgment clear from R. v. Bell, where the defendant was, I think, undoubtedly a trespasser, that a trespasser is rateable in respect of his wrongful occupation of another's land. Lord Kenyon CJ said, at (1798) 7 Term Rep 598, p 601: 'If a disseisor obtains possession of land, he is rateable as the occupier'. Reference was also made in this connection to Kittow v. Liskeard Union (1874) LR 10 QBD 7, a decision in the Queen's Bench Divisional Court."
Counsel for the appellant has submitted that the reference to the trespassers being in rateable occupation in the Southwark London Borough Council v. Briant Colour Printing Co. Ltd. [1977] 3 All ER 968, [1977] 1 WLR 942, 20 RRC 133, 75 LGR 768, 142 JP 1, [1977] RA 101, 244 EG 379, [1977] EGD 710 case was obiter.
Slade J had continued at p 867 of that report that he would have been prepared to find that the members of the work in committee themselves fulfilled all the four essential elements of rateable occupation and were in rateable occupation, but did not consider that the evidence before him clearly established that any named individual or individuals capable of ascertainment were in occupation of the factory for any specific period or periods.
In the Court of Appeal Buckley LJ dealt with the point in this way at p 124:
"Mr Nicholls has stressed that where there is joint occupation of a rateable hereditament, every joint occupier is severally liable to be rated for the whole of the relevant amount of the rate on the hereditament. It is therefore irrelevant that some of the workers, who started working when the work in began, dropped out before the force decreased in numbers, I think from 150 at first to something like 80 towards the end. The evidence indicates that it is ]probable that there were at least three or four members of the committee who were members throughout the whole period.
For my part I would be prepared to reach the conclusion upon the evidence that somebody was in rateable occupation of the factory, other than the company, during the relevant period, but that there is insufficient evidence to identify who that person was, or who those persons were. But I should be prepared to hold, if it were necessary for the disposal of this appeal, that upon the evidence it is clear that there was somebody, or there were some people, other than the company, who were in rateable occupation of the factory throughout the relevant period. . . ."
For present purposes I would agree with counsel for tile appellant's submission that that part of the Briant case was obiter. Nevertheless, that authority is of high persuasive authority. The reason why counsel for the appellant submits that trespassers cannot be in rateable occupation is that the occupation by a trespasser is subject to the right of the true owner to enter, and is, as he describes it, a "vulnerable" occupation.
But in Bruce v. Willis (1840) 11 Ad & El 463, Lord Denman said at p 479:
"Suppose a trespasser took possession of land, and devoted it to his own purposes, and, an action being brought, the jury, on a trial, gave the proprietor damages equivalent to the full value of the land, after which the trespasser still kept possession without any conveyance. If the overseers then rated him as the occupier of the land, could he say 'I am not the owner'? And, if he said so, might not the parish officers reply that it signified nothing to them whether he was the owner or not?"
And in the case of Kittow v. Guardians of Liskeard Union, is clear authority that the title under which an occupier holds is immaterial for rating purposes.
Counsel for the appellant puts the point another way. It is said that as none of them has any right to be there, the trespassers' position, vis a vis each other, is identical, and that therefore none of them can have exclusive possession. Even if the situation is looked at purely on the basis of actual occupation, the result, he submits, is the same. He has sought to rely on a short paragraph in the speech of Lord Diplock in Commissioner of Valuation v. Fermanagh Protestant Board of Education, as suggesting that there has to be a legal right of occupation of some sort before the occupier can be rated. But in that short passage Lord Diplock was dealing with a wholly different subject, and not with trespassers at all. What he said was entirely consistent with the subject for decision in that case, and no help is to be obtained from it.
The answer to this part of the case is that there was clearly exclusive occupation by the group of squatters calling themselves the Guild. As counsel for the rating authority has pointed out, the name by which they called themselves is irrelevant in one sense, but the fact that they put a plate up outside, and that visitors had to be let in by the front door, shows that the squatters were excluding other people from the premises, and asserting their own exclusive occupation of the house as a whole. As counsel for the appellant has conceded, two partners each have occupation of the whole of the premises of the partnership. Looking only at occupation, the position is prima facie exactly the same if two or more trespassers together enter on premises in the same way. The), are jointly in occupation, just as people all with the same legal right would be.
Where people are in joint occupation, the liability for rates may be enforced against either, if each is in occupation of the whole and not only of part. Authority for that is R v. Paynter (1845) 7 QB 255. In that case there were a number of equal owners and occupiers of the toll house on Putney Bridge, being the subscribers towards its construction. A Mr Chasemore was, with a number of others, assessed for rates in respect of it. He did not pay, and when application was made for a distress warrant, he objected that some persons were improperly inserted in the assessment, and (as was indeed the fact) that some proprietors were omitted from it. Those who were omitted might be regarded as the equivalent of the other members of the Guild of Transcultural Studies.
The Court of Queen's Bench held that he was liable and might be distrained upon. At p 271 Lord Denman CJ, said:
"One of those parties appears: he is liable in the first instance for the whole; and he must get contribution from the others as he can."
At p 272 Patteson J said:
". . . the assessment is made upon all jointly, and the distress must be levied upon one for all, or upon several, as may be practicable."
Wightman J agreed.
It is also worth quoting Griffiths v. Gower Rural District Council. That was a case of joint ownership and joint assessment, but a distress warrant was issued against only one of the occupiers. At (1970) 17 RRC 69, 7 Lord Widgery CJ said this:
"The first question raised by counsel for the appellant is the, to me, rather startling proposition, that you cannot have a joint occupation for rating purposes by two or more people. There are certain authorities dealing with occupation by husband and wife which discuss the rather special situation which then arises, but there is no authority which has been shown to us to suggest that if one leaves aside the relationship of husband and wife, there is any difficulty in the conception of two or more people being rateable occupiers if they do have similar and concurrent rights to the use of the property, and that is exactly the position here. I can see no reason whatever for taking the view that there cannot be a joint occupation for rating purposes, and indeed I do not know how one would solve the resultant chaos if one could not, because the question which would arise in the present case is: who is going to pay, and if it could riot be accepted as being a joint liability of the two gentlemen concerned, I do not know how the council would get their money at all."
In the instant case, all the joint occupiers were liable for the rates, but the assessment was upon Mr Tomlin alone. Counsel for the appellant accordingly relies upon Verrall v. Hackney London Borough Council. In that case Mr Verrall was a prominent member of the National Front, an unincorporated entity. The National Front's headquarters was, on the facts, in several different occupations, but the National Front had been regarded as "the paramount occupier", and Mr Verrall was assessed for the rates for the whole premises. The Court of Appeal held that that was wrong. Verrall's case is far removed from the present case, where the Guild has been regarded simply as a composite name for all the squatters. In so far as Mr Tomlin is the only joint squatter who has been assessed, the question to be asked is whether he was, or might be, in rateable occupation of the premises (see Ratford and Another v. Northavon District Council.
Having regard to the history of events, and in particular to the facts found that he seems to have adopted an attitude of' control when receiving visitors and showing them round, he was a reasonably possible candidate for the position of rateable occupier, or of one of them.
But counsel for the appellant's third point is that on the facts Mr Tomlin was not in exclusive occupation of the whole hereditament. He points in fact to paras 2(f) and 2(h) of the case, where it is said that each of the inhabitants had his own room, and that some of the rooms had their own meters of some kind. That is a matter which Mr Tomlin might have been able to enlarge upon, had evidence been given for him, to show that he was not in occupation, alone or with others, of the whole hereditament, but only in occupation of part of it. But it is quite insufficient to displace the inference raised by the fact that the public rooms were communal, and the cooking and eating facilities were central.
I am of the clear view that Henry J was correct in holding that the totality of the evidence pointed to an exclusive joint occupation by the squatters to justify a finding that a prima facie case against Mr Tomlin, as one of the joint occupiers, had been made out to raise a burden on him to respond to the complaint. In those circumstances it is unnecessary to consider the application of the alternative finding that Mr Tomlin was a trustee by conduct, or to consider the case of R v. Brighton Justices ex parte Howard.
The appeal should be dismissed and the case should be remitted to the magistrate in accordance with the order of Henry J.
MANN LJ:I agree.
FOX LJ: I also agree.
References: [1960] 813 A.C.
HOUSE OF LORDS
VISCOUNT Kilmuir LC: My Lords, this is an appeal against an interlocutor of the Second Division of the Court of Session by which the court adhered to an interlocutor of the Lord Ordinary (Lord Guest) decerning against the appellants in terms of the first conclusion of the summons for payment to the respondents of £2,141 13s. 4d. My Lords, liability for rates in Greenock depends upon section 16(1) of the Valuation and Rating (Scotland) Act, 1956, which enacts: "In the year first commencing after the passing of this Act and in every subsequent year every rate levied by a rating authority shall be payable by occupiers only ..." By section 379(1) of the Act of 1947 "occupier" is defined as meaning "the tenant or sub-tenant or any person in the actual occupation of land." Section 243(1) of the Act of 1947 (as amended by the Act of 1956) enacts that, save as otherwise provided in a local Act, "any rate levied by the rating authority shall not be payable in respect of lands and heritages if the lands and heritages are unlet, unoccupied and unfurnished throughout the whole of the year from Whitsunday to Whitsunday corresponding to or as nearly as may be to the period for which the rate is levied." We were assured that there is no relevant local Act. The premises in question were admittedly unlet and unfurnished and the question is whether they were unoccupied in the sense used in the context of rating. Lord Patrick thought that the word "actual" in section 379(1) of the Act of 1947 had been used to make plain that the occupation which is necessary to make the occupier liable to pay rates is de facto occupation as opposed to de jure occupation, the kind of constructive occupation which might be held to flow from mere ownership of land. I am disposed to agree with him on this, and also when he says that for the purposes of the Act of 1947 an owner of land must have made some actual use of the premises in the relevant year before he can be called on to pay rates. The crucial question, however, is what kind of use is contemplated or, in other words, whether it is sufficient to make alterations with the intention of carrying on a business when the alterations are completed.
I do not think it is. I accept broadly the argument for the appellants which can be put in this way. The sole purpose of the appellants in acquiring the premises was to use them as a bonded store in connection with their business as warehousemen. The alterations were necessary in order that this purpose might, if the alterations were approved by the Customs and Excise, receive effect. Yet activity carried on in relation to premises, the sole object of which is to make the premises fit for the only use which is contemplated, does not amount to the kind of actual user as is essential to rateable occupation. So long as the activities were confined to making the premises fit for a contemplated purpose, the premises were not serving the appellants' purposes as warehousemen. The premises were not being applied to the purpose for which they existed but were in an antecedent stage. It must be remembered that under rating law it is open to the owner to sterilise a property - whether by leaving a house without furniture or otherwise - which is perfectly capable of being let for a valuable rent. If, therefore, there is no use of premises according to their nature I find it difficult to see how there is occupation attracting liability for rates. The learned judges who considered this case in the Court of Session were obviously much impressed by the advantage which, in their view, the appellants would receive from altering the premises.
I cannot, however, take their next step of saying that because it was an advantage to the appellants to alter the premises, therefore the appellants were making beneficial use of the premises. It is an undoubted advantage to the owner of an empty house to put on some slates and keep it weather tight, but the fact that he does so could not create rateable occupation where none existed. I cannot myself accept the view that when a person is repairing or altering something designed for a particular purpose, he is by that action making use of it. The learned Lords of Session were able to find support for their view in the decisions of this House in Mersey Docks and Harbour Board Trustees v. Cameron; Jones v. Mersey Docks and Harbour Board Trustees and Clyde Navigation Trustees v. Adamson. With the greatest respect, I cannot find any. When I consider the use made of its premises by a docks and harbour board, I have no difficulty in recognising it as a full as well as a beneficial occupation, although the board is precluded from making a profit. In these cases the dock estates were clearly being used according to their natures and the decisions do not, in my view, help in the problem raised by the instant case.
As, however, reliance has been placed on certain English cases and everyone has treated the law of Scotland and the law of England as being the same on this point, I want to say that I do not think that they place any real difficulty in the way of the view which I have formed. It will be noted that in Hackney Borough Council v. Metropolitan Asylums BoardLord Hewart indicated that the carrying out of alterations without more might not amount to rateable occupation. My difficulty is to perceive the relevance of the accumulation of small facts on which the decision that there was rateable occupation was reached. I do not think that the cases where the ratio decidendi was that the premises were in effect "stand-by" premises, such as Borwick v. Southwark Corporation and Associated Cinema Properties Ltd. v. Hampstead Borough Council, help in the decision of this case. It follows that, in my view, the two cases in sheriff courts, Commercial Bank of Scotland v. Glasgow Corporation and Co operative Permanent Building Society v. Pinkerton, were not rightly decided. For all these reasons I would allow the appeal.
Lord Reid.My Lords, in this action the respondents sue for £2,141 13s. 4d., being rates due for the year from Whitsunday, 1957, to Whitsunday, 1958, in respect of warehouse premises at Ker Street, Greenock. The appellants acquired these premises in March, 1957, with a view to using them as a bonded warehouse. Before premises can be used for that purpose the requirements of HM Customs and Excise as to security must be satisfied. Preliminary approval of the premises was given in September, 1957, and alterations with a view to improving the security of the premises were made by the appellants between March 3 and June 16, 1958, whereupon provisional approval was given and the appellants were free to use the premises for their intended purpose.
The appellants' defence is that throughout the year in question the premises "were unlet, unoccupied and unfurnished within the meaning of section 243 of the Local Government (Scotland) Act, 1947." If that is established, then occupiers' rates are not payable. Owners' rates having been abolished in 1956, the whole sum now sued for represents occupiers' rates, and if the appellants' contention is correct it is a complete defence to this action. The premises were unlet and it is now admitted that they were unfurnished throughout the year. The case turns on whether they were "unoccupied" throughout the year.
The facts are not in dispute. The premises remained empty and the only operations carried out in them by the appellants during the year were some slight repairs to the roof in January and the alterations begun on March 3 and not completed by Whitsunday. These alterations comprised bricking up some windows and doors and fitting iron bars to some other windows. The respondents do not attach importance to the repairs, but they maintain that by making these alterations the appellants occupied the premises. What, then, is the meaning of "unoccupied" in the Act of 1947? There is no definition of the word, and the only assistance to be got from the Act is in the definition of "occupier" in section 379(1) which includes "any person in the actual occupation of land." Premises are therefore unoccupied unless there is "actual" occupation by somebody. But that does not throw much light on what is meant by "occupation": it only excludes occupation which is not actual but only notional - if there can be such a thing as notional occupation.
There is singularly little authority in Scotland on the meaning of occupation and, apart from two sheriff court cases, there is none in point in this case. In England there is a wealth of authority, not always consistent, but again, with one possible exception, there is none exactly in point here. I therefore think it proper to begin by taking the word "unoccupied" as an ordinary word of the English language and considering its possible meanings. It could, I suppose, mean that no one ever set foot in the premises during the relevant period, but I reject that meaning at once, both because it has never even been suggested so far as I know in any authority or textbook, and because, very properly, it was not argued in this case. So if the owner can himself enter or send in others without thereby "occupying" the premises, the criterion of occupation must be either how frequently he or his representatives go in or what they do when they are here. No one has contended that entry for inspection or cleaning or ordinary maintenance such as heating in cold weather or carrying out ordinary repairs to make the premises wind- and water-tight constitutes occupation, and it appears to me that occupation must involve something more than that. But if that be so, I have difficulty in seeing on what reasonable principle the making of the alterations in this case can be held to constitute occupation. It might easily be necessary to do work not dissimilar in character and extent from that done here to make good doors and windows broken by natural or human agency. And, moreover, where fairly extensive repairs are necessary the old position is not always exactly restored: the opportunity is taken to carry them out in such a way as to make improvements. It would seem to me very odd if in such a case the criterion were whether or not the work done has improved the premises or made them more valuable to the owner. But I can see a clear distinction between maintaining, repairing or improving a fabric, on the one hand, and enjoying the accommodation which it provides, on the other. And I think hat it would accord with the ordinary use of language to say that the owner who in some way enjoys the accommodation is occupying the premises, but that the owner who merely maintains, repairs or improves his premises is not thereby occupying them: he is preparing for future occupation by himself, his tenant or his disponee.
It appears to me that the difficulty in this case arises from a misapplication of the requirement that, to be rateable, occupation must be beneficial. The argument is that if you find the owner making use of his property, and if the word "use" is used in that wide sense that argument must, I think, be wrong or at least too widely stated. If bricking up doors and windows is beneficial use, I do not see how it can be said that replacing or repairing broken doors and windows is not also beneficial use: the premises might be unusable until the repairs had been done. The real question in this case, to my mind, is not whether that kind of use was beneficial. It is whether that kind of use, beneficial or not, can amount to occupation. A good deal was said in argument about the decisions of this House in Mersey Docks and Harbour Board Trustees v. Cameron; Jones v. Mersey Docks and Harbour Board Trustees and Clyde Navigation Trustees v. Adamson. There statutory boards had made full use of their premises; they did all the things that a normal occupier would do, and the quality of their use was not in issue. Their case was that they did not have to pay rates because they were precluded from making profit. Their occupation was nevertheless held to be beneficial and rateable: it was beneficial because it was of property capable of yielding a net annual value. Since that time occupation of such property has been held rateable whether or not the occupier derives profit from it.
But those cases throw no light on the question what kind of use amounts to occupation, and do not in the least support the fallacious argument: occupation to be rateable must be beneficial; these owners made beneficial use of their property; therefore they were in rateable occupation. I do not propose to examine subsequent English authorities. They show that it may be difficult in particular cases to show whether there was such enjoyment of the property as to amount to occupation. But with one exception they do not involve the present question. The exception is Hackney Borough Council v. Metropolitan Asylums. I find it somewhat difficult to determine the ratio decidendi, but it would seem to be that although individual acts of maintenance and improvement do not constitute occupation, an accumulation of such acts may do so. I would doubt that. But I think it unnecessary to decide that such an accumulation could never amount to occupation: it is sufficient to say that that could only be so in exceptional circumstances, and that there is nothing exceptional in the present case. It follows that, in my opinion, the two sheriff court cases - Commercial Bank of Scotland v. Glasgow Corporation and Co-operative Permanent Building Society v. Pinkerton in Glasgow Sheriff Court on June 18, 1958 - were wrongly decided. For the above reasons, I agree that this appeal should be allowed.
Lord Radcliffe. My Lords, we have here to consider the rateability of a warehouse owned by the appellants but not put to any use by them during the relevant year except so far as entry upon the premises by workmen, and the carrying out by them of alterations to the fabric, may constitute "use" for this purpose. The alterations were required in order to render the warehouse properly secure for service as a bonded store in accordance with Customs regulations. The specific items of work mentioned were the bricking up of certain windows and doors.
I take it, therefore, that this is not a case of an existing building being reduced for the time being to an incomplete state by far-reaching structural alterations, but is a case of an existing building being subjected to certain modifications of its structure which, until completed, left it unfit for the intended business use. It has been common ground that the appellants' claim not to be rated in respect of the premises depends upon section 243(1) of the Local Government (Scotland) Act, 1947, the effect of which is to provide exemption from rates in respect of any hereditament which has been "unlet, unoccupied and unfurnished throughout the whole of the year from Whitsunday to Whitsunday corresponding to or as nearly as may be to the period for which the rate is levied." Certainly the warehouse was neither let nor furnished during the relevant period; but was it unoccupied? That rests upon the meaning which is to be attributed to the words "occupier" or "occupied" or "occupation" where they appear in the context of a rating enactment. In section 379(1) of the same Act "occupier" is defined as meaning the tenant or sub-tenant or "any person in the actual occupation of land." In my opinion, the word "actual" has no particular significance here. The question is still, What is meant by "occupation"? And that, I think, can only be answered by considering what acts, intentions or situations are requisite to constitute occupation for the purposes of rating.
Both the learned Lord Ordinary and the learned judges of the Second Division of the Court of Session treated the law of Scotland and the law of England as being the same on this point, though I have no doubt that differences between the two systems may lead to divergences in other respects. Consequently, English decisions were referred to so far as they threw any light upon the principles of law to be applied, though no English decision has dealt with a case precisely similar to that which is now before us. Having regard to the general link between the conceptions of rateability ruling in the two countries, which was confirmed by the successive decisions of this House in Mersey Docks and Harbour Board Trustees v. Cameron; Jones v. Mersey Docks and Harbour Board Trustees and Clyde Navigation Trustees v. Adamson, I should have been disposed in any event to consider the case on the same basis: but I am confirmed in this approach by my understanding that both of your Lordships who are trained in Scottish law take the same view as the Second Division upon this matter. My Lords, I think that consideration of this case must begin by recognising that an empty dwelling-house is not rateable, and the owner of it is not regarded by the law as an occupier for rating purposes. It is no doubt something of a curiosity that the owner can by his own decision and for his own purposes withdraw from rateability a hereditament which may be of substantial annual value, and for which a tenant would readily give a profitable rent. But so it is, even though the principle of it puzzled so great an authority as Lord Blackburn (see Harter v. Salford Overseers). Whether the rule is "in truth an exception from the general law of rating" (per Lord Russell of Killowen in Townley Mill Co. (1919) Ltd. v. Oldham Assessment Committee, it is nonetheless an established part of that law. It accords with the principle that, to be a rateable occupier, a person must enjoy some benefit from the land: his occupation must be "a thing of value." The explanation has been said to be that the owner of an empty house does not use it "as a house" within the meaning of the original Poor Relief Act of 1601 (see per Lord Atkinson in Liverpool Corporation v. Chorley Union Assessment Committee); and it has been decided at various times that, while putting the owner's furniture in the house does set up rateability, presumably because some use of it as a house, is being obtained, keeping a caretaker in the house merely as a custodian does not constitute occupation by the owner. It is evident, therefore, that there will not be occupation in the context of rating unless some use is made of the hereditament in the course of the relevant year. "Use" is not a word of precise meaning, but in general it conveys the idea of enjoyment derived by the user from the corpus of the object enjoyed.
When rating law turns its attention from dwelling-houses to industrial or commercial premises the same conceptions are, in my opinion, applicable to determine whether or not occupancy ceases or begins, though they must be adapted to the particular circumstances of such premises, factory or warehouse, and the business for the purpose of which they are created. Nevertheless, I think that the words of Farwell LJ in R. v. Melladew 1 KB 192 provide a satisfactory indication of the correct test: "Rateable property has many varieties; of some the normal use is by personal occupation, e.g., a dwelling-house, of others by occupation by live or dead stock, e.g., a linhay used as a shelter for cattle, or a barn; and the nature of the property and its mode of use must be considered in each case. The test, in a case like the present, of business premises, appears to me to be, Has the person to be rated such use of the tenement as the nature of the tenement and of the business connected with it renders it reasonable to infer was fairly within his contemplation in taking or retaining it?" Now, the appellants never used the warehouse in question here as a warehouse during 1957-58. That, I think, is the determining point. They did not buy it for any purpose of use except as a bonded store, and that only when their adaptations were complete and their licence permitted. This is not a case of a warehouse being kept empty in one year by its owner after it had been used as such by him in the previous year: nor is it one of those cases of "stand-by" premises such as were the subject of decision in Borwick v. Southwark Corporation and Associated Cinema Properties Ltd. v. Hampstead Borough Council. Nor, again, is it a case of premises bought for one business purpose being, in fact, put to some other use. Here, if nothing more had been done than was done up to the date when the work of adaptation began, there would have been no question of rateable occupation. The whole issue is whether the acts that were done in carrying out these works amounted to such a use of the hereditament as set up an occupation within the year. In my opinion, they did not. Since language is not a precise instrument, it is possible to say that there was use of the premises in the circumstance that they were entered and subjected to the work of adaptation. I do not think, however, that it is this sort of user that is relevant when the court is considering whether a warehouse was in rateable occupation. There was no enjoyment of the value of the building as a warehouse. Indeed, I do not see how adaptation work differs in its significance from current repair or maintenance work carried out for the purpose of keeping the building safe against wind and weather. If all that was done to or in an empty building was that workmen went in to effect such current repairs, I should have thought it rather extravagant to suggest that it thereby became occupied in the rating sense. Again, it is not, in my opinion, a correct, or, at any rate, a conclusive, test to determine whether an occupation was beneficial to inquire whether it suited the owner to have the work in question done or whether such work was to his advantage. Except in very special circumstances, it is to be assumed that it would be. But you could say as much about maintenance work. It prevents a loss of value to the owner just as adaptation or improvement should lead to an increment of value. These considerations, however, do not suffice to show that the occupation, assuming the acts to have amounted to such, was itself "a thing of value" during the year.
Where there was no act of user of the warehouse for the business purpose for which it existed this requirement was not fulfilled. It will appear from what I have said why I take the view that the judgements of the Lord Ordinary and of the Second Division of the Court of Session do not proceed on what is altogether the correct principle. For the same reasons I do not think that the two sheriff court cases to which we were referred, Commercial Bank of Scotland v. Glasgow Corporation and Co-operative Permanent Building Society v. Pinkerton, were rightly decided. The principle applied is entirely intelligible, but it is not, in my opinion, in accord with the proper conception of occupation in rating law. The English decision which is closest to this case on its facts is Hackney Borough Council v. Metropolitan Asylums Board. It is, however, impossible to refer to that case as an authority on any matter of principle, owing to the extreme ambiguity of the judgement of the Divisional Court delivered by Lord Hewart C.J. The most that can perhaps be inferred, for what it is worth, is that the court seems to have inclined to the view that there would not be occupation of an empty building during the period when nothing more was done in it than execute works of adaptation and reconstruction. What makes the decision unsatisfactory is that it is impossible to see upon what principle the comparatively trivial other acts upon the premises were held by the court to turn what would or might not otherwise have been rateable occupation into such an occupation. I cannot see what their significance was and I should be surprised if anyone else can. I would allow the appeal.
Lord Cohen: My Lords, I agree.
Lord KEITH OF Avonholm: My Lords, I agree and have little further to add. I have some difficulty in following the approach made by their Lordships of the Second Division to the question in this case, and in particular, to understand why those of their Lordships who gave opinions thought it necessary to consider whether the alterations that were made were beneficial, or of value, to the appellants. These premises could not be entered in the valuation roll unless they were capable of beneficial occupation. The annual value which was put upon them in the roll was the measure of the value of that occupation; in other words, it was, under section 6 of the Lands Valuation (Scotland) Act, 1854, the rent which a hypothetical tenant might be expected to give for them in their actual state, taking one year with another. But for assessment to rates there must be occupation. If, therefore, there were rateable occupation of the premises, that annual value supplied the basis of assessment for occupiers' rates. The assessment in the present instance must have been on that footing. If the appellants were in occupation they were in beneficial enjoyment of the premises, and it does not really matter what use they were making of the premises. In Clyde Navigation Trustees v. Adamson the Clyde Navigation Trustees claimed that they were not in rateable occupation so as to be liable to be assessed to poor rates. This House and the Court of Session held that they were liable, and in the Court of Session it was pointed out that it was only the assessor under the Lands Valuation Acts who could fix the value of that occupation.
The question as I see it must always be: Was there such occupancy as would amount to enjoyment of the beneficial value of the subjects? The question in this case is whether the appellants were in rateable occupation during any part of the rating year 1957-58. If their Lordships of the Second Division entertained the view that the appellants were in actual occupation, then there was no need to go on and consider whether that occupation was beneficial. That had already been fixed by the value in the valuation roll. But I think they may have meant that mere entry on the premises to make the alterations in question - which they called use or possession of the premises - was not enough unless that use was of value. Beneficial use, in other words, was necessary for actual occupation. I do not know that I would cavil at that proposition in this case, but I do not think that what was done here was beneficial use of the premises. The alterations were the same kind of alterations that might have been done in other circumstances by a tenant of premises, or by an owner-occupier in undoubted occupation of premises, but these would not add to his beneficial use or enjoyment, unless they were of such a character as added to the value of the premises, in which case they would, no doubt, be reflected in an increased valuation in the valuation roll. In that case, his beneficial use would be in the enjoyment of the increased value, not in the mere making of the alterations. In the premises here in question there could be no possible benefit, or enjoyment, from the alterations until the next rating year. I can detect no difference between the law of Scotland and the law of England in the principles that affect rateable occupation, though the system by which rateable values are fixed may be somewhat different. The statute defines occupier as including any person "in the actual occupation" of land. It is difficult to know what significance was intended by the word "actual." The definition in the Act of 1947 is not new. It will be found in the Burgh Police (Scotland) Act, 1892. It may be intended to exclude the nominal occupation which may attach to an owner-occupier being entered, as I think is usual, in both the owner's and occupier's column of the valuation roll, irrespective of whether he is in actual occupation or not. But the point here is immaterial. The word "actual" cannot certainly weaken the criteria to be looked to in deciding whether there is rateable occupation. I cannot add to the views expressed in the speeches already delivered that nothing points here to actual occupation of the premises in question. I agree that the appeal should be allowed.
Appeal allowed.
English, Scottish & Australian Bank Ltd v Dyer 1958
Ratford & Hayward(Receivers & managers of Sabre Tooling Ltd. Northavon DC 1986
RATFORD AND ANOTHER V. NORTHAVON D.C. (CA)
References: [1987] QB 357
Court of Appeal
SLADE LJ This is an appeal by Mr. W. F. Ratford and Mr. C. T. E. Hayward ("the receivers") pursuant to the leave of the judge from a judgment of Kennedy J. delivered on 14 May 1985. By that judgment he dismissed an appeal by the receivers by way of case stated from a decision of the justices for the county of Avon in respect of their adjudication as a magistrates' court sitting at Thornbury on 22 November 1983. The complaint which the justices had considered was one preferred on 21 July 1983 by the respondents to this appeal, the Northavon District Council ("the council") against the receivers, who at the material time had been appointed and were acting as receivers and managers of the property of Sabre Tooling Ltd. ("the company"), a company whose premises were within the area of the council. The complaint alleged that the receivers, being duly rated and assessed on a rate made on 28 February 1983, had not paid the sum due, the property in question being certain premises at unit 21, Cooper Road, Thornbury Industrial Estate, Thornbury, Bristol ("the premises"). The justices found the complaint was well founded. Kennedy J. upheld their decision. The receivers seek to challenge both decisions.
The sums at stake are quite small. However, the council apparently regards this appeal as raising important questions of principle concerning the onus of proof in cases where a person has been required, pursuant to section 97(1) of the General Rate Act 1967, to show why he has not paid a rate specified in a complaint. On the other hand, the receivers, who are two partners in a firm of accountants, apparently regard the appeal as raising no less important questions of principle as to the nature and extent of the personal liability of a receiver, appointed by a debenture holder, for rates in respect of land belonging to a company.
The history of the matter is as follows. On 24 November 1977 the company executed a debenture in favour of Lloyds Bank Ltd. ("the bank") by which (clause 3) it granted a charge over its property present and future. By clause 7 the bank was empowered at any time after it should have demanded payment of any money or liability thereby secured to appoint any persons to be receivers of the premises charged. Clause 7 further provided that any receiver(s) so appointed should have power, inter alia:
"(a) To take possession of... any property hereby charged... (b) To carry on, manage or concur in carrying on and managing the business of the company or any part thereof... (h) To do all such other acts and things as may be considered to be incidental or conducive to any of the matters or powers aforesaid and which he or they lawfully may or can do as agent or agents for the company."
After directions relating to the application of moneys received by such receiver(s), clause 7 finally provided:
"Any receiver or receivers so appointed shall be deemed to be the agent or agents of the company and the company shall be solely responsible for his or their acts or defaults and for his or their remuneration."
On 28 February 1983 the council made the rate in question and duly published it the following week. The rate was due on 1 April 1983. The council initially addressed a demand for payment to the company.
However, on 5 April 1983 the bank executed an appointment by which, in exercise of the powers conferred on it by the debenture, it appointed the receivers
"to be receivers and managers of the premises charged by the debenture..."
The appointment, after defining the receivers' powers, provided:
"and so that the said receivers so appointed shall without prejudice to the extent of... their said powers be deemed to be the agents of the company... which alone shall be responsible for their defaults."
On 6 April 1983 Mr. Ratford wrote a letter to the council telling them of the appointment of the receivers. This letter was in the same form as letters addressed to other persons who had had dealings with the company. In the third paragraph of this letter he said:
"it is my intention to permit the company to continue to operate its business with a view to trying to achieve a sale of the whole or part thereof..."
In the fourth paragraph he said:
"I must advise you that in respect of any orders placed by or on behalf of the company my personal liability thereunder will be limited to the value of the assets within my control for the time being..."
As the justices found, the council received this letter on 11 April 1983, and in reliance on their officers, formed the view that there had been a change in the rateable occupiers of the premises on 5 April 1983 when the receivers were appointed. On 23 May 1983 the receivers were entered on the council's rating records as being occupiers of the premises as from 5 April 1983. On 2 June 1983 the council sent out an apportioned account for £37.22 in the name of the company made up to 4 April 1983 and, in addition, a demand for the rates due from 5 April 1983 to 31 March 1984, addressed to the receivers personally. Under section 16 of the General Rate Act 1967 the liability to be assessed for rates in respect of a hereditament falls upon "every occupier" thereof, whoever he may be. Section 96 of the Act, so far as material, provides:
"(1)... if any person fails to pay any sum legally assessed on and due from him in respect of a rate for seven days after it has been legally demanded of him, the payment of that sum may... be enforced by distress... under warrant issued by a magistrates' court;..."
Section 97(1), so far as material, provides:
"The proceedings for the issue of a warrant of distress... may be instituted by making complaint before a justice of the peace and applying for a summons requiring the person named in the complaint to appear before a magistrates' court to show why he has not paid the rate specified in the complaint."
No payment having been made, the council on 21 July 1983 preferred a complaint against the receivers asserting that they, being persons duly rated and assessed in the general rate in question, had not paid it.
On 22 September 1983, at the instance of the receivers, the company's leasehold premises were sold.
It is common ground that if the receivers are liable, their liability extends in respect of the period from 5 April to 22 September 1983 and that the sum in question is £1,591.26. Prior to the hearing before the justices, a statement of facts was agreed between the parties which embodied the following facts:
"(a) that the [receivers] had representatives on the [property] from time to time during their receivership; (b) that the [receivers] managed the business of the company during their receivership; (c) that the [receivers] authorised payments of various outgoings during their receivership e.g. electricity bills, rent, wages; (d) that the company at the direction of the [receivers] disposed of the company's assets, including eventually the leasehold interest in the [property]; and (e) that during the receivership, the [receivers] had control of those of the company's assets covered by the debenture."
At the first hearing before the justices on 1 November 1983 the council proved that the rate was duly made and published, that it had been duly apportioned in accordance with section 18 of the Act of 1967, and that the apportioned rate had been duly demanded of the receivers and not paid. In these circumstances the council submitted that they had established a prima facie case against the receivers that they were the rateable occupiers and that the onus of proof lay on the receivers to show that they were not liable to pay the rates. The justices accepted this submission and held that the onus was upon the receivers to show that they were not liable.
At the resumed hearing on 22 November 1983 the receivers submitted that, on the basis of the evidence contained in the agreed statement facts and the relevant documents (namely the debenture, appointment and letter of 6 April 1983), the receivers never entered into rateable occupation of the premises. The justices held:
"9. After consideration of submissions and evidence we found as a matter of fact that the receivers were the occupiers of the rateable property: and that they had undertaken the liabilities of [the company] and were thereby responsible for the rates demanded. We were not shown and could not find any authority in law why the receivers in this case could escape liability which we found was theirs and accordingly we ordered the issue of the distress warrant."
On the application of the receivers' solicitors, the justices then stated a case which raised the following questions for the decision of the High Court:
"(i) whether the onus of proof lay with the [receivers] in the circumstances established by the evidence; (ii) whether the receivers were 'occupiers' for the purpose of rating within the meaning of the [Act]; (iii) whether, having regard to sections 94 and 319 of the Companies Act 1948 the justices were in the circumstances established by the evidence entitled to issue a warrant to levy distress."
Kennedy J. dismissed the receivers' appeal, answering questions (i) and (ii) in the affirmative, and accordingly found it unnecessary to answer question (iii). As to the onus of proof, he said:
"In the context of the present case, I am satisfied that once the [council] received notice of the appointment of the receivers and managers in the letter from Mr. Ratford dated 6 April 1983 there was prima facie evidence that the receivers and managers had become the rateable occupiers and it was then for them to show that in fact no change of rateable occupation had taken place."
The judge then considered the evidence on which the receivers relied in order to show that they were not in rateable occupation. He said:
"First, there was the debenture and the deed of appointment, but they were equivocal. The debenture clearly contained a power to take possession but neither it nor the deed of appointment said anything as to whether or not in the instant case the power should be exercised."
He then referred to the facts set out in the agreed statement of facts and continued:
"The [receivers] chose not to give evidence, and no evidence was called on their behalf, so in my judgment it is not surprising that the justices found that the [receivers] had failed to show that they were not in rateable occupation. Even if the onus of proof had been the other way round it seems to me that the justices might well have come to the same conclusion as to who was the rateable occupier at the material time."
Finally, he concluded that there was no legal barrier to the justices making the finding of fact which he considered open to them on the evidence.
Burden of proof
It is perhaps a fair summary of the ratio of the decisions both of the justices and of Kennedy J. that (i) they regarded the onus of proof as falling throughout all the proceedings on the receivers to show that they were not in rateable occupation of the premises; and (ii) they considered that the receivers had not discharged this onus on the available evidence. The onus of proof is therefore of importance in the present context. Mr. Lightman, on behalf of the receivers, submits that this was an erroneous approach. In his submission the provisions of section 97(1) of the General Rate Act 1967, pursuant to which the person named in the complaint is required to show "why he has not paid the rate specified in the complaint" do not shift the burden of proof on that issue to that party; all they do is to call upon him to show reasonable grounds (supported, if he wishes, by evidence) why he denies that he is the rateable occupier. Subject only to the person showing such reasonable grounds, the burden of proof, Mr. Lightman submits, rests on the complainant seeking the order. He has reminded us of the use of a similar formula, as he submits with like effect, in various provisions of the Rules of the Supreme Court: Ord. 14, r. 4, Ord. 63, r. 8(2) and Ord. 50, r. 1.
On behalf of the council, Mr. Cochrane began by making submissions as to the statutory purpose of section 97(1). A rating authority, having sent out its demands for rates, may find that thousands of them remain unsatisfied. It has no right to sue for them as civil debts. It can only recover them by means of distress. It may have little or no knowledge of the actual occupation of the property in question. It has no power to call for documents or information. He accepts that a complaint can only properly be issued against persons who are prima facie liable to rates in respect of the property, because they are known or appear to be in occupation of it. Subject only to this, however, he submits that, at the hearing of a summons before the justices of a complaint under section 97(1), all the rating authority has to show is that the rate in question has been duly made and published, that it has been demanded from the respondent and that it has not been paid; once these things have been shown, the onus falls fairly and squarely on the respondent to show why he should not be treated as being in rateable occupation of the premises. Any other construction, in Mr. Cochrane's submission, would defeat the purpose of the subsection, which was clearly intended to provide a simple and speedy method for the collection of rates.
I turn to consider the principal authorities which have been cited to us concerning this question of onus. In Des Salles d'Epinoix v. Kensington and Chelsea (Royal) London Borough Council [1970] 1 WLR 179, the Divisional Court held that the appellant was liable to rates for the year 1967-68 in respect of his former matrimonial home which he had left in November 1966. Lord Parker C.J., at p. 182E, pointed out that a man may remain in rateable occupation through deriving a beneficial use the premises if the result is that his obligations to maintain are pro tanto discharged. He expressed his conclusion thus, at pp. 182-183:
"Here one starts with this, that ever since 1946 this appellant has been on the valuation list as the rateable occupier. No steps have been taken by him since 9 November 1966, when he left the matrimonial home, to have his name removed from the valuation list. In addition, as I have said, when served with a summons for a distress warrant in respect of the 1967-68 rates, he never appeared to defend. In those circumstances it seems to me that a rating authority, which can know nothing of the exact circumstances as between husband and wife, has really no choice open to it but to proceed against the husband, who throughout, as far as it knows, has remained the rateable occupier. It seems to me that then there must be a shifting of the burden of proof on general principles, because the only party to the proceedings who can know what the exact position is, is the husband, and it seems to me that the burden then is upon him to show that he has in fact ceased to be the rateable occupier. Not only do I think that that is true on general principles, but when one looks at section 97(1) of the General Rate Act 1967, it would suggest that there is this shifting of burden, because that subsection provides:... That, as I read it, contemplates that assuming that there is prima facie evidence that he is the rateable occupier, as there clearly was in this case, it is for him then to appear and show for one reason or another why he has not paid. One reason which he could put forward is that he had ceased to be the rateable occupier."
Lord Parker C.J. said that looked at in that way it was clear that the appellant has not discharged the burden on him and on that ground the court dismissed the appeal.
The Divisional Court followed and applied Des Salles d'Epinoix v. Kensington and Chelsea (Royal) London Borough Council in Lister v. Reigate Borough Council (1969) 15 R.R.C. 323 and Bromley London Borough v. Brooks (1973) 17 R.R.C. 197. In Forsythe v. Rawlinson (1980) 21 R.v..R. 97, the Divisional Court had to consider an appeal against a decision of magistrates who had authorised the issue of a distress warrant for rates in respect of a Sunday market at Bovingdon Aerodrome. The only other possible candidate for the position of rateable occupier was a company called Waterloo Galleries Ltd. The magistrates had made a number of findings of fact. The rates in question had been properly made and published. A demand for them had been served on the appellant. Part of the aerodrome had been used as a regular Sunday market. The person organising the market on the occasions when the council officers attended was the appellant. The appellant was the only person in authority with whom the council officials had had any contact in regard to the market in the context of a planning application. At no stage had the appellant told council officers that he was an agent, servant or officer of Waterloo Galleries Ltd. Though, as Donaldson LJ pointed out, this was a question of mixed fact and law, the magistrates had also found that the appellant in his activities at the market was acting for himself and not as an agent, servant or officer of Waterloo Galleries Ltd. Evidence was given to the magistrates which tended to support the finding that the only natural person appearing to occupy the market was the appellant. On that, the rating authority held that it was for the appellant to show cause why he was not the rateable occupier. The appellant declined to give evidence and submitted that no case had been made out showing that he had been lawfully assessed and was liable. The magistrates having overruled that submission, the appellant appealed to the Divisional Court. Donaldson LJ, with whose judgment Mustill J. agreed, referred to the provisions of section 97(1) of the Act, and continued, at p. 98:
"Counsel for the respondent said that that section puts the burden on the person summoned to show cause why he should not pay the rate. So put, I regard the submission as frightening and the section, if properly so construed, as wholly oppressive, but I do not think it is to be so construed."
Donaldson LJ then referred to the decision in Des Salles d'Epinoix v. Kensington and Chelsea (Royal) London Borough Council [1970] 1 WLR 179, from which he cited the passage from the judgment of Lord Parker C.J. dealing with the construction of section 97(1) quoted earlier in this judgment. He continued:
"The section so construed is more limited in effect. It means that the rating authority is only entitled to issue a complaint against people who are within the category of those who may prima facie be liable for the rates. In a husband and wife situation a prima facie case can usually be mounted against the wife because she is in actual occupation, and against the husband because he is the husband and because, as often is the case, his name appears on the rating list. I see no reason why there should not be prima facie cases against more than one person in the husband and wife field. If the local authority issues proceedings against somebody who is in that category, then I think section 97 itself reverses the burden of proof initially leaving the person complained against to show cause why a distress warrant should not be issued. But like all cases of the burden of proof in litigation, it is a swinging burden. It may be that the person concerned need at first do little more than say 'I am not the rateable occupier' and then leave it to the rating authority to put the burden of proof back on to him."
Donaldson LJ proceeded to point out that there were only two possible rateable occupiers, namely the appellant and Waterloo Galleries Ltd. He concluded:
"For my part, it seems to me that either could be the rateable occupier, and that to that extent the appellant is within the category of person who prima facie is liable and to whom section 97(1) does apply. I say that either could be liable because the appellant might have been the alter ego or the servant or agent of Waterloo Galleries. In all those cases it would have been Waterloo Galleries who would be liable. On the other hand, he might himself have been running the market, in which case he would have been the occupier for rating purposes and he would have been liable. The information, as in the case of a husband and wife, is exclusively within his knowledge rather than that of the rating authority, and indeed the confidentiality between [sic] communication between a man and his company is much closer than that between husband and wife, since there is no chance of the company revealing the conversations which took place without the permission of the person concerned. In all the circumstances it seems to me that there was a case for the appellant to answer, even if his answer initially might have been extremely brief. But he did not choose to give any answer at all. In those circumstances I do not think it is possible to say that the magistrates were wrong..."
In Verrall v. Hackney London Borough Council [1983] QB 445 this court had to consider whether a distress warrant had been properly issued to recover rates in respect of certain premises of which the rating authority asserted that an unincorporated association, the National Front, were in paramount occupation. The appellant was alleged to be a prominent member of that association. The magistrates had found that the rate had been properly made and demanded and all the necessary formalities had been complied with, that the demand for the rates had been addressed to the appellant and that the amount in question remained owing. May LJ, delivering the judgment of the court, said, at p. 459:
"These matters having been proved, in our opinion as a matter of law it was then for the defendant to show sufficient cause for not having paid the sum demanded. This we think is clear from the wording of section 97(1) of the Act and of the forms in Schedule 12 which are referred to in section 97(2)."
However, May LJ, overruling certain earlier authorities, had held, at p. 458, that a defence of non-occupation is capable of being raised in answer to proceedings for a distress warrant under section 97(1). He said, at p. 459:
"In the event the defendant neither gave evidence himself nor called any witness to do so on the hearing before the magistrate. A number of agreed documents were put in during the opening of the case by counsel for the rating authority and a number of witnesses called on its behalf were cross-examined by counsel for the defendant. It was on this material that the defendant contended that he had been entitled not to pay the rates because he had not been the occupier of the relevant premises for the material period."
The Court of Appeal upheld this contention and allowed the defendant's appeal. On the basis of these authorities and on general principle, I would derive the following propositions of law as to the burden of proof in rating cases:
(1) A rating authority will not be justified in applying for a summons against a person under section 97(1) of the Act if it has no reasonable grounds for believing that he is or may be in rateable occupation of the premises in question; if it were to decide to apply for a summons in such circumstances, its decision would be open to judicial review. This I infer is what Donaldson LJ had in mind in saying in Forsythe v. Rawlinson, 21 R.v..R. 97, 98, that
"the rating authority is only entitled to issue a complaint against people who are within the category of those who may prima facie be liable for the rates."
Thus, though for present purposes I find it unnecessary to express any concluded view on this point, it may be that section 97(1) must be read subject to the implicit qualification that it would place no onus on a person who received a summons which so far lacked any reasonable basis that the decision to issue it could be successfully attacked on Wednesbury grounds: see Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B. 223. This, I infer, is what Lord Parker C.J. may have had in mind in Des Salles d'Epinoix v. Kensington and Chelsea (Royal) London Borough Council [1970] 1 WLR 179, 183B, in saying that section 97(1) contemplates that:
"assuming that there is prima facie evidence that he is the rateable occupier... it is for him then to appear and show for one reason or another why he has not paid."
(2) Even if this implicit qualification to section 97(1) exists, it can, in my opinion, only apply in a case where on the facts known to the rating authority the person named in the complaint could not have been reasonably regarded by the authority as a reasonably possible candidate for the position of rateable occupier.
(3) Subject to (1) and (2) above, at the hearing of a summons under section 97(1) all the rating authority has to show in the first instance is that (a) the rate in question has been duly made and published; (b) it has been duly demanded from the respondent, and (c) it has not been paid. If these three things are shown, the burden then falls on the respondent to show sufficient cause for not having paid the sum demanded: seeVerrall v. Hackney Borough Council [1983] 445 QB; [1983] 2 WLR 202; [1983] 1 All ER 277, CA,per May LJ The question whether a person who appears to be in occupation of a particular property is in actual occupation of it will be peculiarly within his knowledge. It seems to me probable that the legislature, in enacting section 97(1), would have contemplated that the burden of proving a defence based on non-occupation of the property would in the first instance fall on the respondent.
(4) However, the standard of proof will be merely that of the balance of probabilities, and in Donaldson LJ's words in Forsythe v. Rawlinson, 21 R.v..R. 97, 98,"like all cases of the burden of proof in litigation, it is a swinging burden." As the evidence of varying weight develops before the magistrates, the eventual burden of proof will, in accordance with ordinary principles of evidence, remain with or shift to the person who will fail without further evidence: see, for example, Halsbury's Laws of England, 4th ed., vol. 17 (1976), p. 13, para. 15.
Mr. Lightman submitted that the judge erred in holding that once the council received notice of the appointment of the receivers as receivers and managers in the letter of 6 April 1983, the possessed "prima facie evidence that (the receivers) had become the rateable occupiers and that it was then for them to show that in fact no change of rateable occupation had taken place." He submitted - and I accept this submission on the basis of the authorities referred to later in this judgment - that neither the appointment of the receivers by the bank, pursuant to powers contained in the debenture, nor the taking over by the receivers, when appointed, of the management of the company's affairs, was necessarily sufficient to render the receivers rateable occupiers in the place of the company. However, as will also appear from the authorities referred to later in this judgment, the appointment of receivers by debenture holders, whether or not accompanied by an assumption of the management of the company's affairs, is in certain circumstances well capable of having this effect. As at 6 April 1983 the council knew that the rateable occupiers must be either the company or the receivers. Their decision to invoke the section 97 procedure against the receivers could not, in my opinion, have been successfully attacked on Wednesbury grounds; as I understand the facts, they did not learn of the actual terms of the debenture or of the appointment of the receivers until the proceedings before the magistrates had been instituted. In all the circumstances, at the hearing before the magistrates, the onus of proof, at least in the first instance, in my opinion fell on the receivers to show that no change of rateable occupation had taken place. The question whether the onus shifted in the course of the hearing is another matter. and I will revert to it. The authorities relating to the liability of a receiver for rates With certain important statutory qualifications which have no relevance for present purposes, a receiver appointed out of court by a debenture holder, in exercise of powers contained in the debenture granted by a company, in properly carrying out his functions, will ordinarily be under no personal liability. The reason is that, ordinarily, depending on the terms of his appointment, he will be acting simply as agent either for the debenture holder or for the company: see Kerr on Receivers, 16th ed. (1983), p. 259; Halsbury's Laws of England, 4th ed., vol. 39 (1982), p. 406, para. 805.
In the present case both the appointment and the debenture provided for the receiver to be deemed to be the agent of the company. Subsequently in this judgment I will from time to time refer to provisions of this nature as "usual agency provisions." I call them "usual," because I think that provisions providing for the receiver to act as the agent of the debenture holder, though permissible, are less commonly employed in practice.
It is a general principle of rating law that where an agent is required to occupy a hereditament in order to secure the better performance of his duties as agent, his occupation is for rating purposes ordinarily treated as that of his principal. If, on the other hand, an agent occupies his principal's property otherwise than in his capacity as agent, the occupation will be treated as his own for rating purposes: see Halsbury's Laws of England, 4th ed., vol. 39 (1982), pp. 19-20, para. 21. The agency of the receivers in the present case, like that of any other receiver, was one with peculiar incidents. For instance, the company could have not dismissed them; nor could it have given them directions as to how they should carry out their activities. Nevertheless, the agency was, in my opinion, a real one. This is shown by the dissenting judgment of Rigby LJ in Gaskell v. Gosling [1896] 1 QB 669, 685, which was upheld by the House of Lords [1897] A.C. 575. Rigby LJ referred to the common form of words providing for the receiver when appointed to be the agent of the company. He said, at p. 696:
"These words, unless their effect is in some way controlled, are decisive of the question whether... the trustees [for the debenture holders] became principals of the receiver. They are inserted for the very purpose of preventing such a result. As appears from the statement hereinbefore contained, they express the usual intention in cases where a receiver is appointed by a mortgagee."
Rigby LJ concluded, at p. 697:
"a receiver and manager appointed by a mortgagee under an agreement that he shall be the agent of the mortgagor is in the same position as if appointed by the mortgagor himself and as if every direction given to him emanated from the mortgagor himself..."
The editor of Kerr on Receivers, 16th ed. (1983), p. 271, likewise states that the agency of the receiver for the mortgagor is a real one and draws attention to the various consequent duties owed by him to the mortgagor. He points out, however, that the receiver remains agent of the mortgagor only so long as his appointment by the mortgagee is effective, so that he ceases to be such agent when that appointment is superseded by an order of the court.
The reality and relevance of the status of a receiver as agent for a company was recognised by a decision of the Australian High Court, albeit outside the field of rating, in Australian Mutual Provident Society v. Geo. Myers & Co. Ltd. (1931) 47 C.L.R. 65. A section of the (Queensland) Real Property Act 1861 gave a mortgagee a right to distrain on the goods and chattels of a mortgagor who was in "occupation" of the mortgaged land. The court held that the entry of a receiver for debenture holders appointed under a power which provided that he should be the agent of the company giving the debentures had not involved a change of possession from the company to the receiver, so that distress might still be levied on the company's goods and chattels. Dixon J. said, at p. 82:
"The question whether the receiver was in control of the company's premises in the exercise of an independent possession, or was merely in charge of the company's undertaking on its behalf so that the company continued in occupation, depends mainly upon the terms of the debenture deed, and perhaps to some extent upon the course actually taken by the liquidator. The considerations which should determine the effect in such a matter of debenture deeds are dealt with in the judgment of Rigby LJ in Gaskell v. Gosling [1896] 1 QB 669, 685, whose view was adopted in the House of Lords [1897] A.C. 575, and also in In re Marriage, Neave & Co. [1896] 2 Ch. 663. It is enough to say that, in my opinion, the true effect of the deed in this case was to render the receiver the agent of the company and to leave its occupation or possession of its property in point of law undisturbed by his entry and by his assumption of control."
Much must clearly depend on the terms of the receivers' appointment. However, further authority apart, I would expect that the receivers in the present case, having taken up their appointment as agents for the company, would not fall to be treated as being in rateable occupation of the company's premises unless, to use Dixon J.'s phrase, they were "in control of the company's premises in the exercise of an independent possession" or, in other words, occupied them otherwise than in their capacity as agents for the company, having dispossessed the company.
The authorities concerning rating law which have been cited to us, though not entirely clear or easy wholly to reconcile, in my opinion, support this view. In Richards v. Overseers of Kidderminster [1896] 2 Ch. 212, a deed of floating charge on the assets of a company gave power to the trustee for the debenture holders to appoint a receiver with power to take possession of the property charged and to carry on business. The deed also contained a usual agency provision and provided that the receiver should, as such agent, be deemed to be in exactly the same position as a receiver duly appointed by the mortgagee under the Conveyancing and Law of Property Act 1881. A receiver was in due course appointed and entered into possession of the property and began to carry on the business of the company. North J. held that a change of occupation for rating purposes occurred when the receiver entered into possession of the property. He said, at p. 220:
"The question, then, is what the construction of the deed is; and it is said that under the deed, as under the Act, the receiver was merely the agent of the mortgagor, and therefore the mortgagor continued in possession, and there was no change in possession. But in my opinion that contention is not sound. It is quite clear that the provisions of the deed do contemplate, in a particular event, and at a particular time, that there either may or shall be a change of possession, in which a receiver shall enter into possession and shall carry on the business of the company; and in my opinion the provision that the receiver is to be the agent for the mortgagor is not so strong as to stultify every other provision in the deed, which says that the possession of the company shall cease and shall become the possession of the receiver;... In my opinion, therefore, it is impossible to say that the change of possession which was clearly contemplated and required by the deed did not take place. It is not true to say that the company were in the occupation throughout, because the receiver on behalf of the trustee - trustee himself, if you like to say so, on behalf of the debenture holders - was the person from that time forward in possession."
The ratio of the decision of North J. was thus clearly based on the construction of the particular trust deed, pursuant to which the receiver was appointed. He considered that, on its true construction, it required that when the receiver entered into possession of the property, the possession should cease to be that of the company and should become that of the receiver and that this requirement overrode the provision that the receiver was to be the agent of the mortgagor. If North J.'s construction of the trust deed was correct, (as to which I need express no opinion), his ultimate decision was, in my opinion, a correct one. It could not have been said that in dispossessing the company, the receiver was acting as agent for the company. This would have been a contradiction in terms.
An important decision for present purposes is the decision of this court in In re Marriage, Neave & Co.[1896] 2 Ch. 663, because it illustrates that the mere fact that a receiver has entered upon a company's premises for the purpose of managing and carrying on its business, does not necessarily mean that he has dispossessed the company or that it has ceased to occupy the premises for rating purposes. In that case an order was made appointing a receiver and manager of a company's business, but not directing delivery up of possession to him. The receiver and manager then entered upon the company's premises for the purpose of managing and carrying on its business. The Court of Appeal held that there was no change of occupation for rating purposes. Lindley LJ said, at pp. 671-672:
"That order does not contain - and the omission is, to my mind, very important - any direction whatever for delivery up of possession of the land to those gentlemen; and moreover it does not appear from the affidavits that they have taken possession of the land in any sense at all. What they have done is this: they have gone on to the property for the purpose of receiving and managing the income and business of the company, but they have not done anything to change the ostensible possession of the property in any way whatever; and, upon the facts, it appears to me that the possession and occupation have not been changed at all. Mr. Levett argued that, inasmuch as corporations can only occupy by their agents, the appointment of a receiver by an order of the court is quite enough to create a change of possession. I do not take that view of the law. A corporation can possess and can occupy. The mere fact that a receiver is appointed by an order which does not in fact order the company to give up possession does not dispossess the company."
Lopes LJ said, at p. 674:
"It is said that, the receivers having been appointed, there was a change of occupation. It seems to me perfectly clear that that contention cannot be maintained, because, when the order is looked at, we find nothing in it which directs that possession of the land be given up to the receivers. What the receivers have to do is to go there and manage the property. The occupation, in my judgment, remained in the company in precisely the same way as it did before. The company continued to occupy notwithstanding that order."
Rigby LJ said, at p. 676:
"It is only where there is a change of occupation that that section has any operation. The argument that, because a receiver and manager is appointed, then ipso facto the company or persons carrying on business are turned out, is neither reasonable nor plausible. It is quite conceivable that these receivers might have performed all their duties without even seeing this property. They were to carry on the business: they could have appointed a manager of that business under them, to take his instructions from them. It might never be necessary for them to go near the property at all."
In National Provincial Bank of England v. United Electric Theatres (1915) 85 LJ Ch. 106, an order was made in a foreclosure action appointing a receiver and manager and directing the tenants of those properties which were let to attorn, and the mortgagors to deliver to the receiver as such receiver and manager, all the stock in trade and effects of the business. The order did not contain any direction for delivery up of possession of the land but the receiver subsequently stated that he had entered into possession. Astbury J., however, held that the receiver had not entered into rateable occupation of the premises. He said, at p. 112:
"I think it is quite plain that in these mortgage cases, either by contract between the parties or otherwise, there may be an appointment of a receiver under such circumstances that there is a change of possession within the meaning of the Rating Acts."
Astbury J. then referred to Richards v. Overseers of Kidderminster [1896] 2 Ch. 212, which he distinguished by reference to the particular provisions of the debenture trust deed in that case. He then referred to In re Marriage, Neave & Co. [1896] 2 Ch. 663 and to the passage from Lindley LJ's judgment, at pp. 671-672, which I have quoted. He concluded on this point, 85 LJ Ch. 106, 112:
"I think that substantially applies to the present case. It is quite true that the receiver here states that he entered into possession. But the real point is what was the quality of the possession that was so taken. I think he only took the possession that he was entitled to take under the order, and that there was no change of possession as was contemplated under the statutes in question."
In Gyton v. Palmour [1945] K.B. 426, the respondent had in February 1940 been appointed receiver and manager of the business of a company under a debenture trust deed. In March 1940 he was appointed receiver and manager of all the property of the company, except uncalled capital, by a High Court order, which did not contain any direction to the company to deliver up to the respondent possession of their property. The Divisional Court, at p. 432, found itself unable to distinguish the facts of In re Marriage, Neave & Co [1896] 2 Ch. 663 from those of the case before it. Viscount Caldecote C.J., however, in delivering the judgment of the court, added, at pp. 433-434:
"The nature of rateable occupation has been so frequently stated that it may seem unnecessary to repeat any of the statements which have been made, but in Westminster Council v. Southern Railway Co. [1936] A.C. 511, 529, there is a passage in the opinion of Lord Russell of Killowen, which will bear repetition: 'The occupier, not the land, is rateable; but the occupier is rateable in respect of the land which he occupies. Occupation, however, is not synonymous with legal possession: the owner of an empty house has the legal possession, but he is not in rateable occupation. Rateable occupation, however, must include actual possession and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation.' In the present case, whatever the nature of the possession into which the receiver and manager was put by the order of the court, it seems plain to us that it fell far short of the occupation which is necessary in order to constitute rateability."
The three decisions, In re Marriage, Neave & Co. [1896] 2 Ch. 663; National Provincial Bank of England v. United Electric Theatres, 85 LJ Ch. 106 and Cyton v. Palmour [1945] K.B. 426, though they concerned appointments of receivers by the court and did not depend on the agency point, supported the receivers' case on the present appeal, so far as they go. For they all clearly show that the mere fact that a receiver has entered upon the company's premises for the purpose of managing and carrying on its business does not necessarily mean that the company has been dispossessed or has ceased to occupy the premises for rating purposes. If it is to be shown that a change of rateable occupation has occurred, this conclusion must be derived from the terms of the receiver's appointment or from what he has actually done, or from both together.
Two decisions relied on by Mr. Cochrane on behalf of the council suggest that, notwithstanding the existence of an agency clause in the debenture pursuant to which the receiver is appointed, a receiver appointed out of court may conduct himself in such a manner as to dispossess the company and thus render himself in rateable occupation of the property. One of these cases was Taggs Island Casino Hotel Ltd. v. Richmond-upon-Thames London Borough Council (1966) 14 R.R.C. 119. The case was a rather special one, not only because it was an interlocutory decision, but also because the receiver (in whose interest it was so to state on the particular facts) had deposed in an uncontroverted affidavit that he had taken possession of the company's premises (a hotel) after his appointment. The debenture pursuant to which he was appointed contained a usual agency provision. Ungoed-Thomas J. reached the provisional view that on the evidence the receiver's possession had been full occupation of the premises for rating purposes, notwithstanding this provision. He thought it "highly arguable" (see p. 125) that the provision did not have the effect of the receiver being in possession as agent for the company. By way of support to this conclusion he referred to certain observations of Viscount Caldecote C.J. in Meigh v. Wickenden [1942] 2 K.B. 160, on the facts of which, notwithstanding the existence of an agency clause, the Divisional Court held a receiver to have been in "occupation" of certain premises for the purpose of the Factories Act 1937 so as to impose liability on him under that Act.
In Banister v. Islington London Borough Council (1972) 71 L.G.R. 239, the question arose whether a receiver was "entitled to possession" of certain unoccupied factory premises, within the meaning of the definition of "owner" in paragraph 15 of Schedule 1 to the General Rate Act 1967, and as such liable to be rated under paragraph 1 of Schedule 1. The debenture in question empowered the receiver to take possession of the property charged and provided that he should be the agent of the company. Following his appointment he undoubtedly went into actual possession: per Lord Widgery C.J., at p. 243. An argument, however, was advanced on behalf of the appellant (see p. 244) to the effect that although he was entitled to possession, he was entitled to possession solely qua agent of the company and was thus exempt from liability to be rated. Lord Widgery C.J. referred to Taggs Island Casino Hotel Ltd. v. Richmond-upon-Thames London Borough Council, 14 R.R.C. 119and Richards v. Overseers of Kidderminster [1896] 2 Ch. 212 as illustrating what the position was in regard to receivers under the old law before the provisions for unoccupied premises came into force. He was satisfied by the latter decision that under the old law a usual agency provision governing the receiver's appointment constituted no obstacle to a receiver who actually put himself into rateable occupation from being chargeable as such. He saw no reason "why the plain words of Schedule 1 to the General Rate Act 1967 should not have the same effect": see p. 246.
The present case
On the basis of the decisions in Richards v. Overseers of Kidderminster [1896] 2 Ch. 212, Taggs Island Casino Hotel Ltd. v. Richmond-upon-Thames London Borough Council, 14 R.R.C. 119, Banister v. Islington London Borough Council, 71 L.G.R. 239 and Meigh v. Wickenden [1942] 2 K.B. 160, Mr. Cochrane, on behalf of the council, submitted there is no rule of law that a receiver appointed by debenture holders may not be in rateable occupation of the company's premises and that the usual agency provision does not necessarily prevent him from being in occupation for rating purposes. I accept both these submissions.
He further pointed out, correctly in my opinion, that there cannot be two separate occupiers for rating purposes at one time of one hereditament: see, for example, In Southwark London Borough Council v. Briant Colour Printing Co. Ltd. [1977] 3 All ER 968, [1977] 1 WLR 942, 20 RRC 133, 75 LGR 768, 142 JP 1, [1977] RA 101, 244 EG 379, [1977] EGD 710 per Buckley LJ If there are two persons (such as the company and the receivers in the present case) each of whom is making concurrent use of the hereditament, "it may be necessary to discover which of them has the paramount position so as to be rateable as the occupier": see p. 953B. Mr. Cochrane reminded us of what was said by Lord Herschell LC in Holywell Union Assessment Committee v. Halkyn District Mines Drainage Co. [1895] A.C. 117, 125:
"The question whether a person is an occupier or not within the rating law is a question of fact and does not depend upon legal title."
In Mr. Cochrane's submission, the question whether or not the receivers in the present case, having power to take possession and go into occupation, did go into rateable occupation of the premises, is essentially a question of fact. He submitted that there are no grounds for holding that the justices, in finding as a fact that the receivers were the occupiers of the property, erred in law or misdirected themselves or that the judge erred in upholding their decision. I find myself unable to accept this last submission, for reasons which, after the lengthy review of the authorities contained earlier in this judgment, may now be shortly stated:
(1) I respectfully agree with the justices and with the judge that the council, on receiving the letter of 6 April 1983, were justified in applying for a summons against the receivers under section 97(1) of the Act of 1967. The contents of this letter gave them reasonable grounds for believing that the receivers might be in rateable occupation of the premises, since they were within the category of those who might prima facie be liable. As appears from the authorities cited above, it is possible for a receiver to be appointed on terms which involve a change of rateable occupation: see for example, National Provincial Bank of England v. United Electric Theatres, 85 LJ Ch. 106, 112, per Astbury J.
(2) At the first hearing before the justices, the council having shown that the rate in question had been duly made and published, that it had been duly demanded from the receivers and that it had not been paid, the burden fell in the first instance on the receivers to show sufficient cause for not having paid the sum demanded.
(3) In my judgment, however, the receivers prima facie discharged this burden by showing that they had been appointed on terms which, though empowering them to take possession of the company's premises and to carry on and manage its business, did not oblige them to take possession and further provided that in carrying out their activities they should be deemed to be the agents of the company.
(4) This much having been shown, the onus, in my opinion, shifted to the council to show that the receivers had dispossessed the company, or, to put it another way, to show that the quality of any possession of the premises which the receivers might have enjoyed was not that of mere agents. For possession held by a person in his capacity as agent is in law the possession of his principal.
(5) The agreed statement of facts placed before the justices did no more than show that the receivers had had representatives on the property from time to time during their receivership, that they had managed the company's business and authorised the payment of various outgoings, that the company had at their direction disposed of the company's assets, including, eventually, the leasehold interest in the premises, and that during the receivership they had had control of those of the company's assets covered by the debenture. However, in my opinion, the decisions in In re Marriage, Neave & Co. [1896] 2 Ch. 663 (a decision of this court) and in National Provincial Bank of England v. United Electric Theatres, 85 LJ Ch. 106 and in Gyton v. Palmour [1945] K.B. 426 show that these facts are quite consistent with the company remaining in legal possession and rateable occupation of the premises.
In my opinion, therefore, there was no sufficient evidence before the justices to justify a finding that the receivers had dispossessed the company, which had unquestionably been in possession and rateable occupation of the premises up to the date of their appointment.
The justices appear to have arrived at the conclusion expressed in paragraph 9 of their decision from the presumption that the receivers by virtue of their appointment had assumed personal liability in general for the liabilities of the company, and in particular for the rates payable in respect of the premises. Having regard to the terms of the appointment of the receivers, no such presumptions, in my opinion, arose, save in so far as statute (e.g. the Companies Acts) imposed them. No reliance has been placed on statute in argument before us. With respect to all concerned, I think that, as is submitted in the notice of appeal, the judge ought to have held that the justices reached their conclusion set out in paragraph 9 of their decision by a process of reasoning which was wrong in law in that they failed to state that the acts of the receivers referred to in the case stated were in law the acts of the company, they wrongly held that the receivers had undertaken the liabilities of the company, and erred in stating that there was no authority in law why the receivers could escape liability for the rates. On the authorities the position is, in my opinion, rather the reverse. Save for those cases such as Richards v. Overseers of Kidderminster [1896] 2 Ch. 212 ,where the terms of the receiver's appointment have effected or required dispossession of the company, I think that no case has been cited to us in which a receiver has ever been held to be in rateable occupation of occupied premises. The reason, I infer, is not far to seek. Any occupation of the relevant premises enjoyed by a receiver will normally be enjoyed by him solely in his capacity as agent for some other party. Though it is possible for him to take independent possession of the premises as principal, such cases, I suspect, may be comparatively rare.
Mr. Lightman, on behalf of the receivers, submitted that the agreed facts in this case did not indicate or establish any action on the part of the receivers in relation to the premises beyond management of the company's business and control of its assets, as in any typical receivership where the receiver decides to continue the business as a going concern. I accept this submission. The terms of the receiver's appointment having been put in evidence, and the statement of facts having been agreed, it was not, in my opinion, incumbent on the receivers to give oral evidence. I respectfully differ from the judge's view that inferences adverse to the receivers can be drawn from their failure to do so. For the reasons given, I would allow this appeal and would answer questions (i) and (ii) in paragraph 10 of the case stated in the negative. We have not been invited to consider question (iii).
RALPH GIBSON LJI agree.
SIR JOHN Megaw.I agree.
Stringer (VO) v J Sainsbury PLC & Others 1991 Blake v Hendon (No 2) 1965
BLAKE VO V. HENDON CORPORATION
References: [1962] 1 QB 283. [1961] 3 All ER 601, 8 RRC 356, [1961] RVR 552, CA
COURT OF APPEAL
DEVLIN L.J.delivered the following written judgement of the court. The question in this case is whether Stonegrove Park, a public park owned by the Hendon Corporation, should be entered in the valuation list as exempt from payment of rates. The general principle that governs this point is not in dispute. Rateability depends upon beneficial occupation by some legal entity, an individual or corporation. If the corporation are merely custodians and trustees of the park for the benefit of the public there is no beneficial occupation by them and occupation by the public is not rateable. If the corporation has the full ownership of the park, beneficial as well as legal, and the public are admitted not as beneficiaries but as licensees, the park is in law occupied by the corporation, who must pay rates accordingly. A highway is the obvious example of land which cannot be said to be occupied at all unless by the public; a decision that Putney Bridge was not rateable started this branch of rating law [Hare v. Overseers of Putney]. In the cases that have followed public parks have generally been treated as highways; but other premises enjoyed by the public, such as libraries and art galleries owned by local authorities, have generally been treated as places occupied by local authorities to which members of the public are admitted as licensees.
The leading case in this branch of the law is Lambeth Overseers v. London County Council (the Brockwell Park case). Brockwell Park was acquired by the London County Council under the terms of a special Act which authorised them to buy it and hold it as a park and lay out, maintain and preserve it as a park for the perpetual use thereof by the public for exercise and recreation. Lord Halsbury LC described the London County Council as "merely custodians and trustees for the public ... they must allow the public the free and unrestricted use of it." Lord Herschell described the. land as by statute dedicated to the public use. This principle was applied in Liverpool Corporation v. West Derby Assessment Committee, where the land was acquired under the Liverpool Improvement Act, 1865, s.14, which enabled the corporation to buy any lands "which they may think suitable for public parks or playgrounds, and places of recreation for the inhabitants of the borough, and may from time to time, as they think fit, lay out and appropriate the same. ..."
The principle was also applied in Sheffield Corporation v. Tranter where the land was acquired under section 164 of the Act of 1875, the section we have to consider. In these and other similar cases consideration was given by the courts to statutory powers which from time to time had been granted to local authorities owning and managing parks, and which might be thought to enable them to interfere with "the free and unrestricted use" by the public. In these cases it was contended that such powers inhibited the local authority from dedicating the park to the use of the public, with the result that they remained themselves as occupiers. So far such contentions have not succeeded. In Liverpool Corporation v. West Derby Assessment Committee this court had to consider the statutory power to sell and let land acquired as suitable for public parks and subsequently not required for that purpose; and also a power under by-laws to close the park for up to seven days in any one year and to charge admission on such days.
In Burnell v. Downham Market Urban District Council, a similar case in which land was acquired under the Open Spaces Act, 1906, the local authority had agreed to allow private clubs in return for payment to use cricket and football pitches on certain days. Lord Evershed MR, giving the judgement of the court, said that this was not an interference with "free and unrestricted use"; and that the tribunal was entitled to conclude as a matter of fact that the arrangements made by the council with the private clubs were ancillary to their management of the field as an open space. The same test was applied in Sheffield Corporation v. Tranter, where the local authority let out a refreshment pavilion to a caterer at an annual rental: Lord Evershed MR said that the tribunal was "justified on the facts in finding that Dale's [the tenant's] conduct of this refreshment pavilion was ... nothing more than an ancillary activity of the conduct of the park itself."
Sir Derek Walker-Smith, for the respondent, the valuation officer, contends that Stonegrove Park is not exempt, and he begins his argument by inviting us to recognise a fundamental distinction between the terms of section 164 of the Public Health Act, 1875, and those of the special Act in the Brockwell Park case, which we have summarised above. In the latter case, he submits, the local authority had no alternative except to "dedicate" the land to the public. In the present case and under section 164 they have a choice. Sir Derek does not suggest - the contrary is well settled - that without express statutory authority the local authority could use land acquired under section 164 for any purpose other than that permitted by the section, that is as public walks or pleasure grounds. But, he submits, this purpose could be effected in one of two ways. A local authority can either dedicate the land to the public, thus making them the beneficial occupiers and reserving for itself only the power of management and control, or it can retain the right to occupation, admitting the public as licensees, as in the case of a library or public gallery. From this distinction two consequences are said to follow.
The first and less important is that exemption cannot arise until the act of dedication is established as a fact. Sir Derek submits that there is no sufficient finding of fact in the case stated by the Lands Tribunal. It seems clear that the corporation intended to dedicate the land, and it is their case that they in fact did so by the opening of the park on July 21, 1934. The point is not of great importance; for if the valuation officer succeeded upon it alone, the corporation could before the next valuation list put the matter right by making some formal act of dedication and thereby supplementing any legal defects there may have been in the mayoress's opening speech. For reasons which we shall give below we do not think that any formal act is necessary. The second and more important consequence depends on a further development of Sir Derek's argument. While section 164, taken by itself, gives the local authority a choice, there are, he argues, other provisions in other statutes which by their effect on section 164 destroy the right of choice, deprive the local authority of the power to dedicate and compel it willy-nilly to retain the right to occupy. The chief, if not the sole, provision relied upon by Sir Derek as having this effect is section 164 of the Local Government Act, 1933. This permits a local authority to let any land which they may possess with the consent of the Minister, for any term; and without the consent of the Minister, for a term not exceeding seven years. (It is an odd mischance that the two sections to which we have to give the closest consideration are both numbered 164. I shall refer to them respectively as section 164 of 1875 and section 164 of 1933.)
Sir Derek submits that under section 164 of 1933 the power of a local authority to let land is quite unrestricted; Hendon Corporation could, and still can, let Stonegrove Park to anyone for any purpose, thus excluding the public from their enjoyment of the park. But they could not do that if the park were land belonging to the public, who had the beneficial ownership of it. Thus the power to let under section 164 of 1933 is, according to this submission, inconsistent with the power to dedicate under section 164 of 1875. Sir Derek argues that, following the well-known line of cases beginning with Ayr Harbour Trustees v. Oswald, a corporation may not so act as to disable itself from exercising in the future a power that is granted to it by Parliament. Therefore, on July 21, 1934, it would have been ultra vires for Hendon Corporation to have dedicated Stonegrove Park to the public, since if it had done so, it would have deprived itself of its right to let the land for some other purpose. So it must be deemed to have chosen the other alternative open to it under section 164 of 1875, and to have carried out the purpose of that section by retaining the right of occupation and admitting the public as licensees only. This is not an argument which has so far appeared in any of the numerous cases in which the rateability of parks has been considered. Sir Derek's first task, therefore, is to distinguish the existing authorities, and for this purpose they fall into three categories. The first is represented by the Brockwell Park case. In this case there was something which Sir Derek calls a "statutory dedication," which he defines as a dedication which a local authority is able and bound to make, by reason of a statutory restriction preventing it from alienating the land to any use inconsistent with the public right of access. This restriction, he says, was imposed by the special Act authorising the London County Council to acquire Brockwell Park, and against it the power granted by section 164 of 1933 could not prevail. In such a case a local authority does not put it out of its power to let by making a voluntary dedication: the statute itself dedicates or compels the local authority to dedicate. The second category can be represented by Sheffield Corporation v. Tranter. This is a case in which the park was actually acquired under section 164 of 1875 and therefore superficially presents difficulties to Sir Derek's argument. But the deed under which it was conveyed to the local authority stipulated that it should be used for ever as public walks and pleasure grounds within the meaning of section 164 of 1875. In this case also it could be argued that the necessity for dedication was imposed externally and not voluntarily embraced by the corporation.
But the argument is in any event unnecessary, because section 179(d) of the Local Government Act, 1933, provides that nothing in section 164 of 1933 shall authorise the disposal of land by a local authority, whether by sale, lease or exchange, in breach of any trust, covenant or agreement binding upon the authority. A third category is represented by Liverpool Corporation v. West Derby Assessment Committee.Here a park was acquired under an Act giving a general power of acquisition and not, as in the case of Brockwell Park, specifying a special property. It is not a public Act as is the Public Health Act, 1875, but Sir Derek did not rely upon that; neither did he, I think, effectively distinguish its language from the language used in section 164 of 1875. The deed under which the land was acquired did not contain any restrictive covenant. This, again, is therefore superficially a difficult case for Sir Derek's argument, which, indeed, has something in common with the argument of Mr. Horridge rejected by Lord Alverstone C.J., and by the President, Sir Gorell Barnes. They held that the existence of the power granted by the Act to the corporation to dispose of land not required for the purposes of the Act did not prevent the corporation from making an effective dedication. Sir Derek distinguishes this case by pointing out that the court had not got to consider the wide power of leasing given by section 164 of 1933; and the power to dispose of land, which it was considering, was restricted to land not required for the purpose of the statute. Before 1933 the power of a local authority to lease was similarly restricted, being contained in section 177 of the Public Health Act, 1875, applying only to land which "they can conveniently spare," and requiring in all cases the consent of the Local Government Board. Sir Derek indeed relies upon the judgement of the President as being in his favour, because the President expressly said "that the position would be different if, upon the terms of this statute, the corporation had immediate power of disposal of the property. ..." The power which the President there refers to is a power to utilise the ground in some way other than a park; the dictum assists Sir Derek if, but only if, section 164 of 1933 can be construed as giving such a power. Finally, there are two decisions which are not binding upon us. The first is a decision of Finnemore J. in Hall v. Beckenham Corporation, where a park was acquired under section 164 of 1875 and there were no restrictive covenants in the conveyance. Finnemore J. nevertheless held that the Brockwell Park principle applied and the local authority were not the occupiers. This decision is irreconcilable with Sir Derek's argument and he invites us to overrule it. The other is a decision of the Divisional Court in North Riding of Yorkshire County Valuation Committee v. Redcar Corporation.In this case the Redcar Corporation had acquired 381 acres of foreshore under section 164 of 1875. It laid out 7 acres of it as an enclosure on which it built swimming baths, an open-air swimming pool and a boating lake. Admission fees were charged for these places which, together with other parts of the foreshore developed by the corporation, were described by Lord Caldecote C.J. as a "great place of popular entertainment"; the takings from the baths, pool and lake in 1937 amounted to £4,415. The Divisional Court held that those parts - the baths, pool and lake - were occupied by the authority and not in the beneficial occupation of the public and so were rateable. It is not suggested that in the present case the Hendon Corporation have done anything like that. But, says Sir Derek, they have power to do it; and the essence of his argument is that it is the power that matters and not whether in fact it is exercised. In this state of the authorities it is necessary for us to examine Sir Derek's argument to see whether it is sound in principle. It is based upon two propositions. The first is that section 164 of 1875 on its true construction empowers the local authority to give effect to it in one of two ways, either by dedicating to the public the land it acquires or by retaining occupation itself.
Sir Derek does not argue that section 164 of 1875, taken by itself, does not give power to dedicate; he could not argue that consistently with authorities binding on us, such as Sheffield Corporation v. Tranter, in which it was held that acting under section 164 of 1875 a local authority had in fact dedicated. If that were the only power given to a local authority under section 164 of 1875 the local authority would be compelled to dedicate as the only way of carrying out its task under the section, and the position would then be the same as under the special Act in the Brockwell Park case. Thus the existence of a choice is essential to Sir Derek's case. His second proposition is that section 164 of 1933 empowers the local authority to let land which it has acquired for one purpose for another purpose destructive of the former. This proposition also is essential to the argument; if section 164 of 1933 is construed in accordance with it, it eliminates the power to dedicate which section 164 of 1875 would otherwise contain, and so leaves the local authority with no option except to retain full ownership and occupation. In our opinion both these propositions are erroneous in law. The error in the first proposition must, we think, be attributed in some measure to the misuse in this connection of the term "dedication." In Attorney-General v. Manchester Corporation Maugham J. said: "I am not convinced that the word 'dedication' is really an appropriate word in relation to the acts of a local authority dealing with property which it has acquired under public or local Acts.
At any rate, such a word may be misleading. When a private landowner dedicates a road which he has laid out to the public, he is dealing with his own property and is doing a public-spirited act for the benefit of the public at large. A local authority has land vested in it for the purpose of carrying out its duties as a local authority. It is not entitled, generally speaking, to give away a portion of the property vested in it as a local authority. It is no doubt entitled, under certain sections of the Public Health Act to which I need not refer, and very often under local Acts, to make public roads, or to take over roads with the result that they become public and repairable by the inhabitants at large; but those rights are rights which are strictly defined, and when a corporation or other local authority acquires land for a particular purpose, the word 'dedication' is quite unnecessary in such a connection, if all that is intended is to say that the local authority prima facie cannot use the land except for the purpose for which it has been authorised to purchase it. A fortiori, if it has obtained a loan to enable it to acquire the land for a particular purpose, or expended local funds in acquiring lands for such a purpose, it is not entitled to change its mind and to apply the land for a different object or purpose." We respectfully agree with these observations. Of course the public right of free and unrestricted use does not begin the moment the local authority acquire the land which they intend to "dedicate" as a public park. Work may have to be done to the land and arrangements made for its control and management as a park. "Dedication" may not be an inapt word to describe by way of analogy the moment when, the purpose having been executed, the public enter into the enjoyment of rights similar to those which they enjoy over the highway. But it is a misleading word if it tends to suggest that when it "dedicates" a local authority is doing something voluntarily and as a matter of choice.
The purpose of section 164 of 1875 is to provide the public with public walks and pleasure grounds. The public is not a legal entity and cannot be vested with the legal ownership of the walks and pleasure grounds which it is to enjoy. But if it can be given the beneficial ownership, that is what it should have. In the case of buildings, such as libraries and art galleries, the needs of management may be deemed to require the local authority to retain the right of occupation. But the local authority has no right to retain out of lands intended for the enjoyment of the public a right of occupation that is not necessary for their management. In all the cases in which parks have been considered it has been taken for granted that what the public gets is, as in the case of a highway, the beneficial ownership of the land. We can see no reason why the public should be entitled to get anything less under section 164 of 1875 than they got under the special Act in the Brockwell Park case. It seems to us to be quite immaterial that in the latter case the land was dedicated when the Act was passed, and in the former it was left to the selection of the local authority. The only substantial difference in the wording is that, in the special Act, the park is to be "for the perpetual use thereof by the public," while in section 164 of 1875 no time is mentioned. But that does not mean that section 164 contemplates a time limit; it means that it is to be so used for an indefinite period. In Burnell v. Downham Market Urban District Council Lord Evershed said that "perpetual" did not mean for all eternity but for the foreseeable future. In our judgement there is no true distinction between this case and the Brockwell Park case. Neither can the present case be satisfactorily distinguished from Sheffield Corporation v. Tranter.
The distinction suggested is no more than that in Tranter's case the land was conveyed to the local authority upon trust "to permit the use for ever as public walks and pleasure grounds within the meaning of section 164 of the Act." All that this form of covenant requires is that the local authority do what the Act requires them to do. It imposes no extra burden upon them but merely identifies conveniently the purpose for which the land is being acquired. We cannot see that it affects the legal position. It follows from the reasons whereby we have rejected the first proposition that there is no need for the corporation to obtain a finding of fact in the case that an act of dedication has taken place. It is sufficient that it should appear from the case, as it does from this case, that land acquired by a local authority under section 164 of 1875 is being used by the public for the purposes set out in that section, and that they have free and unrestricted use of it (qualified, it may be, by a limited exclusion for ancillary purposes) for those purposes. That is sufficient material from which to infer that beneficial ownership has passed to the public and to negative occupation by the local authority. Of course, if the exclusion of the public from free use goes beyond what is justifiable as ancillary, the land, or the parts of it subject to the exclusion, will be rateable on the ground that they are no longer beneficially occupied by the public but are being occupied by the local authority for its own purposes. That is what happened in North Riding of Yorkshire County Valuation Committee v. Redcar Corporation.
If we are wrong in thinking that Sir Derek's first proposition fails, and if there are two ways in which the corporation could discharge its duty under section 164 of 1875, it would be necessary for the case to contain a finding of facts sufficient to show which choice had been made; and it is doubtful whether this case does. An opening to the public for use by them is consistent with their use of it under a licence terminable by the corporation if it had some other statutory power enabling it to do so, such as it is suggested is implicit in section 164 of 1933. But a remediable defect in the case stated would give the valuation officer no lasting benefit; he would, as we have said, get that only if Sir Derek's second proposition succeeds. We have already stated our opinion that it is unsound and we shall now briefly say why. On the footing that section 164 of 1875 confers a discretion upon the local authority to dedicate but does not impose an obligation to do so, the proposition is that the local authority cannot exercise its discretion to dedicate because, if it did so, it would interfere with the exercise of the discretionary power to let conferred by section 164 of 1933. Why should it not be said with as much force that the local authority cannot exercise its discretionary power to let because that would interfere with its discretionary power to dedicate?
The correct way of dealing with a situation in which two or more powers given to a local authority overlap and may conflict is laid down in British Transport Commission v. Westmorland County Council. You must ascertain first the object for which the land is held. All other powers are subordinate to the main power to carry out the statutory object and can be used only to the extent that their exercise is compatible with that object. In the case cited the commission's predecessors had acquired land for the purpose of constructing and operating a railway; they had constructed a bridge across the railway line and dedicated or purported to dedicate to the public a footpath on the bridge. The House of Lords held that the exercise of the power to dedicate was compatible with the statutory objects of the railway authority; if the use by the public of the footpath had interfered with the operation of the railway line, it would have been otherwise. Applying this to the present case, the power to let in section 164 of 1933 is subordinate or supplementary to the main power in section 164 of 1875 and can, therefore, be validly exercised only if it is compatible with the full use by the public of Stonegrove Park as public walks and pleasure grounds. As, for example, in Sheffield Corporation v. Tranter, a part of the land might be let as a refreshment pavilion, provided that the use of the pavilion is ancillary to the use of the park and a necessary amenity. Thus the principle in Ayr Harbour Trustees v. Oswald has no application; the corporation cannot ever by carrying out in full its statutory objects be held to be abandoning powers whose function is limited to assisting in the fulfilment of that object. Of course, if section 164 of 1933 had been worded in such terms that it specifically authorised the local authority to let a public park for use for some commercial purpose, the position would be different. The case would then come within the dictum of Sir Gorell Barnes in Liverpool Corporation v. West Derby Assessment Committee, to which we have referred and on which Sir Derek relied. It would mean, in effect, that the corporation was given express statutory authority of its own motion to alter the statutory object for which it held the park. Sir Derek relies on section 179(d) of the Act of 1933 and submits that, by implication from that subsection, section 164 of 1933 must be construed as wide enough to authorise any letting that is not "in breach of any trust, covenant or agreement binding upon the authority."
We cannot agree. The object of section 179(d) is to cut down the power of letting, not to extend it. A local authority who wanted it to acquire a piece of land particularly suitable for a pleasure ground might have to covenant not to use it in a particular way otherwise legitimate and within its powers. For example, a man selling a part only of his land might object to a refreshment pavilion on his boundary. Provided that the erection of a refreshment pavilion on that spot was not essential to the use of the land as a pleasure ground, the local authority could properly covenant not to erect one, notwithstanding that it had statutory power to do so. This illustrates the proper application of the principle in the Ayr case: see Stourcliffe Estates Co. Ltd. v. Bournemouth Corporation. Accordingly, in our judgement, the argument based on section 164 of 1933 fails. Sir Derek based a similar argument on other statutory provisions giving the local authority powers in relation to lands which it held; some of these powers are general, such as power to let or to sell lands that are not required for the statutory purpose, and others relate to parks and pleasure gardens in particular and deal with the provision of amenities for them, such as pavilions and recreation grounds, and the right to charge for admission thereto.
Most of these powers are conveniently set out in the judgement of Cassels J. in the Redcar case; since then an additional power for the provision of entertainments has been given by the Local Government Act, 1948, s. 132. Sir Derek also relied upon a dictum in the judgement of Cassels J. in relation to the statutory powers which he set out. Cassels J., holding that what the local authority were doing was on too great a scale to be described as ancillary to the use of the land as public walks and pleasure grounds, said nevertheless that the Redcar Corporation had statutory authority for what they were doing. If this dictum is correct, it means that the corporation had statutory authority to deny to the public the beneficial occupation of those parts of the land which were being used as places of entertainment, and Sir Derek relies on this as showing that those powers which Cassels J. mentioned were not being treated by him as subordinate to the main power in section 164 of 1875. The dictum was not necessary to the decision: the legality or the illegality of what the corporation was doing was not strictly relevant. Rateability depends upon how the land is in fact being used, not on how it ought to be used, and, whatever their legal obligations might be, the local authority had in fact assumed the character of rateable occupiers; see on this point Burnell v. Downham Market Urban District Council, per Lord Evershed MR I dare say that all that Cassels J. meant to say was that the council's activities were covered by the words of the statutes to which he referred; there was no occasion for him to consider whether a proper use was being made of powers that were literally wide enough. Looked at as a whole, the Redcar case is inconsistent with Sir Derek's argument, at any rate in the result. What the Redcar Corporation had in fact done to part of the land, it would have had power on his argument to do to the whole of the land; so the whole and not merely the parts taken for entertainment should have been rated.
It was not so held; and the transcript of the argument to which we have been referred shows that Mr. Sydney Turner conceded that the Brockwell Park principle applied except to the parts actually affected. We are, in effect, repeating ourselves when we say that if in any of the provisions which Cassels J. mentions, Parliament specifically authorised the use of a pleasure ground acquired under section 164 of 1875 in a manner which was a real denial of its free and unrestricted use by the public, and if the language was explicit and its meaning could not be cut down by reference to the object of section 164 of 1875 taken by itself, it would be necessary to construe the two provisions together, and maybe to hold that the object of section 164 of 1875 had been altered and was one that was no longer consistent with beneficial occupation by the public. We were not invited to consider for this purpose all the statutory provisions enumerated by Cassels J. Sir Derek selected as his best example section 76 of the Public Health (Amendment) Act, 1907. We have considered this section, which does relate specifically to parks and pleasure grounds; but the powers mentioned in it all appear to be capable of being exercised as ancillary powers and, in our opinion, there is nothing in the section that by necessary implication alters the statutory object fixed by section 164 of 1875. For these reasons, in our judgement, the appeal succeeds and Stonegrove Park should be held to be exempt. We are conscious with regret that we are differing from the judgement of the very learned and experienced arbitrator who gave the decision of the Lands Tribunal and whose reasoning Sir Derek in his argument has sought to uphold. That argument was perhaps narrower than it would have been if the subject-matter were not now for us closely covered by decisions of this court. After the Brockwell Park the House of Lords has never considered again the rateability of a public park, but since the argument in the present case they have delivered a judgement in Kingston-upon-Hull Corporation v. Clayton in which they held that an art gallery conveyed to the corporation "upon trust to permit the same to be used and enjoyed by ... the public generally as an art gallery for the exhibition of works of art in perpetuity" was rateable. The House distinguished the Brockwell Park case and reserved their opinion upon whether the decisions in the Court of Appeal that followed and extended that case were correct. These decisions are binding upon us; and while it is not easy to distinguish de facto between a local authority's occupation of a public park and its occupation of a public gallery, it is not open to us, as it will be in the House of Lords, to re-examine the whole matter afresh; and we have not been invited to do so. As the law stands at present, there must inevitably be a difference for rating purposes between a public park and a public art gallery. But that, at least, is a difference which can be stated in a way which is intelligible to the ordinary man even if he does not pretend to understand the reasoning behind it. It would not be a satisfactory result if some parks were to be aligned with galleries and others not; parks would then have to be divided into two categories, not outwardly distinguishable and identifiable only by the nature of the instrument by which the park was acquired, whether it was a public or a private Act, and whether the deed or conveyance did or did not include a restrictive covenant. Such a division would be particularly unsatisfactory because all that a local authority would have to do to put a park into one category rather than the other would be to ask the vendor of the land to insert such a covenant as in the case of Sheffield Corporation v. Tranter, requiring the corporation to do that which by statute it was required to do anyway.
Appeal allowed with costs.
Leave to appeal to House of Lords refused.
Bartlett VO and Spelthorne BC v Reservoir Aggregates Ltd 1985
References : [1985] 2 E.G.L.R. 171; (1985) 275 EG 1016; [1985] RA 191; (1985) 135 New LJ 888, CA; affirming [1983] RA 254, [1984] J.P.L. 395, Lands Tribunal
Lands Tribunal
These 22 appeals which have been consolidated into two groups all raise the same questions and are conveniently dealt with together. They arise from decisions of the Surrey Local Valuation Court given on 18th December 1981 when the court had before them eight proposals made by the valuation officer for the North Surrey valuation area and three proposals made by Reservoir Aggregates Limited (whom I shall refer to as RA) over a period between 24th March 1975 and 4th March 1981. The premises which are the subject of these appeals all lie within what is now known as the Spelthorne Borough. At the time of the general revaluation in 1973 they were partly in the Staines urban district and partly in the Sunbury urban district and entries in the valuation lists for those two districts were made in respect of a hereditament described as "Part of Sand and Gravel pit and Premises". No dispute arises in respect of that part of the premises situated in the Staines urban district but by the time the valuation officer's proposal was made on 22nd March 1978 the whole was included in one rating area as a single hereditament described as "Sand and Gravel Workings and Premises". I need say no more about these changes in local authority boundaries and nomenclature since there is no dispute between the parties on matters of valuation and alternative values to be inserted in the different valuation lists have been agreed.
Appeals against the decisions of the local valuation court have been made by Mr J.P.H. Bartlett, the valuation officer concerned, and by Spelthorne Borough Council, the rating authority. On consolidation the valuation officer appears as the appellant, the rating authority as first respondent and the ratepayer company as the second respondent. The rating authority in the pleadings adopt in full the contentions of the appellant valuation officer. On the first day of the hearing a formal appearance was put in by the authority's solicitor who, however, took no further part in the proceedings.
The dispute is about the rating assessment of land, buildings and plant, valued together with mineral workings in and adjacent to the Queen Mary Reservoir of the Thames Water Authority (whom I shall refer to as TWA) in Ashford Road to the north of Staines. In particular, I am asked to decide whether certain mineral workings carried on within the reservoir form part of a larger hereditament in the occupation of RA consisting also of mineral workings with buildings and plant on the adjacent land; or whether they do not form part of the rateable occupation by RA because the operations carried on consist of the deepening of the reservoir generally under the supervision direction and control of the water authority.
The reservoir was authorised under the Metropolitan Water Board (New Works) Act 1911 but was not completed until about 1925. The functions of the reservoir are firstly to hold a large volume of water in reserve to meet a fluctuating demand, and secondly to form an integral part of the water purification process. The water is supplied to large parts of London. The reservoir is in constant use and for this reason is known as an 'on line' reservoir. The water is pumped in from the Thames by a pumping station, spends about one month in the reservoir and then passes on by gravity to treatment works. Fort of the purification process takes place whilst the water is in the reservoir, since the enteric bacteria largely die out during the storage period and particles in suspension settle to form silt. The demand for sources of supply and storage capacity for water in the London area has steadily increased over the years and in recognition of the need to expand storage capacity, the construction of new reservoirs at Wraysbury and Datchet in the Thames Valley was proposed in 1946. At that time, informed opinion considered that problems of stratification in the water, leading to objectionable tastes and odours which would make the water unusable from time to time would arise where water was stored at depths exceeding 50 feet. By the early 1960's further research had indicated that deep water could be continuously moved around by the introduction of under water jets and that increased depths of up to 60 or 70 feet were feasible on biological grounds.
In 1962 consideration was given by the Board to the deepening of all its reservoirs by means of extracting the ballast which overlay the London clay into which the core walls are tied, and the deepening of the Queen Mary Reservoir was seen as an experiment which, if successful, could lead to the deepening of other reservoirs.
The Queen Mary Reservoir was thought to be particularly suitable since it was constructed above the original ground level by forming earth embankments supporting a puddle clay core keyed into the underlying strata of London clay. The clay floor of the reservoir is overlain by a stratum of gravel of an average thickness of 121 feet, which is itself overlain by overburden material. The average depth of the reservoir from top water level to the top of the overburden is between 35 and 40 feet. The exercise of deepening the reservoir involves the excavation of the overburden and gravel down to the upper surface of the London clay. The capacity of the reservoir prior to the removal of any of the gravel was 6,679 million gallons. It is anticipated that upon completion of the work the capacity will have been increased by 1,510 million gallons to 8,189 million gallons.
The deepening of the reservoir was authorised by the op Metropolitan Water Board (Queen Mary Reservoir) Order 1969 SI 1969 No.3. It came into operation on 13th January of that year. Articles 3 and 4 provided as follows:
"3. The Board being the owners of the reservoir may deepen the reservoir by the extraction from the interior of the reservoir of the whole or such part as they may think fit of the minerals and other materials overlying the London clay.
4. The works authorised by this order shall for all purposes be deemed to form part of the undertaking."
In the meantime the Board had made application on 23rd May 1967 to the two planning authorities who were at that time concerned, for planning permission to "deepen the Queen Mary reservoir ... and thus increase its water storage capacity by about one fifth by removing the gravel deposits On 19th November 1968 planning permission was granted subject to condition, in respect of both applications in the following terms:
in Staines,
"The extraction of sand and gravel from 9.25 acres of land to the west of the Queen Mary Reservoir"
and in Sunbury, for
"Deepening of the Queen Mary Reservoir and the extraction of sand and gravel from 6.75 acres of land to the west of the Reservoir".
On 1st April 1974 the powers, functions and property of the Metropolitan Water Board were transferred to TWA. On 20th January 1969 the Board had entered into an agreement with RA, which was a consortium of mineral undertakers primarily concerned in the extraction of sand, gravel and ballast in south east England. The agreement provided inter alia that the Board in the exercise of their powers to deepen the reservoir by the excavation of the minerals therein contained granted to RA during a period of 20 years (subject to extension under certain circumstances):
"The exclusive right of excavating, processing, removing and disposing of minerals, hard core and ashes on and from the site."
The agreement laid down a large number of conditions and in particular Clause 24 provided as follows:
''Programme and method of working
24. (1) RA shall carry out its operations under this Agreement in accordance with a programme and method of working and rate of working approved by the Engineer (whose decision shall be final and without appeal) and the Engineer shall be entitled by notice in writing to RA or to the Representative of RA to require such programme, method of working or rate of working to be varied from time to time if necessary to ensure or preserve the continuity of supply to the Board's consumers, the safety of the reservoir or any other works of the Board or the quality of the water it the reservoir.
Matters to be observed by RA in working
(2) Without prejudice to the generality of the provisions of sub clause (1) of this Clause, the following conditions and stipulations shall apply in respect of the carrying out of the operations under this Agreement, that is to say:
(a) With regard to the adjoining land:
(i) Excavation for winning minerals shall not be carried out within 240 feet or such lesser distance as the Engineer may decide measured from the outside toe of the reservoir embankment, the area (hereinafter in this Clause called "the prescribed area") lying within 240 feet measured from the outside toe of the reservoir embankment being shown by vertical broken black lines on signed plan No.1;
(ii) Excavation for foundations for the loading from any buildings, plant, machinery, roadways, apparatus and other works of any kind whatsoever within the prescribed area shall be subject to the approval of the Engineer;
(iii) The sizes and heights of any heaps of materials tipped on the prescribed area shall be subject to approval by the Engineer;
(iv) In order to ensure the prevention of any ,in flow of ground water into the open excavated area the water level therein shall (if the Board so require) be kept at such level as the Engineer shall from time to time determine Provided that the level determined by the Engineer shall not exceed twelve inches above the higher of the two rest water levels in the observation bore holes shown marked A and B respectively on signed plan No.1;
(v.) Where there is a stratum of fine uniform sub angular sand such as is described in the records (copies of which have been produced to RA) of the boreholes put down on the site in 1912 and 1913 and on the record drawings of the reservoir copies of which have been produced to RAI as Blue running sand above the London Clay the depth of excavation shall be limited so that a thickness of three feet of gravel is left on top of the stratum of sand.
(b) With regard to the excavation of materials from the reservoir and the operations connected therewith:
(i) Excavation for minerals and overburden shall not be carried out within the area hatched with vertical broken black lines on signed plan No.2 the inner boundary of such area being as to part within 300 feet measured inwards into the reservoir from the inside toe of the main embankment and as to part within 200 feet measured from the toe of the baffle embankment;
(ii) Within the area to be excavated RA shall be permitted to excavate to the top of the London Clay;
(iii) RA shall be entitled to excavate the overburden which covers the gravel in certain parts of the reservoir floor within the area to be excavated and to dump this overburden in the deepest hollows in the London Clay in places and to levels to be approved by the Engineer;
(iv) Where the "clay pits" for the construction of the reservoir have been filled with dirty gravel or spoil which is found to be unsuitable for working, RA shall be permitted to leave this as a shoal area;
(v.) RA shall not be required to cut drainage channels in the clay bottom of the reservoir or through the shoal areas referred to in paragraph (b)(iv) hereof.
Except in relation to paragraphs (b)(iv) and (v.), the decision, approval and determination of the Engineer for the purposes of this sub clause shall be final and without appeal."
There was provision for royalty payments by RA to the Board, with conditions as to minimum royalty, and also for a programmed output which was to be at the rate of 600,000 cubic yards per annum after completion of the installation of plant required for the operations both on the bed of the reservoir and on the adjoining land. The programme, having been prepared by RA and approved by the Engineer was supplemented in August 1975 by a "Code of Practice for operating within the Reservoir" agreed between RA and TWA, who had by this time taken over from the Board. The code of practice was revised in 1978, but for present purposes, it is enough to say that its stated purpose was to set out agreed procedures to be observed by all personnel of RA to ensure that the removal of gravel from within the reservoir was carried out with maximum safety, not only of persons and plant, but also of the reservoir structure and with maximum protection of the water from pollution. It was clearly stated that TWA would continue to use the reservoir "whilst gravel winning was in progress". There were sections dealing with the dredgers, recovery plant, floating conveyors and barges, the recording of log sheets, the placement of marker buoys and so on.
RA began preparatory work in July 1969. They first established a fresh water lagoon oh the adjoining land from which water could be taken for the processing plant. During 1969 and 1970, plant was erected on the adjoining land for watering, screening, grading, sieving and crushing the gravel to be extracted. In July 1970 they started the extraction of sand and gravel from the adjoining land, thereby facilitating the formation of lagoons in the area between the reservoir and Ashford Road of sufficient size to receive the anticipated quantity of mud and other non saleable material which might be extracted from the reservoir. The type and design of buildings, plant, machinery and apparatus was discussed with and approved by TWA before operations within the reservoir began.
Those operations started in September 1974. The method of extraction and operation is as follows
1. Dredging the material from the bottom of the reservoir;
2. Transporting the material from the dredger to a point close to the side of the reservoir used as an underwater stock pile;
3. Recovery of the material from the stock pile by means of recovery plant and transfer by conveyor to the adjoining land for processing.
Arrangements are made for the deposit of the overburden within the reservoir.
The dredging operation requires the removal of mud, silt and gravel down to the London Clay, and thus requires equipment that can dredge efficiently to a depth of 50 feet. Two types of catamaran dredger are currently used:
1. A "grab" dredger with a grab capacity of 41 cubic metres. The grab is lifted to the surface and deposits its contents into a barge. Power is provided by a diesel generator house on a separate pontoon alongside the dredger.
2. A "pressair" dredger which employs the principle of air lift. Air is blown down the outer annulus of a twin dredge pipe. A mixture of air, water and gravel is rifled into the inner tube and lifted by air to the surface where the gravel and water are dropped into a barge. Power is derived from two separate diesel engines.
Refuelling of the barges takes place alongside a pontoon jetty near the recovery plant. Each of the barges contains tanks with a capacity of 10,000 litres and can therefore be used as fuel bowsers for the dredgers. The tanks are fitted with gauges which have sirens to warn of over filling. Each of the pontoons was pressure tested before being put on the water and is checked weekly by RA and monthly by TWA. The importance of protecting the reservoir of drinking water from the effects of oil pollution is constantly underlined in the arrangements made between RA and TWA.
There art three drop bottom barges used for the transport of material on the surface of the reservoir. The barges collect dredged material from the dredgers and drop it on the underwater stock pile near the shore and alongside the recovery plant. There is also a work barge carrying a two ton crane.
The recovery plant removes material from the underwater stock pile which is then placed into hoppers and fed on to two de watering screens. The material, other than large lumps of overburden, stones and so on is then taken by a series of conveyors and deposited on a shore based surge heap from which the gravel is taken for washing, screening and processing.
It is necessary to control the dredger operations, partly to ensure that all gravel is extracted, so far as is reasonably possible, thereby extending the capacity of the reservoir and partly to protect the stability of the embankments, including the clay core wall from encroachment. In order to attain the necessary degree of control, the reservoir has been surveyed and charted in 350 foot squares, each with a grid reference. RA normally are directed to work only one square per dredger at a time, but there are occasions when a dredger moves on before the dredging of the square Is complete. In those circumstances, it returns at a later date to complete the work. Positioning of the dredgers was .at one time carried out by the use of a sextant and experiments were also made with laser beams. The present system involves the use of electronic equipment known as a tellurometer. TWA and RA have agreed upon a method of ascertaining whether a square has been fully dredged by means of random samples and the application of statistical techniques. Daily records are kept by each dredger operator showing the number of barges loaded and also by the recovery plant operator of the quantities of material removed from the under water stock pile.
As I have indicated RA began work in 1969. Gravel was extracted from the land adjoining the reservoir during each of the eight years from 1970 to 1977 inclusive. In 1974 gravel was extracted for the first time from the bed of the reservoir and has continued from that time. There was thus a period of four years from 1974 to 1977 inclusive when the gravel was extracted from both sources.
Throughout the period assessments had been entered in the valuation list in respect of the mineral workings on the adjoining land, including the buildings and processing plant. There is no dispute about these assessments. The valuation officer's proposals, which give rise to these appeals, sought to increase those assessments by reflecting also the value of the mineral workings in the reservoir. The local valuation court came to the following conclusion:
"We are of the opinion that Reservoir Aggregates Limited are not in paramount occupation of the gravel stratum as they are under the strict control of the Thames Water Authority and therefore it is not a rateable hereditament and the Court determines the values.....as agreed between the parties."
The appellant valuation officer and the rating authority contend that the hereditament to be valued comprises also the mineral workings in the reservoir. The ratepayers contend that the local valuation court came to a correct decision and that the assessments determined by the court should be sustained. Alternative values have accordingly been agreed as follows:
Decision of LVC agreed on the assumption that the contentions of the ratepayers are upheld Decision of LVC agreed on the assumption that the contentions of the Valuation Officer are upheld
The facts which I have set out are taken largely from agreed documents and there is little, if any, disagreement on the history of the operations nor on the way in which the work is carried out. For the appellant valuation officer Mr Fletcher called Mr Alan Dixon ARICS, the mineral valuer in the valuation office of the Inland Revenue responsible for the area. In Mr Dixon's opinion the operations carried on by RA in the reservoir were typical of a normal sand and gravel working of the wet variety, that is to say, where the work of gravel extraction took place below the water table. On the adjoining land lagoons were established, and provision was made for slurry settlement. The size of the lagoons was calculated to take all silt from the reservoir. The overburden which came from below water level was lifted and dumped back again under water a normal requirement in a mineral lease. Mr Dixon suggested that if RA had been employed merely to deepen the reservoir the overburden also would have had to be removed. The unusual features of the present operations were firstly due to the depth of working and secondly because the work there carried on was in a drinking water reservoir where stringent measures had to be enforced in order to prevent pollution. The operations were carried on in accordance with the provisions of the Mines and Quarries Act 1954 and the quarry manager required under the Act was an employee of RA. He admitted that in over 34 years experience this was the only case he had come across of mineral workings in a working reservoir. But he maintained that nothing in the agreement or the code of practice distinguished the present case from a standard wet gravel extraction operation apart from the need to safeguard the purity of the water.
For the second respondents Mr Widdicombe called first Mr Philip Cooley B.Sc. (Eng.) AMICE who had been on the staff of the Metropolitan Water Board from 1945 until his retirement in 1980. He was particularly concerned in research and development and his evidence was related to the problems of thermal stratification in reservoirs and the research and development which had taken place in recent years which led to the proposed deepening of the Queen Mary Reservoir. The sole purpose of the proposed deepening was to increase the storage capacity of the reservoir in the light of improved scientific knowledge, although at the time of Mr Cooley's retirement no new outlets had been installed to take advantage of the increased capacity. The statutory powers of the Board were limited to providing water, and in Mr Cooley's opinion, the Board could not have undertaken the commercial exploitation of gravel from within the reservoir within those powers. Mr Cooley agreed that there were certain deep holes which had existed in the bed of the reservoir since the time of its construction. In some cases these had been filled with dirty gravel or spoil. These factors had no effect on the quality of the water, but it would be an advantage if the floor level of the reservoir drained gradually to a lowest point. Under the agreement RA were not required to improve the floor in this way, by cutting drainage channels in the clay bottom of the reservoir or through the shoal areas.
Mr Widdicombe also called Mr Neil Samson, AMICE AMIWE.
Mr Samson confirmed Mr Cooley's opinion of the scientific grounds for deepening the reservoir. About 30% of the process had now been carried out but the time had not yet come to provide a proper system of under water jets. For this purpose an extensive series of hydraulic tests would be needed. Mr Samson accepted that under the terms of the agreement RA were not required to remove unsuitable material and were permitted to dump overburden back in the reservoir. He agreed that the floor of the reservoir should ideally drain to a single point but said that the dumping of overburden might help to this end by filling up undulations in the bed of the reservoir.
Mr Samson was personally involved at the time when initial bearings were taken on the adjoining land in order to ensure that when running sand was encountered a three foot layer of gravel was left on top of the sand. This involved frequent inspection and his involvement continued throughout the period when the equipment for dredging in the reservoir was being approved. Mr Samson emphasized the constant presence of TWA whilst the dredging operations were going on and indicated that TWA provided one inspector who was afloat on one or other of the vessels throughout the working day. The third witness for the ratepayers Mr G H Aitken, who was examined by Mr Roots, is a member of the Institute of Quarrying and has been the manager of RA since October 1979. In Mr Aitken's view the agreement with TWA was not a normal agreement because the authority had control of the design of the equipment, how it was to be used and where. The agreed programme provided for a minimum output which in his experience was unusual in a mineral lease. Mr Aitken dealt with the degree of supervision exercised by TWA. For example, the authority's inspector went out whenever he wished to visit the vessels on the reservoir surface, sometimes alone, sometimes with RA's dredging manager or foreman. Any complaints would normally be reported to the dredging manager unless some emergency' arose, for example, the leakage of oil into the water. Alterations on one occasion had to be made to the pressair dredger. I was shown a bundle of correspondence which illustrated the direct involvement of TWA in the day to day activities of RA during the period between 1969 and 1980. There were frequent discussions on the approval of equipment and on various occasions the authority had to bring to the attention of RA certain breaches of the code of practice and of the agreement.
For the appellant valuation officer Mr Fletcher observed that the hereditament to be valued consisted in the earlier years of the mineral workings on the adjoining land and on the bed of the reservoir together with the buildings and processing plant standing on the land. There were no grounds for distinguishing the extraction of gravel from the land from the extraction of gravel from the reservoir; nor was there any justification for treating the mineral extraction from the reservoir any differently when the mineral extraction on the land came to an end in 1977. He relied on the old case of R. v. Whaddon Overseers(1875) L.R. 10 QB 230 which clearly defines rateable occupation in cases where mineral extraction constitutes a shifting hereditament. Mr Fletcher drew attention to the fact that the occupation by RA was in exercise of their rights under the agreement which granted them the exclusive right of excavating, processing, removing and disposing of minerals, hard-core and ashes on and from the site, where the site was defined as the reservoir together with the adjoining land. In this particular, Mr Fletcher distinguished the present case from Cobley (Valuation Officer) v. Horlock (Dredging) Co Ltd(1971) 18 R.R.C. 322 where there was no such exclusivity. Finally, Mr Fletcher submitted that in dealing with the question of paramount occupation, the degree of control exercised by TWA was not sufficient to establish the authority as in paramount occupation. The evidence of Mr Dixon clearly indicated that there was nothing unusual in mineral leases where an owner required a strict record to be kept of all minerals worked and provided his own inspection. The precautions which TWA took in order to safeguard the quality of the water and to protect it from pollution was no different in principle from the regulations and bylaws imposed by the Southern Railway over the bookstalls and banks at Victoria station in Westminster City Council v. Southern Railway Company[1936] 7 AC 511.
It; Widdicombe submitted firstly that RA were carrying out their work as contractors extending the capacity of the reservoir for TWA in accordance with the authorisation provided under the statutory instrument and in accordance with the planning permissions granted by the planning authorities. Construction sites, says Mr Widdicombe, are not rateable either in the occupation of the building owner or of the contractor and he relied on Arbuckle Smith & Co. Ltd. v. Greenock Corporation [1960] 813 A.C. . He referred also to Laing (J) & Son v. Kingswood A.C. [1949] 1 K.B. 345 and to Dick Hampton (Earth Moving) Ltd v. Lewis VO [1976] 1 QB 254 and suggested that although the contractors' huts it John Laing and the borrow pits in Dick Hampton (Earth Moving) Ltd v. Lewis VO were held to be rateable, the proper comparison was with the aerodrome in Laing and the motorway in Dick Hampton (Earth Moving) Ltd v. Lewis VO, neither of which was considered to be in rateable occupation. Mr Widdicombe relied on Cobley v. Horlock in which he said the facts were indistinguishable from those in the present case.
In the alternative, Mr Widdicombe submitted that if there was rateable occupation of the stratum of minerals being worked within the reservoir then TWA were in paramount occupation because the work being carried out was done entirely in accordance with their requirements and under their day to day supervision. The object of the work was to deepen the reservoir and TWA had no authority to engage in commercial mineral operations. The fact that it was financially advantageous to TWA that the contractors should pay a royalty because the material which they extracted was saleable in their hands did not dislodge the position of TWA as the paramount occupier. In support of this submission Mr Widdicombe relied on Soldiers', Sailors' and Airmen's Families Association v. Merton London Borough Council [1966] 1 WLR 736, and Andrews v. Hereford Rural District Council [1963] 710 R.R.C. I where a landowner was held to be in rateable occupation of a gravel pit and not the company which worked the pit; and in particular, the passage in the judgement of Lord Parker C.J. at page seven: "Here is a case where the grantor of a licence, can go, as I understand it, from day to day and say: you shall not work that bit, or: I want you to work this other bit". Mr Widdicombe also referred to Vickers Armstrong (Ship Builders) Ltd. v. Thornton (Valuation Officer) [1965] 1 R.R.C. 66 and Greenall (Valuation Officer) v. Castleford Brick Company limited(1959) 5 R.R.C. 235. Finally Mr Widdicombe wished to reserve his position on the question of transience if I were to hold that RA were in rateable occupation of the disputed workings.
In considering the arguments I will deal first with one small matter in order to put it on one side. Article 4 of the Metropolitan Water Board (Queen Mary Reservoir) Order 1969 provided that the works authorised by the order shall for all purposes be deemed to form part of the undertaking. Mr Widdicombe, although drawing attention to this provision, did not develop, any argument on it. For my part, I accept what Mr Fletcher says that the Minister in making the order cannot be taken to alter the law of rating. In my judgement, this case falls to be decided on the basis of established authority and if on that basis I am persuaded that RA are in rateable occupation of the disputed workings, then nothing contained in the statutory instrument can prevail to the contrary.
In turning to a consideration of the law I think it is first necessary to identify the hereditament which is the subject of appeal. The proposals which give rise to these appeals all related to a hereditament already appearing in the appropriate valuation list and consisting of part of a "Sand and Gravel pit and Premises" or "Sand and Gravel Workings and Premises". The proposal in each case sought a variation in the assessment appearing in the list at the time, normally for an increase on the grounds "that the present assessment is incorrect and insufficient", but also in one case for a decrease on the grounds that the present assessment "is incorrect and excessive". The three proposals made by RA in 1979, 1980 and 1981 were all stated to be in respect of "Sand and Gravel Workings and Premises, Queen Mary Reservoir" and sought nominal assessments on the grounds that the present assessment was "incorrect, excessive and bad in law".
It is not in dispute that RA were in rateable occupation of the gravel workings on the land adjoining the reservoir and also of the buildings and rateable plant standing on the land. As Denning LJ said in Gilbert VO v. S. Hickinbottom & Co Ltd [1956] 2 QB 40 at page 48:
"The case therefore raises the important question, what is a separate hereditament for rating purposes? The statutes contain no definition, but the practice which has prevailed for many years past warrants the following general rules: First, take the case where two or more properties are within the same curtilage or contiguous to one another, and are in the same occupation. In that case they are, as a general rule, to be treated for rating purposes as if they formed parts of a single hereditament. There are, however, exceptional cases where for some special reason they may be treated as two or more hereditaments. That may happen, for instance, when they are situate in different rating areas, or because they were valued at different times (see section 3(3) of the 1928 Act): or because they were at one time in different occupations (see Spillers Ltd v. Cardiff Assessment Committee, per Avory J); or because one part is used for an entirely different purpose (see North Eastern Railway Co v. Guardians of York Union)."
It seems quite clear subject only to the matter of local authority boundaries, about which there is no disagreement, that the hereditament formerly existing satisfied the tests there put forward by Denning LJ The properties concerned are within one curtilage in one occupation and the different parts, far from being used for an entirely different purpose, are used throughout for a unified purpose , the winning and working of minerals and their processing for sale. The premises were quite clearly occupying land which could be ringed round on the map and were capable of being separately let to a single occupier. At first sight, the extension of the mineral workings into the bed of the reservoir merely represents an enlargement of the hereditament which in its extended form still satisfies the test and continues so to do after 1977 when the mineral extraction on the land came to an end. If that extended occupation is to be looked at by itself it would seem prima facie that RA are occupying the whole as part of a single undertaking in exercise of their rights under an agreement granting them exclusive rights of excavating, processing, removing and disposing of the minerals on and from the reservoir together with the adjoining land. The fact that the workings are carried on in different parts of the reservoir does not, on the authority of R. v. Whaddon, mean that the hereditament cannot be identified as it were by being ringed round on a map. As Lord Russell of Killowen said in Westminster City Council v. Southern Railway at page 529:
"Subject to special enactments, people are rated as occupiers of land, land being understood as including not only the surface of the earth but all strata above or below."
If this be the correct way of looking at the matter, then it would seem that the valuation officer's proposals were well founded, subject only to questions of valuation with which I am not concerned. But the tests referred to by Denning LJ in Gilbert VO v. S. Hickinbottom & Co Ltd are described as general rules. The rule is a prima facie presumption only, and as Parker LJ indicated in the same case at page 54:
"The conclusion must depend on the weight to be attached on the facts of each case to other considerations."
The other considerations on which Mr Widdicombe relies in making his primary submission is that RA in removing the gravel from the reservoir under the terms of the agreement are acting as contractors working on the hereditament of TWA and that under the authority's statutory powers, the only operations which they are authorised to undertake are operations of deepening the reservoir. The fact that the contractors whom they have employed are able to carry on a commercial enterprise of their own which incidentally is financially advantageous to the authority is quite irrelevant in considering questions of rateable occupation. I think it is to be inferred from Mr Widdicombe's first submission, although he does not express it in this way, that RA cannot be in occupation of the stratum of minerals in the reservoir because it forms part of the hereditament occupied by TWA, which of course, is already separately assessed under the statutory formula for water undertakings set out in Schedule 4 of the General Rate Act 1967 as now amended by the Rating (Water Hereditaments) Order 1975.
The deepening operation, says Mr Widdicombe, does not constitute rateable occupation because it constitutes an alteration or improvement of the hereditament. He relies on Arbuckle Smith & Co. Ltd. v. Greenock Corporation [1960] 813 A.C. which was a case concerning a warehouse bought by a company with a view to using it as a bonded store. Considerable alterations in the premises were required before it could be granted approval for such use by Her Majesty's Customs and Excise. The work was carried out during a period of about three months and the local authority claimed rates in respect of the premises for the year, although there had been no previous use of the premises during that year as a warehouse. It was held that the making of alterations with the intention of carrying on a business when they were completed did not constitute rateable occupation or actual occupation within the meaning of the statute.
In the present case, the operations being carried on are capable of being expressed in two ways. On one view of the matter RA are mineral extractors working a gravel pit in the normal way, save that the effect of their work is to improve the hereditament in the occupation of TWA. It is equally true to say that the removal of gravel is an authorised operation of deepening the reservoir and RA are the contractors who are carrying out the work on behalf of TWA. The difficulty about the latter interpretation as an indication of rateable occupation is that on the authority of the Arbuckle Smith case TWA cannot be said to be in rateable occupation of the mineral workings. It is a very unusual feature of the case that the improved hereditament of TWA comes into existence only after the stratum of minerals has been removed and what TWA then occupies is the enlarged hole thereby created.
In challenging the first interpretation, Mr Widdicombe sought to draw a parallel with the circumstances in the John Laing case which established the rateability of huts occupied by contractors engaged in the construction of an aerodrome. The question of rateable occupation of the aerodrome during the period of construction was not raised, but Mr Widdicombe drew a parallel between the aerodrome in John Laing and the reservoir in the present case.
The four necessary ingredients of rateable occupation put forward by Mr Michael Rowe Q.C. (as he then was) were approved by Tucker LJ at page 350:
"First, there must be actual occupation; secondly, that it must be exclusive for the particular purposes of the possessor; thirdly, that the possession must be of some value or benefit to the possessor; and, fourthly, the possession must not be for too transient a period."
In my opinion, these tests are to be applied to the mineral workings in just the same way as they were applied to the contractors' huts in John Laing. Here there is actual occupation by RA. The position is of value or benefit to them, and although Mr Widdicombe reserves his position on the question of transience I cannot for my part see haw the exclusive right to extract minerals under an agreement extending for a term of twenty years can be said to be too transient to establish rateable occupation.
There remains then the question as to whether the occupation by RA is exclusive for their own particular purposes. In order to consider that question I must turn to Mr Widdicombe's alternative submission that since the work being carried out by RA was done under the supervision of TWA, then the authority was in paramount occupation of the stratum of minerals.
Strictly speaking, paramount occupation can be argued only where there are two competing occupations. In the Southern Railway case Lord Russell of Killowen said at page 529:
'Rateable occupation, however, must include actual possession, and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation. Where there is no rival claimant to the occupancy, no difficulty can arise; but in certain cases there may be a rival occupancy in some person who, to some extent may have occupancy rights over the premises. The question in every such case must be one of fact namely, whose position in relation to occupation is paramount, and whose position in relation to occupation is subordinate; but, in my opinion, the question must be considered and answered in regard to the position and rights of the parties in respect of the premises in question, and in regard to the purpose of the occupation of those premises. In other words, in the present case, the question must be, not who is in paramount occupation of the station, within whose confines the premises in question are situate, but who is in paramount occupation of the particular premises in question."
Following the principle established in Arbuckle Smith & Co. Ltd. v. Greenock Corporation [1960] 813 A.C. I do not see how TWA can be said to be in occupation of the bed of the reservoir whilst it is being deepened still less of the stratum of minerals being worked. Nevertheless, it is possible to argue that the principle of paramountcy can be applied to the facts of this unusual case as justifying a departure from the general rule referred to by Lord Denning in Gilbert VO v. S. Hickinbottom & Co Ltd . Mr Widdicombe in support of this argument relies on the very high degree of control exercised by TWA over the operations carried on by RA and there is no doubt that this represents a day to day involvement in the extraction and deepening process.
On the other hand, it is clear that RA have been granted an exclusive right to extract the minerals and neither TWA nor any one else can work the minerals themselves. The principles to be applied in deciding this issue are well set out in a passage in the judgement of Salmon LJ in Field Place Caravan Park Ltd. v. Harding VO [1966] 2 QB 484 at page 502:
"it seems to me that once you come to the conclusion that the caravan with the caravan pitch could properly be described as a hereditament, the well established test as to whether the appellants' occupation of this unit is rateable depends upon four questions. First, are the appellants in exclusive occupation of this unit for the purposes for which they occupy it, namely, residential purposes? The answer to that question is plainly: Yes; and the contrary has not been argued. Secondly, is their occupation so transient that it is incapable of being in rateable occupation? The answer to that question is equally obviously: No" and the contrary has not been argued. Thirdly, was the occupation beneficial occupation? There can be no doubt but that it was. The last question is: If there is a competing occupation, was the appellants' occupation paramount? This is the real question in this case. Here there clearly was a competing occupation because the site operators had some rights of occupation of the pitch. They had no right to go into the caravans. They could, however, at any time enter on to the pitch, inspect it to see whether the grass was properly cut and the place was being kept tidy and decent, and take appropriate action if it were not. They also had the right to move the caravan from one pitch on to another or from one, place to another on the same pitch. It is to be observed, however, that in the particular cases with which we are dealing the caravan dweller had been living in his caravan, on the same place on the same pitch, in some cases for as long as seven years and in no case for less than one year at the date of the proposal, which was in 1962; and the situation has not changed since. That means that in each case another four years or so have to be added on to the duration of the occupation. The mere fact that the site occupier has the rights to which I have referred certainly does not in my judgement compel the finding that his occupation is paramount to that of the caravan dweller. In the Southern Railway case there was a right to move the kiosks to any part of the station or platforms on which they stood without consulting their occupiers, yet the occupiers of the kiosks were held to be in paramount occupation of them and the land on which they stood. Whether or not an occupation is paramount must be a question of fact and degree. There was abundant evidence here upon which the tribunal could come to the conclusion at which it arrived and there would be no justification in my judgement for reversing the decision."
Applying the approach adopted by Salmon LJ to the facts of this case, I express the four questions in this way. First, are RA in exclusive occupation of the stratum of minerals for the purpose for which they occupy it, namely that of winning and working the minerals? That purpose is served by the exercise of rights which are expressly stated to be exclusive, and which by their exercise constitute an occupation which in my opinion is exclusive in fact. No one else is in occupation. The answer to the first question is thus plainly: Yes. Secondly, is RA's occupation so transient that it is incapable of being rateable occupation? In my judgement the answer is equally obviously : No. Thirdly, was the occupation beneficial? There seems to be no doubt but that it was. As to the fourth question, I do not consider that there was a competing occupation, but in so far as TWA exercise some control over operations, that control does not in my opinion amount to a competing occupation. As Tucker LJ said in John Laing at page 356: ''I think the real control exercised by the ministry was a control with regard to the performance of the contract and not a control which interfered with the exclusive occupation of these hereditaments for the purposes of their work by the contractors."
In the Arbuckle Smith & Co. Ltd. v. Greenock Corporation [1960] 813 A.C. case at page 821 Viscount Kilmuir LC said:
"If, therefore, there is no use of premises according to their nature, I find it difficult to see how there is occupation attracting liability for rates."
In the Southern Railway case Lord Russell of Killowen said at page 532:
"In truth the effect of the alleged control upon the question of rateable occupation must depend upon the facts in every case; and in my opinion in each case the degree of the control must be examined, and the examination must be directed to the extent to which its exercise would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them, or would be inconsistent with his enjoyment of them to the substantial exclusion of all other persons."
Finally, in the Southern Railway case Lord Wright referred on page 553 to Cory v. Bristow (1877) 2 App. Cas. 262, a case which concerned the rateability of permanent moorings fixed on the bed of the River Thames. In that case lord Cairns referred to the fact that Messrs Cory were to work to the satisfaction of the conservators under the inspection of the harbour master. He pointed out that Messrs Cory were none the less in rateable occupation because they were required to obey the conservators' by laws, and were to work to the satisfaction of the conservators and subject to definite limitations, and were liable to be ejected on notice.
In my judgement, the control exercised by TWA in the instant case is directed, not towards the manner in which the minerals are to be worked, but rather to the protection of their own hereditament, namely, the reservoir, and the purity of the drinking water which they store therein. TWA, it seems to me, do not interfere with the "use of premises according to their nature", and I see no difference in principle between the control exercised by TWA and the regulations imposed by the Southern Railway on the occupiers of the book stalls at Victoria station or by the Thames Conservators on Messrs Cory. It is perhaps significant that quite stringent controls are also imposed in Clause 24 of the agreement on the work carried out by RA on the adjoining land where rateable occupation is not in dispute.
Finally, I do not consider that the authorities relied on by Mr Widdicombe direct me to any other conclusion. In Allan v. Liverpool Overseers (1874) 9 QB 180 and in Rochdale Canal Company v. Brewster [1894] 2 QB 852 it was found that the dock board in each case had not parted with exclusive possession of the disputed premises so that there was no exclusive occupation by the companies. In the SSAFA case there was a finding that the residents had the exclusive use against anyone other than the Association and the finding that the Association was in occupation was a finding on the facts. In Andrews v. Hereford and in Vickers v. Thornton there was a clear finding in each case that the occupation by the gravel operators and the ship builders respectively was not exclusive.
I have found more difficulty with Greenall v. Castleford Brick and with Cobley v. Horlock. The former case concerned the extraction of material from a colliery spoil heap. The learned President of the Lands Tribunal said:
"It seems to me that this is really a question of fact. Who is the real occupier of the spoil heap? In my opinion, it is the National Coal Board."
In that finding there is no principle of law expressed. The latter case was concerned with the dredging of the River Stour to facilitate navigation and on a first reading has many points of similarity with the instant case. Sir Michael Rowe, the learned President, came to the conclusion that the Conservancy Board and not the dredging company were in occupation of the bed of the River Stour. There was, however, a finding of fact that the whole purpose 'of the contractor being put there by the Board was to improve the navigation" and the President found that there was no actual occupation by the dredging company. The question of paramountcy did not therefore arise. Both these cases were decided on findings of fact which are clearly to be distinguished from those which I have found in the instant case. In my judgement, RA are in exclusive occupation of the mineral workings in the bed of the reservoir for their own particular purposes, and their occupation is accordingly rateable. That rateable occupation represents an extension of the hereditament already entered in the valuation list in their occupation. The valuation officer's appeals are accordingly allowed and an order will be made directing that the entries in the list be increased in accordance with the alternative figures agreed as follows:
The second respondents will pay the costs of the appellant valuation officer such costs failing agreement to be taxed by the Registrar of the Lands Tribunal on the High Court Scale.
References: (1877), 2 App. Cas. 262
House of Lords
Lord CAIRNS LC. : My Lords, the question raised by this appeal is whether the appellants are rateable to the relief of the poor of the parish of Greenwich under a rate or assessment which has been made against them. In the assessment, the description of the property rated is thus given: first, "Moorings to which coal derrick and apparatus, Atlas No. 1, are moored to bed of river;" second, "Moorings to which coal derrick and apparatus, No. 2, are moored to bed of river;" so that the subject matter, in respect of which the appellants are said to be rateable, is, certain moorings by which a certain coal derrick is moored to the bed of the river Thames.
With regard to Atlas No. 1, the case states that it is "moored or retained at the spot where she floats in the following way, viz., by two single fluke anchors on the side nearest the shore, by two stones on the channel side, and by two stream anchors, one at her head, and the other at her stern." It is also stated that having been formerly in another position than that which she now occupies, in moving her from the former position, the four anchors and the chain cables by which she had then been attached to the mooring were removed with her, and two of them were put down again in mooring her at her present moorings, and that those two are two of the four to which I have already referred. It is stated in paragraph 12 that the moorings as actually laid down for Atlas No. 1, consist of "four anchors and two stones" and that of those anchors "the two named in paragraph 8," that is to say, the two which had followed her from the place where she previously had been moored, which had been taken on board and brought with her, those two are "small and of little importance." "And it is not contended on the part of the defendant that any liability to be rated in respect of the soil occupied by them attaches to the plaintiffs." I ask your Lordships' attention to that, because it appears that there are two of these anchors, which are part of the equipment of the ship, and followed her from her previous moorings, and are dropped at her present moorings, and it is not said that they constitute any moorings in respect of which rateability will arise.
"But the other two anchors are made with only one fluke each, and are such as are never used as anchors on board ship, but are only used for permanent moorings. Anchors with one fluke could not be trusted to take the ground when dropped in the ordinary way. In laying down each of these anchors, a hole was dredged out large enough to contain the whole of the anchor, and to a depth between seven and eight feet below the river. The anchor was then carefully laid on with the fluke downwards, and the hole was afterwards filled up to the level of the bed of the river with ballast, which lies all round and over the anchor, through which ballast the chain cable is led up to the derrick."
Then the 13th paragraph states,
"The two stones used are each of them about seven feet long by five wide and three thick. In order to put each of these in their places a hole was dredged out large enough to contain the stone, and about seven feet deep. The stone was then let down into the hole, and the hole then filled up to the level of the bed of the river with ballast. There is about a four feet thickness of ballast on each stone, and about seventy tons of ballast are used in each hole, a chain cable is led up through the ballast to the derrick. The moorings formed by these two anchors and stones are as firm moorings as it is possible to place in the river. It is quite impossible that the derrick using them can weigh them in the ordinary way in which ships weigh anchor. If the derrick had to be moved, it could only be by casting off the cables and leaving these anchors and stones behind."
Now, my Lords, by whom was this work done of embedding these moorings in the soil of the river? That is stated in the 11th paragraph
"Instead of themselves laying down the moorings contemplated by the said resolution" (to that I shall afterwards have to refer it is the resolution authorising this work), "the plaintiffs caused and procured the necessary work to be done by the workmen of the said Conservators, and paid the said Conservators the whole of the costs and charges of the materials and labour expended in and about the same."
Therefore your Lordships will take it that it is just as if the present appellants had themselves, by their own servants, purchased the materials which were necessary for these moorings, and then by permission of those who could authorise them, laid the moorings down in the bed of the river.
With regard to the other moorings, there is some difference in the way in which they have been made. As to them, your Lordships find this statement in the 16th paragraph:
"The material position of the moorings of 'Atlas No. 2' consists of two anchors, similar to the anchors mentioned in paragraph 12, but having iron instead of wooden stocks," "but instead of the stones used for 'Atlas No. 1' two large fan shaped screws have been used. These are screwed into the bed of the river to a depth of ten feet, in the manner shown upon the plan marked 'A', annexed hereto, which is to be taken as part of this case. These screws, together with the two single fluke anchors, form moorings as permanent as those used for 'Atlas No. 1,' and it would be equally impossible for the derrick using them to weigh them in the ordinary way."
Those, my Lords, being the facts with regard to these moorings, I will in the first place ask your Lordships to observe how completely they differ the case from one which was referred to in the argument, a case in which the present appellants appear to have been the plaintiffs on a former occasion against the same defendants, the overseers and churchwardens of Greenwich. That case is reported; it is Cory v. Greenwich Churchwardens. The facts of that case were these: There was a derrick which, as regards that which was above water, appears to have been of the same character as those which I have just mentioned, and it was moored in the river, but it was moored simply in this way: "by two single fluke anchors on the side nearest the shore, and by two stones on the channel side, and by two stream anchors, one at the head and the other at the stern. The anchors and stones were merely dropped into the river, no force being used for the purpose of fastening either anchors or stones. Before dropping the stones, a small quantity of ballast was removed in the bed of the river, so that the stones might lie flat." My Lords, under these circumstances, it was held that the moorings were not immovable from the bed of the river, that they were only, as the late Mr. Justice WILLES expressed it, "part of the equipment of the vessel itself," and that therefore there were no moorings which could be said to be fixed to the soil of the river and to be occupied as part of the soil by the plaintiffs.
That, my Lords, I think, puts aside that authority, and will enable your Lordships, having regard to the facts which are found in the present case, to arrive, as I think you will, without hesitation, at the conclusion that you have here moorings which are clearly fixed into and bedded in the soil of the river Thames, just as much as if piles had been driven ten or twenty feet deep into the soil, and that if you find any person in occupation of those moorings, and that occupation is a beneficial occupation, the person so occupying is occupying hereditaments within the statutes which create chargeability to the assessment to the poor.
Well, then, my Lords, there arises the other question. Who is the occupier of these moorings? In the first place, to whom do the moorings belong? Unquestionably they belong to the present appellants. They do not belong to the Conservators of the river, they were not paid for by the Conservators of the river, they were provided by the appellants out of their own money, and put down at their own expense. And this circumstance differs the present case most materially from the second case, which was very much pressed in argument upon your Lordships. I mean the case within the jurisdiction of the Conservators of the river, the case of Watkins v. Milton Overseers.
In that case there was a coal hulk which was moored in the River Thames for the purpose of containing about 1600 tons of coal which were put out of lighters into the hulk and then again distributed, as occasion required, in other lighters when wanted for use. This hulk was moored in the river Thames within the parish of Milton, near Gravesend, and it was moored in this way: There were two screw piles driven into the bed of the river, driven in by the Conservators, and belonging to the Conservators, and a license or permission was granted by the Conservators to the owner of this hulk to moor or attach his hulk to these piles so driven into the bed of the river. It does not appear from the agreement in the case that this was an exclusive permission given to the owner of this hulk only; and if I were to judge by the agreement alone, I should have said that it might have been in the power of the Conservators either to have attached a vessel of their own, if they had one, to the same screw piles, or to have allowed some other person to attach a vessel or hulk of his. However, I see that the learned judges assume that it ought to be looked at, and therefore I prefer to look at it, as if exclusive permission had been given to the owner of the hulk to attach, as in point of fact for several years he had attached, his hulk to the piles.
But, my Lords, that case turns entirely upon this, that the owner of the hulk, who was the person rated, was not in occupation of these moorings. The moorings were not his the moorings were the moorings of the Conservators, and the Conservators, having these moorings belonging to themselves, gave him the permission to attach his hulk to these moorings. The court held, and I will assume rightly held, because it does not bear in any way upon the facts of the present case, that that was merely a permission to attach the hulk to the moorings of the Conservators, and that there was no occupation by the owner of the hulk of the moorings of the Conservators.
My Lords, be that case correctly decided or not, it has no bearing upon the facts of the present case, where your Lordships find moorings put down by the appellants, paid for by the appellants, belonging to the appellants, used by the appellants, and used by the appellants alone, and with regard to which either you must arrive, as it seems to me, at this conclusion, that they are occupied by no person whatever, or if they are occupied by any one, that they are occupied by the appellants.
But, my Lords, it remains to look more accurately at what is the character of the occupation of the appellants, and how it is that they come to have the occupation of these moorings. For the purpose of rating it might indeed be sufficient to look at the mere fact of occupation. They are found in occupation of that which is to them a valuable occupation of this fixed property, and are therefore rateable to the relief of the poor, even though it might turn out that their occupation is a wrongful one, or one the propriety of which they cannot justify. But when your Lordships look at the circumstances under which they have come into that occupation, it appears to me that their possession of the moorings is a rightful one, and is itself to be designated, according to the most accurate expression, an "occupation" of the moorings. Their occupation arises in this way: the Conservators of the Thames, as your Lordships well know, have, under the Act of 1857, carried over to them, and brought into their proprietorship, all the rights in the bed and soil of the River Thames which belonged to the Crown, or which were claimed by the Corporation of London. They are made the guardians, as it were, of the navigation of the Thames, and the protectors of the bed and soil of the Thames for the purpose of the navigation. They have certain powers very large powers given to them for the protection of the navigation; they have certain powers for making bylaws to protect the navigation; they have powers to make piers and landing places for the accommodation of the public; and they have powers to authorise riparian owners to make landing places, and wharves, and jetties, and to put down mooring chains and moorings for the better and more convenient enjoyment of, and access to, their lands.
The course which in this particular case appears to have been taken was this: an application being made by the appellants Messrs. Cory & Son, to the Conservators, a resolution was passed in these words:
"That permission be given to Messrs. Cory & Son to lay down moorings (at which they may place derrick hulk) immediately opposite the sluice next eastwards of Angerstein's Wharf, East Greenwich, and 510 feet from the river wall at the sluice as per plan, the work to be done to the satisfaction of the Conservators of the River Thames and under the inspection of the harbour master, and to remain on the following conditions being agreed to and observed by Messrs. Cory, viz., that the accommodation be assessed, and the rent paid thereon,"
that is to say, that the clause of the Act of Parliament should be complied with which provided that none of these permissions should be given to any riparian proprietor as a matter of favour or of indulgence, but merely upon the proper assessment by the proper officer as to the value of the permission given;
"that the hulk be not used for the purpose of storing coals; that it be for the general use of the coal trade, but the barges to or from the hulk be in all cases towed by a steam tug to or from the Custom House, London; that all vessels leave the hulk immediately after being discharged, and that sailing colliers when discharged be towed away to such part of the river as the harbour master may direct, and in all other respects to be worked to the satisfaction of the Conservators under the inspection of the harbour master; and with the full understanding on the part of Messrs. Cory, that if at any time hereafter it shall be found by the Conservators inexpedient to permit the moorings for the derrick hulks to remain in that or any other part of the river the Conservators will, under the powers vested in them by the 91st section of the Thames Conservancy Act, cause the same to be removed,"
that is to say, Messrs. Cory are warned at the end of this agreement that the Conservators will retain the statutory right given them by the 91st section of the Thames Conservancy Act of causing the moorings at any time they think fit to be removed on giving a week's notice; but, subject to that right of removing them by their statutory power at a week's notice, the moorings will be allowed to remain, the rent assessed upon them being regularly paid.
Now, my Lords, as I read that, putting aside the words and looking at the real substance of the transaction, I cannot look upon it as otherwise than an exercise on the part of the Conservators of their parliamentary powers, by giving to Messrs. Cory a right to lay down these moorings, and also a right, after the moorings are laid down, to occupy them through the instrumentality of this derrick, until, in the exercise of the same parliamentary powers, and upon a week's notice being given, the Conservators shall remove them from their occupation.
Therefore it seems to me that your Lordships have here a fixed property found in the occupation of the Messrs. Cory to an occupation of which fixed property no person else can set up any claim, and that done under an exercise by the Conservators of powers which appear to me to provide for and to authorise, if it were necessary to find authority for it, an occupation of that particular kind.
On the whole, my Lords, I must say I am entirely satisfied with the unanimous judgement of the learned judges of the Court of Appeal, and I submit therefore to your Lordships that this being a case of error, judgement here also should pass for the defendant in error.
Lord HATHERLEY :My Lords, I take the same view of this case which has been expressed by my noble and learned friend on the woolsack.
The two questions to which, as it appears to me, we have to direct our attention, and to which indeed our attention has been most ably directed by Mr. Thesiger and Mr. Patchett are these: first, what is the nature of the interest conferred by the agreement or permission set forth in the case before us; and secondly, when we have ascertained the character of that interest, what is the nature of the occupation which has been exercised by the appellants in this case?
As Lord CAMPBELL expresses it in one of the cases last cited, as regards the nature of the occupation the question is, whether it be "a permanent and profitable occupation of land within the parish" which seeks to assess the person in respect of such occupation. As regards the interest of the person who is so to be rated it must be an interest in himself exclusively. On the first part the argument turned upon the latter branch of the case, namely, whether the appellants had got such an occupation under this instrument as would make them liable to rating. I apprehend that in ascertaining the answer to that question the courts have not meant by the term "exclusively" that the interest may not be determined on certain terms and conditions, but merely that the person so occupying should have the right unattended by a simultaneous right of any other person in respect of the
same subject matter.
An illustration has been given in the course of the argument, which is commonly given in cases of this character, that of a landlord of an hotel, or the landlord of a lodging house, in which case although a person sleeping at the hotel may have the exclusive use of his bedroom for the night, or the exclusive use of a sitting room during the day, or a lodger the exclusive use of the chambers he occupies, still there is a concurrent right reserved by the landlord of the hotel or the person who lets the lodgings, of using the hotel or lodging house for whatever purposes he may think fit for managing the establishment and all purposes connected with it. That is not such an occupation on the part of the lodger or the guest at the hotel as would make him liable to be rated.
But in the present case all the argument has turned upon this, that independently of the question whether or not this be a license or in the nature of a demise, inasmuch as there are certain bye laws which may be made from time to time by the Conservators, who have given this permission, and inasmuch as by the 91st section of the Act the power of any person to have this beneficial occupation may be determined on a week's notice, therefore, there is not conferred on the Messrs. Cory the exclusive possession of these mooring chains which they have been in the river as is described in the case. I apprehend my Lords, that it would be a confusion of ideas to say that it interferes with the exclusive possession any more than a right of re entry on the part of a landlord in certain given events could be said to interfere in any way with the right of the tenant during the time he is holding. He is in beneficial occupation for a term, though that term is limited by certain contingencies which may possibly determine his interest at an earlier period.
Now, my Lords, what is done by this agreement? A permission is granted to Mr. Cory to lay down mooring chains according to the powers vested in the Conservators pursuant to the 58th section of the Act; and when laid down they are to remain. He is to do that at his own expense, and he is to do it to the satisfaction of the officers appointed for that purpose by the Conservators, a phrase which would not be used with respect to any work they were to do themselves. That approbation is to be obtained, because the person who is to do this work is a person who is to make his mooring chains in such a manner as would be satisfactory to the Conservators, and when he has done that they must remain, unless a notice be given pursuant to the 91st section, or unless a change is made by the bye laws, he being subject possibly to the bye laws which may be made by the Conservators for the better regulation of their business. But independently of these bye laws, independently of anything arising upon the 91st section, the mooring chains are to remain, and during the whole of that time he is in exclusive possession and in permanent possession in the sense in which that word is used in cases of this description, and in profitable possession.
I cannot find anything on the face of the instrument that can intimate any doubt at all upon that being the character of his possession, the remaining of these mooring chains, of which he is to make use, being secured to him subject only to those contingencies which he has agreed upon, but the possession being full and complete until those contingencies occur.
It was observed by Mr. Patchett, just now, that in Watkins' Case the Conservators did the work, and he said, "So they did here"; but that really is a fallacy, and a transparent fallacy. They did not do any portion of the work here; it was simply that instead of hiring another set of labourers the Messrs. Cory hired the labourers of the Conservators, which I apprehend they were at perfect liberty to do, if the Conservators were willing that they should be so employed; and they paid the Conservators for those labourers whom they so employed in execution of the work. In other words, the Messrs. Cory did the work through the medium of employing a particular agency; that agency makes no difference in their position. The work was entirely done by the Messrs. Cory, and they having done this work, all the other conditions in the agreement were also fulfilled, one of which was that the rent was to be assessed in the course provided by the Act, which was done, and it was assessed at a tolerably high figure. All that having been done, it seems to me that Messrs. Cory became the owners, and, subject to the events which might determine the ownership under the permission, the sole and complete owners of this profitable tenement.
Then the question arises, are the Messrs. Cory the owners in the sense of being occupiers of land situate within the parish? My Lords, I can have no doubt upon that point when I look at the nature and the character of these mooring chains. They are described in the papers before us, and the case is thereby at once differed from two or three of the cases which have been cited, one being with reference to a floating dock, and another being with reference to an arrangement by which these mooring chains were sunk as they were sunk here, but fixed so far less than here, that they were capable of being moved like other anchors, whereas here they were sunk and fixed, and would have to be hauled up by means of machinery in a derrick. That alters the present case from the case of a floating dock which is, as it were, a vessel floating about upon the water, and which cannot be said to have any immovability whatever in any given parish, and so can hardly be subject to rates. The circumstances in the other case that the derrick itself, by its own instrumentality, could haul up the stones and mooring chains just as it could any anchor, reduced it again to the case' of a ship, of which it could not be predicated that it occupied land situated within a parish.
But here we are told by the case itself that the derrick cannot be removed at all except by slipping its chain and cables, because the stones and the rest of the apparatus are so fixed in the bed of the river as to prevent their being hauled up or got up, except by some much more energetic mode of removal. It is not a nice question here, as was said in part of the argument, between the possibility of moving a more or a less great weight, but these circumstances indicate the intention, from the very first, of all the parties to the agreement that it should be a fixed and permanent mooring chain, subject only to such contingencies as might arise in the execution of the works of the Conservators, if anything should occur to require its removal.
My Lords, I think that none of the cases has been in the slightest degree brought up to such a case as we have here before us. I cannot have any doubt whatever that there is a permanent beneficial interest liable to be divested in certain given contingencies as I have described, that it is a valuable and an exclusive interest, and that it is an interest situate in the bed of the river within the parish of Greenwich; and therefore that it is liable to be rated.
Lord O'HAGAN: My Lords, in this case there is no real conflict about legal principle. All the judges of the courts below have agreed as to the grounds of rateability.
The occupation to which it is attached must be an actual, an exclusive, and a profitable occupation. The only question is, whether the Messrs. Cory had such an occupation? I think they clearly had, and were therefore liable to be rated.
It is not necessary to consider the nature of the powers of the Conservators for the purpose of the argument; but if it were, I have no doubt that they acted within those powers in their dealings with the appellants. Under the 50th section of the statute they had vested in them all the interests of the Corporation of London and the Crown in "the bed and soil" of the River Thames, with authority to make jetties, piers, and landing places, and to permit the construction o such moorings as are the subject of our inquiry.
Exercising their statutable powers, they entered into a bargain that for certain considerations, the Messrs. Cory should have liberty t plant their moorings in the bed and soil of the river, with an understanding that if the Conservators should at any time find it inexpedient t permit those moorings to remain, they might cause their removal under the 91st section of the Thames Conservancy Act, by giving week's notice. The Messrs. Cory proceeded with their work, and completed a large and costly erection, digging down several feet in the be of the river filling the excavation with great stones, passing heavy chains through them, and piling on the whole some seventy tons of ballast. All this was done with their own money and under their own control, and the erection so completed was their own property. The Conservators did not spend a penny or do an act in the course of the construction, or meddle in any way with it when it was completed. It remained in the hands and under the full domination of those who had created it, subject to the right of removal of the Conservators, when they might find it desirable to fulfil the statutable conditions for that purpose.
In this state of undisputed facts, it appears to me that the Messrs. Cory had an occupation, an actual occupation, an occupation of a very real and substantial kind, and an occupation which was not merely actual but rightful, fairly purchased, and warranted by law. If the occupation was not in them, it was in nobody; and I cannot, in my view of the circumstances, concur with some of the learned judges in holding that the occupation, actual or constructive, remained in the Conservators. If, by their permission, a great stage had been put upon piles driven into the river's bed for twenty or thirty feet, to which the Messrs. Cory only could have access as they only had erected it, or if a great house had been built with the same license and in the same way, having its foundations in the river, the Conservators might as well have been called the occupants of both, though neither belonged to them, and upon neither could they have entered for a moment.
There was, therefore, in my judgement, an actual occupation in the Messrs. Cory, and if their occupation was actual, it was exclusive. The license or permission, call it what you will, under which the moorings were created, was not to be capriciously determined at any instant, or without the formal notice prescribed by the statute; and until that notice was given, the Conservators, if they had ventured to intrude upon them, would have acted illegally and been liable to answer in an action. For the time, and subject to the conditions, the Messrs. Cory were exclusive occupants as completely as if their occupation had been of their own fee simple estate,
Then, if the occupation was actual and exclusive, it was confessedly profitable, and so had all the qualities needful to render the occupants subject to the rate.
Mr. Thesiger ably urged the public importance of preserving to the Conservators the control of the river, and the inconvenience of the construction which would recognise the exclusive occupancy of the appellants; and he pressed your Lordships to regard the irregular form of the contract, spelt out from a resolution and a letter, as diminishing its force. But that contract, although so established, is clear and specific, and the effect of its express provisions cannot be destroyed because of any allegation of its interference with the interests of commerce. The Conservators had perfect legal right to do what they did; their bargain equally bound them and those with whom they dealt, and we must accept its terms and their consequences. Besides, I confess I fail to see the superior advantages in a social point of view of the view of the appellants, for unless the provision as to this statutable notice was a mere nullity and this has not been asserted it undoubtedly limited and suspended the control of the Conservators over the bed of the river, and that result, if an evil one, could not be avoided on either view of the case.
On the whole I am of opinion that the judgement of the court of Appeal ought to be sustained.
Lord BLACKBURN: My Lords, I am of the same opinion.
Neither the Court of Common Pleas in this case, nor the Court of Appeal, entertained any doubt that there was an occupation of land here, so that the parties might be liable to be rated. Upon that I will only make one remark, to show that the case of Messrs. Cory against the churchwardens of Greenwich, in which the Court of Common Pleas had, upon this very same rate and very same derrick, decided that it was not rateable, is really not, in point of law, in conflict with the decision of the present case, either as it was determined by the court below, or as it will now be affirmed by your Lordships. The manner in which the case was raised was different, and that made a difference in the result. In the former case, Cory v. Greenwich Churchwardens, the churchwardens went before the stipendiary police magistrate and asked him to enforce the rate. Upon hearing the case he thought that the Messrs. Cory were rateable, and he did enforce the rate. Then he was required to state a case for the Common Pleas, which case he stated, giving powers (I suppose by consent of the parties) to the Court of Common Pleas to draw all inferences of fact from the case so stated.
How they came to be so stated as they were I do not know; but, on the facts as appearing upon that case, the Court of Common Pleas, as then informed, drew the inference of fact that this derrick was no more occupying the land than any ship whose anchor has been dropped upon the ground, and which rides at anchor, can be said, in the legal sense of the term, to have an occupation of the ground. If that representation of fact was right, the conclusion of law would follow, that the Messrs. Cory did not occupy any land and could not be rated. That much was clear. Whether or not that conclusion was properly drawn from the evidence as stated by the magistrate is not a question now before your Lordships, and we need not form any opinion upon it. If the representation of fact was correctly made, the conclusion of law that the Messrs. Cory were not rateable would be perfectly irresistible.
But now, my Lords, that having taken place upon the very same rate, the parties raised the question in a different way, which also they had a right to do. The magistrate, after the decision of the Court of Common Pleas, of course refused to grant his warrant of distress; but the overseers had a right under the Act which is commonly called Jervis's Act to come and get a mandamus, or rather a rule in lieu of a mandamus, for the purpose of raising the question before a jury, and ultimately, as they have done here, before this the final Court of Appeal. That course having been taken, an action having been brought, the facts were more accurately determined; and what your Lordships have now to do is to see what is the effect of the facts as found and stated at the trial, not as found and stated by the magistrate previously. Taking the facts as they are found now, I apprehend that no one of your Lordships could for a moment doubt that here there was a complete occupation of the soil (whoever it was that occupied it), by the derrick occupying by means of. those moorings which were fixed in the soil, I think I may say quite as permanently as the foundations of an ordinary house would be fixed. No doubt they were capable of being removed and taken up, and so the foundations of a house would be, still it is clear that they were fixed and occupying the soil.
My Lords, the only other question was, who was the occupier? Were the plaintiffs merely persons having an easement without occupying, or were they the rightful occupiers? Upon that, my Lords, I do not think it necessary, nor would it be becoming in me as I was one of the judges in the court below, to say more than that I have not seen any reason to change the opinion which I then formed, as one of the judges of the Court of Appeal, namely, that the plaintiffs are the occupiers, and that as such occupiers they are properly rateable; and that I understand to be the opinion of all your Lordships.
Birmingham CC v Hughes & Knighton & Rhayader Rural DC 1957 SSAFA v Merton Corp. 1966 Forces Help Soc. & Lord Roberts Workshops v Canterbury City Council 1979 Thomas v Witney Aquatics Co Ltd 1972 William Press & Son Ltd v Cayford 1973 Cumbria County Council v Sture 1974 Brook v NCB 1975 Pennard Golf Club v Richards 1976
References: [1976] RA 203
Lands Tribunal
The appellant golf club, known as the Pennard Golf Club, occupy a golf course at Southgate on the Gower Peninsula. The land was formerly within the rating area of Gower Rural District but following local government boundary changes is now within the rating area of Swansea City. The club is an unincorporated members' club so that, strictly speaking, the appeal should be lodged in the name of the trustees of the club but no point is taken on this. The respondent is the valuation officer responsible for the valuation list for the city of Swansea and he was responsible for the valuation of the appeal hereditament entered in the valuation list at £1,125 rateable value. Following a proposal made on behalf of the ratepayers on the 19th September 1973 the West Glamorgan Local Valuation Court determined an assessment of £1,040 rateable value, its decision being given on the 1st October 1974. The ratepayers being aggrieved appeal to the Lands Tribunal. They accept that they are in rateable occupation of the clubhouse and premises but contend that there is no rateable occupation of the golf course and that, in any event, the assessment determined by the local valuation court is excessive.
Prior to the hearing the parties agreed alternative values as follows:
If the whole constitutes a single rateable hereditament the correct assessment should be £970 rateable value. If the golf course does not form part of a hereditament in the rateable occupation of the ratepayers then the clubhouse and premises should be assessed at £526 gross value £410 rateable value.
It will be seen therefore than that the question at issue can be simply stated: Is the golf club in rateable occupation of the golf course?
Pennard Golf Links, which occupy some 250 ac or thereabouts, lie on the southern coast of the Gower Peninsula some 8 miles west of Swansea. It is an 18 hole course with clubhouse and a professional's shop; the total length of the course as shown on the club scoring card is 6,266 yd. It has many of the characteristics of a typical seaside links course and abuts at its south western boundary on to seacliffs above Pobbles Beach. The golf course is traversed by some 16 public footpaths (of which two are also used as cart tracks) all appearing on the definitive map held by the West Glamorgan County Council. Additionally the links are included in the register of common land held by the county council in accordance with the provisions of the Commons Registration Act 1965. Some 48 claims have been registered under the Act and although formal objection has been lodged by the club to all claims, the club recognises that many of these claims are genuine and perhaps as many as 30 will be difficult to defeat.
It appears that the game of golf has been played over the land from about 1896 and a club was formally constituted in 1908. Early documents of title were largely destroyed by enemy action in 1941 but it is not disputed that for many years the freehold of the land has been vested in a company known as Pennard Burrows Ltd. The shareholders of this company were originally persons who had advanced money to the club but over the years all the shares have gradually been acquired by the trustees of the club. The company on various occasions in the past has granted a lease of the land to the trustees of the club, the last formal lease apparently running for a term of four years from the 5th March 1949 and since the expiry of that lease it appears that the trustees of the ratepayers have been holding over and currently pay a rent of £1 pa to the company.
Mr Diehl for the ratepayers called evidence from Mr C W Hutchinson FRICS, a partner in Messrs Gerald Eve & Co who in addition to advising the ratepayers on rating matters has been a member of the club for 25 years and plays regularly over the course. I also heard evidence from the president of the club, Mr H E Davies, and from five other members including two past captains and the lady captain. The evidence of these witnesses was directed to establishing that there was serious interference to the quiet enjoyment of the golf course. This interference came from a number of sources. Firstly, as many as 50 ponies grazed over the links in exercise of their owners' rights of common. In order to protect the greens it was necessary to surround each green with a low single strand post and wire fence. Secondly, the extensive use by members of the public of the footpaths, This was made worse because, although most of the footpaths followed the perimeters of the golf course (there were three shown on the definitive plan which cut across the middle of the course), the public did not stay on the paths, many of which were in any case ill defined, but tended to wander at will over the course; the presence of the ruins of Pennard Castle and of an ancient church near the 7th green being a source of attraction. The third main category of disturbance came from an assorted collection of trespassers, marauders and unruly visitors.
The respondent valuation officer, Mr D G Richards FRICS, and a member of his staff, who had also played golf over the course on various occasions, did not seriously challenge the evidence put forward on behalf of the ratepayers except in a matter of degree. The valuation officer pointed out that the incidents referred to by Mr Davies had to be measured against the length of time, 55 years, during which he had been a member of the club. I am satisfied, however, that in recent years the interference has become greater and I was particularly impressed by what was said regarding the route followed by the public in fairly large numbers on fine days in the summer months to and from Pobbles Beach along the edge of the 17th fairway.
Counsel for the ratepayers accepted that three of the four ingredients of rateable occupation as adopted in J. Laing & Son v. Kingswood A.C were satisfied; firstly, that there was actual occupation or possession by the club, secondly, that the possession was of some value to the club, thirdly, that it was not for too transient a period. But, said Mr Diehl, in the light of the evidence it was not possible to say that the occupation or possession was exclusive. He pointed to the occupation of the land by the commoners in exercise of their rights of grazing and the widespread use of the course made by members of the public. Counsel relied in particular onPeak (VO) v. Burley Golf Club and Harding (VO) v. Bramshaw Golf Club, a case in which two golf clubs were held not to be in rateable occupation of land in the New Forest.
The solicitor for the respondent valuation officer, Mr McDonagh, referred to the leading cases on rateable occupation, Westminster City Council v. Southern Railway Co., Holywell Union v. Halkyn Drainage Co and also to Pimlico Tramway Co v. Greenwich Union and Margate Corporation v. Pettman.
Quite clearly occupation in order to be rateable must be exclusive and that means that the person using the land has the right to prevent any other person from using it for the same purpose. Furthermore, the authorities indicate that in law two separate persons may be in exclusive occupation of the same land through the exercise of simultaneous though different rights (see, for example, the Halkyn case (Holywell Union v. Halkyn Drainage Co) and Lancashire & Cheshire Telephone Exchange Co v. Manchester Overseers.
In the present case it is contended for the ratepayers that the golf club are not in exclusive occupation of the golf course, firstly because of the exercise of common rights which in practice means the grazing of ponies on the land; secondly, by virtue of the exercise by the public of rights of way; and, thirdly, by what I understand is alleged to be occupation by the public as trespassers. Taking first of all the competing occupation by the commoners, were it not for the judgments in the Court of Appeal in the Burley Golf Club case to which I will return presently, I would have had no difficulty in deciding that this represented occupation of the land for a different purpose and although it represented an interference with the enjoyment of the land by the golf club it could not be said to interrupt the exclusiveness of the occupation of the golf course as a golf course. As to the exercise of the rights of way I need to look no further than the passage in the judgment of Blackburn J in the Pimlico case when he said (1873) LR 9 QB 9,14:
"I also agree with what was decided in the case of R v. Jolliffe that where a person merely enjoys a right to go across land in the sense of a right of way or way leave, he is not in occupation of the land and is not rateable."
It is true that in the Halkyn case the drainage company were held to be in rateable occupation of the tunnel which they used under the grant of an easement by the landowner; but in that case the rateable occupation by the company turned not on the fact that they made use of the tunnel under the grant of an easement but rather on the fact that they were in actual possession of the tunnel and that the use which they made of it amounted to occupation which was paramount, any rights retained by the landowner being subordinate.
With regard to the third matter, i.e.. the many acts of trespass committed by members of the public, it is only necessary to observe that in rating law there is no such thing as rateable occupation by the public at large. As Lord Halsbury LC said in Lambeth Overseers v. London County Council [1897] AC 625, 630:
"The 'public' is not a rateable occupier; and I think that one sentence disposes of the case."
In the present case I do not consider that the members of the public can be said to be in occupation of the land over which they trespass, still less that they are in rateable occupation of it. If that be right then there can be no occupation to challenge the exclusiveness of the occupation of the golf club. The documents to title indicate that the company own the freehold of the land subject to the rights of the commoners and the rights of way. I am also satisfied although the matter is not expressly set out in the original lease that the ratepayers occupy the golf course subject to the same conditions. From the evidence it emerges quite clearly that the ratepayers fully recognise their right to exclude trespassing members of the public although they have given up trying to do so. Many years ago a ranger was employed at certain times during the week to keep the course clear. Nevertheless, members of the public are permitted to play golf only after payment of green fees and nearly £1,000 was taken in this way in each of the years 1972 and 1973. Over the years it appears that unauthorised golfers have been detected on about four occasions but they were clearly recognised as trespassers. Indeed, in the 1936 lease between the company and the club trustees, the trustees covenanted, inter alia:
" 7. To use the demised property as golf links and clubroom with the requisite ancillary buildings for the convenience of members of the club and their staff only or for such other games or recreations, if any, as may be sanctioned or approved from time to time in writing by the company."
I referred earlier to the Burley Golf Club case and I must now return to it in greater detail. In that case it was held in the Court of Appeal that the two golf clubs involved were not in rateable occupation of the golf courses since they had no exclusive right of user by reason of the rights of the commoners and their inability to exclude the public. (There was a further ground on which the findings were based in respect of the Bramshaw Club which has no relevance to the present appeal.) But whereas in the present case the golf club [the ratepayers) occupy under a lease which grants them the exclusive right to play golf which they in fact exercise, in the Burley case the two golf courses were situated on Crown land within the New Forest and the clubs used each course under a licence from the Forestry Commissioners who managed the land on behalf of the Crown. In the case of the Burley Club it was stated that the permission granted should not afford exclusive rights of user over the course and the evidence in both cases was that some members of the public who were not members of the club played golf over the courses but refused to pay and the clubs did nothing about it. Although Harman LJ appeared to regard the rights of the commoners who exercised rights of pasture over the course as evidence that no exclusive right existed for the benefit of the golf clubs, Pearce LJ said:
" In practice, the clubs do not prevent unauthorised persons playing on the courses. Nor, I think, do their licences give then any right to do so as long as the Crown allows the public free access to this part of the forest. I cannot agree with the suggestion that the Crown by granting the licence are impliedly forbidding the public to play golf on the course or giving to the licensees an implied authority to prevent the public from doing so."
And a little later in a reference to the members of the public who walk, picnic and park their caravans:
"The club has no right to prevent them and although their present on the course is directed to a different end from the purposes of the members, it does I think constitute some interference with the club's occupation for its particular purposes."
I think that the Burley case is to be distinguished on the ground that the clubs there made use of the golf courses under licences, one of which was expressly, and the other by implication, not exclusive. In my judgment the facts in the Pimlico case bear a closer relationship to the facts in the present case. In that case a tramway company under powers contained in the Tramways Act 1870 laid down a tramway in a highway the soil of which was vested in the district board. The company enjoyed the exclusive use of the tramway for carriages with flange wheels to run on the rail. By s 57 of the Act the company was not to acquire any right other than that of user of any road in which their tramways were laid; and by s 62 nothing in the Act was to abridge the right of the public to pass along or across every part of any road in which the tramways were laid. As Blackburn Jsaid (1873) LR 9 QB 9,14:
"Clearer words can hardly be used than that for the purpose of saying that the rails are laid down entirely to facilitate that purpose the use of the rails for the movement of carriages with flange wheels] and for that purpose the promoters shall have the exclusive right of user."
Lush J said at p 15:
" The tram rails occupy a portion of the soil; they are exclusively used by the tramway company for the purposes of the tramway, and that I think makes them occupiers of that portion of the soil. I do not think they are the less occupiers because the public still have the right of passing over the surface of their iron road. The road as a tramway is in their exclusive use and used for their exclusive benefit; therefore I agree in thinking they are occupiers, and must be held to be rateable."
In the present case there is clearly some interference which disturbs the harmless pursuit of the golf ball around the golf course at Pennard Burrows, more particularly perhaps on fine summer weekends. Such interference in my opinion goes to matters of valuation and not to rateable occupation. In my judgment the occupation by the golf club through their trustees of the golf course exclusive for their purposes just as the rails were held to be inclusive occupation of the Pimlico Tramway Co. No Other person is in occupation of the golf course qua golf course and, in so far as the exercise of the commoners rights may be said to be a competing occupation of the land it is in my opinion clearly subordinate.
Accordingly, I hold that the appeal hereditament is in the rateable occupation of the ratepayers and since there is no dispute on the value I determine that the entry in the valuation list be am
Greater Manchester PTE v Carter 1981
R.A. 271; [1982] J.P.L. 46 .
Brook(VO) v Greggs plc & others 1991
References: [1991] RA 61
Lands Tribunal
This appeal is concerned with a market hall in the centre of Manchester and whether it should be assessed as a single hereditament or a number of separate hereditaments, 164 in all.
On the 17th May 1985 the valuation officer made a proposal to alter the valuation list for the Manchester Metropolitan District rating area by the deletion of the existing entry which was "Market Hall and Premises, High Street, Manchester, £65,000 gross value, £54,138 rateable value" and the insertion of 164 proposed entries.
The grounds on which the proposed alteration was supported was that "the hereditament at present shown in the valuation list now constitutes 164 separately rateable hereditaments which should be assessed accordingly."
On the same date copies of this proposal were served on the occupiers of the various stalls within the market as well as on the owners and on the rating authority. 110 objections to this proposal were received including one from the City Estates Valuation Officer on behalf of Manchester City Council.
The resultant appeals were heard by the Greater Manchester (South) Local Valuation Court on the 6th August 1986 and on the 22nd October 1986 that Court confirmed the existing valuation list entry. The valuation officer appeals to this tribunal against that decision claiming that the proposed assessments, as amended, on the 164 separate rateable hereditaments, should be entered in the valuation list. 50 stall holders or joint stall holders and the Manchester City Council responded to the valuation officer's notice of appeal by lodging notices of intention to appear at the hearing of the appeal.
Mr D Jaggi, of the Solicitor's Office, Inland Revenue, appeared for and called the valuation officer Mr Arthur Brooks FRICS.
Mr M Driscoll of counsel appeared for the City of Manchester and called Mr Allan Hartwell, the retail market manager employed by the Manchester Corporation.
Mr M B Kenworthy, solicitor, appeared for Greggs PLC and other stall holders.
The parties have commendably agreed a very full statement of facts, plans and photographs and it is only necessary for me to refer to the following:
The appeal premises comprise 190 market stalls (including a cafe in the north west corner) a manager's office, security mess room, cleaner's store, staff restroom and 33 storerooms. At the time of the proposal several of the 190 market stalls were occupied individually and others collectively as follows:
Stores Occupiers
(a) Individuals 75 75
(b) Two stalls together
(one occupier) 88 44
(c) Three stalls together
(one occupier) 27 9
190 128
Two of the storerooms are used by one stall holder and the remaining 31 are held by individual stall holders.
The valuation officer has included 128 stalls and 32 stores in his proposal for separate assessments. The valuation officer's proposal also includes four further assessments, on the manager's office, security mess room, cleaner's store and staff restroom.
The market hall is enclosed and is on three levels and is attached to and forms part of the Arndale Shopping Centre. The Arndale Centre development was originally built in the early 1970s. The market itself was built in 1978 and opened on the 5th June of that year.
The Arndale Centre is one of the largest covered shopping centres in Europe. It contains 216 retail units, plus those in the market hall and five major walk round stores. The centre also contains a major bus station, a multi storey car park for 1,800 cars and over 18,500 sq.m of office accommodation. There are two lockable entrances to the upper sales level of the market hall from High Street. The lower retail level of the market hall is below ground level and access thereto is from the High Street by a stairway in the vestibule of one of the access points to the upper level. There is also an internal inter communicating stairway in the south east corner of the market hall.
The westerly end of the market hall adjoins the internal shopping malls of the Arndale Centre. At the upper retail level there is direct access into the market hall from Market Way at eight separate points. There is an escalator giving access to the lower retail level of the Arndale Centre.
The lower level of the Arndale Centre adjoins a roughly rectangular shaped foyer from which there are four access points and an escalator connecting with the upper sales level of the Arndale Centre. The foyer gives access to the Arndale Bus Station from which there is one access point directly to the market hall and another access into the cafe forming part of the market hall. The foyer area also connects with Arkwright Way a subway shopping mall which in turn connects with the main shopping mall of the Arndale centre and from which there is another access point to the market hall. All accesses to the market hall have steel roller shutters and are under an alarm system, both controlled by the city council, so that access by anyone else cannot be gained to the market hall outside the hours that the market hall is open to the public.
Two of the perimeter stalls at the upper level and two perimeter stalls at the lower level, all at the westerly end of the market hall, also have direct individual accesses onto the shopping malls. These accesses also have steel roller shutters and are controlled by the same alarm system so that the occupiers of these stores cannot gain access to them, outside the hours that the market is open to the public, without the council's permission.
The upper level of the market hall contains 98 retail stalls and the lower level 92. The stalls can conveniently be described as either perimeter stalls or island sites, with the latter containing either four or six retail stalls per site.
Each retail level within the market hall has glazed tile floors, and a suspended ceiling in a metal grid framework, which also contain lighting panels, sprinklers and air conditioning vents. The main walls of the retail levels comprise skimmed and painted concrete although this has been covered with cladding as appropriate depending upon the requirements of the individual traders of the perimeter stalls which back onto them. At the westerly end of each retail level, the walls which divide the retail market from the main Arndale malls are constructed of a metal alloy framework between the main tiled structural column of the centre, which is in filled with either metal alloy panels or glass panels providing window displays for those perimeter units which adjoin the main Arndale malls.
In addition to the access points at each level from the Arndale malls to the market hall, a number of the individual retail stalls have separate access points direct into the main Arndale mall. At the upper level this applies to stalls 127 and 128 and at the lower level to stalls 30 and 91. In fact, stall 91 is free standing on an island site completely separate from the remainder of the market hall from which it is divided by the sub way mall known as Arkwright Way. At this level there is also separate access from the bus station concourse into the cafe which adjoins stall 1 at the north west corner. The cafe also has access into the market hall opposite stall 30 but, this access has shutter doors controlled by the council and is under the alarm system so that there is no access from this store into the market hall, outside the hours that the market hall is open to the public, without the consent of the council.
Each island site is on a raised concrete plinth. Each individual stall on the island site is constructed from a metal alloy framework with corner posts and intermediate pillars bracketed or set into the concrete plinth. Alloy angle or square sections then run from pillar to post to form the superstructure of each unit. Each retail stall is divided from its neighbour on the same island by walls formed from plastic coated panels attached to the superstructure.
The front of each stall (island and perimeter) comprises a plastic coated fascia board attached to the top of the superstructure, to which is affixed a standard plastic panel giving the stall number and stall holders trade name. This is usually affixed by the council. Below this is a roller shutter blind of flexible plastic material again attached to the superstructure, which can be lowered and locked for security purposes when the unit is not open for trading. About 50% of the stalls have metal roller shutters. Some of the stalls are "walk in", others are "serve over" structures. Individual consumption metres, fitted by the electricity board at the stall owners' expense, are generally located in a central metre cupboard. Some stalls are also fitted with a water supply and have had sink units and other fittings installed to comply with relevant health regulations applicable to the nature of the trade.
The perimeter stalls are basically similar in construction to the island stalls although, because they are adjacent to the outside walls of the market hall, they have tiled finishes where necessary to comply with health regulations consistent with their use for butchery or other perishable food trades. Many of the perimeter stalls also have pinewood strip wall finishes or washable plastic panels similar to those on the dividing walls of the island stalls.
On the upper retail level stalls F1 to F7 comprise the fish market. This is divided from the remainder of the market hall by an alloy metal framework, with plastic infilled panels at floor level and glazed panels above, which is similar in construction to the perimeter walls which divide the market hall from the other shopping malls of the Arndale Centre. Individually the fish market stalls are not dissimilar in construction to the perimeter stalls in other parts of the market hall, and because of their siting along the outside walls and nature of their use, tiles or other wash down finishes predominate. These stalls are included in the total of 98 on the upper level.
At the south east corner of each retail level, swing doors lead into a service area which contain refuse chutes and three goods lifts which connect with the service level of the centre itself. In addition, the south-east service corner has staff toilets and staff restrooms on the upper level. On the lower level there is a security mess room, the market manager's office and a cleaner's store. The lower level also contains a staircase leading down to the surface service level.
The service level itself has a bare concrete floor and is open to the underside of the concrete floor above, but due to the large amount of beam work and ducting attached to the latter the effective ceiling height is only about 2.75 m.
The service area is divided by painted block work walls into a number of separate store rooms with access from a central passage area. The walls of the stores are about 2.6 m high and the gap between them and the underside of the floor above is filled by criss cross steel mesh. Access to each storeroom is by a set of double doors which are kept locked from the outside. Internally, each storeroom is again open to the underside of the floor above.
The internal finish of each storeroom is unpainted blockwork. Any steel lined cold storage units are the property of the appropriate stall holder, who can remove the same on vacation of the storeroom. The service area is lit by fluorescent light tubes suspended from the ceiling of the service level itself. At three points there are double doors giving access from the service area onto a loading bay which adjoins the main service road of the Arndale Centre.
On the southern side of the service area are goods lifts and a refuse compactor room which links with the retail levels above. On the eastern side of the service area are toilets and locker rooms. Along the north side of the service area are a boiler room and refrigeration plant room used for the heating and cooling of the market itself.
At the service level there are 33 storerooms (one of which is used as a mess room for the corporation staff). The retail stalls range in size from approximately 9 sq.m to 30 sq.m. A typical perimeter stall has dimensions of 3.5 m by 3 m in depth and a typical island stall is 3.3 m by 2.7 m. Each stall is approximately 2.7 m high. The service level stalls vary in size from approximately 4 sq.m to 30 sq.m. Photographs were produced showing various aspects of the market hall and Arndale Centre.
Tenure and control of the market hall
The City of Manchester holds an underlease of the Arndale Centre Retail Market from Prudential Assurance Limited for a term of 125 years less 10 days from the 25th March 1980 at a peppercorn rent and payment of an agreed service charge. The city council is responsible for the repairs, insurance and outgoings in respect of the whole of the demised premises and must obtain the approval of the sub lessor to all structural and external alterations and additions. The council is covenanted to use the market, for the first 30 years of the term of the lease, for no other purpose than that of a municipal market and must not use or let the premises for noxious, offensive or like trade.
The council has exclusive statutory rights to hold all markets within the boundaries of the City of Manchester. The Arndale Market is within these boundaries. These statutory rights were conferred by the Manchester Market Act 1846. No persons may operate a rival market except with the consent of the council. The council has a policy of strictly enforcing its market rights.
The market hall is managed on behalf of Manchester City Council by the currently acting director of markets, whose offices are at St James Building, Oxford Street, Manchester, who employs an on site management organisation. This comprises a market manager, his assistant, three security men and five cleaners.
The majority of retail stalls within the market hall and the stores at the service level are occupied on renewable weekly licences, the remainder (11 at present) are let on tenancies. The number of tenancies has always been small since the market opened. The licences are terminable at a moment's notice from either party. The leases provide for re entry by the landlord if the rent or part thereof remains unpaid for 21 days, if the tenant fails to observe his covenants or becomes bankrupt.
The license charges, which are reviewed annually, are inclusive of general rates and water rates, cleaning of common parts and the exterior of retail stalls, rubbish removal from the service level and security. The license charge also contains a return on the capital in constructing and fitting the market.
The times during which the traders may occupy their stalls are controlled by the council, who determine the period of time when the market should be opened for trading. During this period, the terms of both license and tenancy agreements require that traders ensure that their stalls are open for trading.
The council is responsible for security. Some of the individual stores have shutters which can be rolled down but others do not. All are dependent on the council for security. All entrances to the market hall are protected by metal shutters which are opened and closed by the security officers employed by the council. Traders cannot gain access to the stalls when the market is closed by the council.
A typical standard license agreement and standard tenancy agreement were produced. The council are responsible for enforcing the provisions of the City of Manchester bylaws with respect to markets.
A summary of the responsibilities of the city council, the currently acting director of markets and the individual stall holders is set out below.
City Council
1. Responsible for repairs, insurance and outgoings in respect of the whole of the demised premises.
2. Approval of sub lessor required to all structural and external alterations.
3. Covenanted to use the market for the 30 years and no other purpose and must not use or let the premises for noxious, offensive, or like trades.
4. City council's employees clean the market building itself (i.e. common parts and exterior of the retail units or stalls).
5. Responsible for erecting, cleaning and maintaining all fascias to the units or stalls (even to the extent of putting up the holder's name and trade).
6. Provide a sprinkler system which serves the whole market building. The sprinklers are not directed on to individual stalls. These are maintained by the city council in conjunction with the Arndale Centre.
7. Provide an air conditioning system which covers the whole market building.
8. Therefore there are two fire certificates, one for the Arndale Centre and one for the Arndale Market. However, fire certificate for the Arndale Centre covers the market as well as the market having its own certificate.
9. Takes overall responsibility for food hygiene and will call in Environmental Health Officer if any food at risk, whether stall tenant present or not.
10 .Maintains and operates the alarm system for the Market Hall.
11. Responsible for external and internal repairs to stalls (although traders are liable to reimburse the council for the cost of internal repairs other than those arising from fair wear and tear).
Currently Acting Director of Markets
1. Above is a city council employee.
2. He employs an on site management organisation, i.e.
(a) a market manager
(b) an assistant
(c) three security men and
(d) five cleaners.
3. He manages the market on behalf of the city council.
4. Security is in the hands of his own security staff.
5. The locking up and security of the market buildings itself is done by the council's own security staff and by the market manager jointly.
Individual Unit (or Stall) Holders
1. The position of each stall is fixed and has been in that position since 1978, when the market was opened. Quite often, individual stall holders ask to move to another stall, in a different location in the market. The council arrange the transfer if such a move is possible, because of a vacancy. At regular intervals, notices are posted of vacant stalls in the market. In filling empty stalls, the Director of Markets' colleagues give priority to stall holders wishing to move to another location in the same market.
2. The units (or stalls) within the market hall and the stores at service level are occupied on renewable weekly licences (or tenancy agreements of which there are eleven in all).
3. The charge is reviewed annually, usually in line with inflation but may take account of trading conditions in the market as a whole.
4 It includes general rates, water rates, cleaning of both common parts and the exterior of the retail stalls.
5. It also includes cost of rubbish removal from the service level.
6 It includes provision of security.
7 It contains a return on the capital outlay in constructing and fitting out the market.
8. Examples of the standard licence agreement as tenancy agreements are shown on appendices H M.
9. For use of premises mentioned in the schedule the holder will pay the charge weekly in advance.
10 .If any damage done, holder is recharged where he has caused the damage.
11. Holders maintain internal fascias and walls.
12. There is a global sum for the whole market covering the service charge but no details of how it is calculated or of individual contributions.
13. To replace at his own expense fluorescent tubes for connection to electric socket outlets and lighting points. No additional or alternative lighting etc to be installed without written consent of Acting Director of Markets.
14 Each unit or stall is metered separately for electricity, the holder to pay all costs and charge to NWEB who provide the meter.
15. Each stall holder deals with his or her trading accounts, none is required to inform the council of trading profits for any period.
16. Stall holders may with permission fix steel roller security shutters to their stalls. The council keep a security key for emergency.
17. The tasks of deciding where to purchase and of purchasing the goods he/she sells at his/her stall are the sole responsibility of each stall holder, as is the fixing of the prices each stall holder charges for the goods he/she sells.
User
1. The city council's licence grants the holder the right to use the unit for sale by retail of the goods detailed therein on such days and during such hours as the city council may stipulate.
2. Right of way granted at all reasonable times on trading days to pedestrians. Also to vehicles over and along all internal roads and ways connecting the market with the public highway.
3. Vehicular right of way restricted to gaining access along such internal roads and ways to the designated area in the basement of the market for the loading and unloading of goods in connection with the authorised uses. Also for the purposes of conveying such goods from the basement to the unit (or stall) via the goods hoist the city council shall permit the use of hand operated trolleys.
4. (i) Not to use for storage.
(ii) Not to use for any other purpose than that expressly authorised.
(iii) Not to sell any other commodities than those specified without written permission of the currently acting director of markets.
5. Each holder to keep the premises in a clean and tidy condition and on termination of this permission forthwith to remove from the premises all goods and property and leave the said premises in a clean and tidy condition.
6. Each holder to indemnify the city council against all actions, costs, claims, demands and liability whatsoever in respect of injury or damage or loss to any person or property as a result of the permitted use or neglect or default.
7. Facts on User
(i) The units or stalls and storerooms are left stocked at night. Some 80 stalls have metal roller shutters which are secured by padlocks, the keys to which are held by those stall holders. The rest of the stalls are either open, being food stalls, or fitted with canvas blinds which are drawn down at the end of each day's trading.
(ii) The bylaws made on 5.4.33 still apply today in the same format.
(iii) The entrances from the interior of the Arndale Centre into the Market are secured by steel roller shutters and these are controlled by the Security Manager of the market. They are opened to the public at 9.00 am and closed at 5.30 pm. These times are strictly adhered to. Market traders do have access outside the public opening hours from two doors. A door in the basement is open from 7.30 am to permit access for butchers and fruit traders and a door at the Upper Level, manned by security staff is open from 8 am to permit access to other traders. In the evening all entrances are finally locked at 6.30 pm.
(iv) Each holder removes his own refuse to a central refuse shute where it is placed into a compactor from which the director for cleaning removes it from the premises.
(v.) There is no policy of trade restriction. This is qualified by the fact that a certain number of stalls have to satisfy the health requirements for food (i.e. as to water and drainage) and therefore no greater number of food stalls and allied trades than approximately the 61 units or stalls allocated for food purposes.
(vi) The types of goods which the stall holders are permitted to sell by their licence/tenancy agreement are specified in each licence/tenancy agreement. During the course of his/her holding of the stall, the stall holder is not required by the council to change the type of commodities from those specified in the agreement to another type of goods.
A schedule showing when each stall changed hands between 1978 and 1979 was produced.
Values have been agreed on the assumption that there is a single hereditament or, in the alternative, 164 separate hereditaments.
Issues
I was referred to the following authorities: Spear v. Bodmin Union; Laing (J) & Son v. Kingswood A.C. ; McAlpine (Sir Robert) & Sons Ltd. v. Payne VO [1969] RA 368; London County Council v. Wilkins VO,; William Roberts and Others v. The Overseers of Aylesbury; Field Place Caravan Park Ltd. v. Harding VO; Dresden Estates Ltd v. Collinson; Westminster City Council v. The Southern Railway Company and Others; Aluwihare VO v. MFI Properties Ltd; Helman v. Horsham and Worthing AC; North Eastern Railway Company v. Guardians of York Union; Gilbert VO v. S. Hickinbottom & Co Ltd, Harris Graphics Ltd v. Williams VO; and Protection from Eviction Act 1977.
The essential issues between the parties may be put in the form of two questions.
(1) Is each stall, store, office, restrooms etc, capable of being a separate unit?
(2) Is each of the 164 units in fact separately occupied?
The solicitor to the Inland Revenue submitted that as to question (1) above, there was no real issue because each unit was capable of a separate identity. As to question (2) above he submitted that in fact there were 164 separate and exclusive occupations, that the restrictions imposed by the city council were no more than those required for the proper management of the market and did not establish the city council as the paramount occupier, and that the occupation of any of the 164 units was not transient.
Reference was made to another covered market hall close by in Brown Street, also operated by the city council, where on appeal to the local valuation court the individual stalls were separately assessed. I do not think that these comparisons are helpful as the present appeal has to be decided on the facts relating to the appeal premises.
Counsel for the city council submitted that as to the 128 stalls and 32 stores, occupation was not exclusive because of the control and regulations imposed by the city council which in fact established the council as permanent occupiers of each unit. He accepted that it was immaterial to the question whether a trader or the city council was in rateable occupation of the store, whether the trader had a lease or only a license to occupy. He also accepted that paramount control of the stalls was not established merely by the fact that the city council controlled access to and egress from the stalls and regulated the hours within which the market was opened.
He sought to distinguish Westminster on the grounds that the identity of interest between a market operator and a stall holder was much closer than that between a railway operator and, for example, a bookstall holder. He submitted that the operation of the market hall as a whole was paramount and the operation of the stall holder was part of, and subordinate to, the whole.
As to the five separate units occupied by the city council he submitted that in some cases the units were contiguous and in all cases there was a functional connection linked by common walkways and passages. He submitted that the five units should be assessed as one, but presented no evidence as to the appropriate assessment of that single unit.
At a late stage in the hearing he submitted that as the valuation officer's proposal sought to establish 164 assessments where only 160 could be identified, the proposal was flawed and therefore in any event the appeal should be dismissed.
Although there was no reference to this argument in the statement of reply he submitted that this was not a requirement under the Lands Tribunal Rules and in any event he applied for leave to amend. The solicitor acting on behalf of the various stall holders adopted the argument of counsel for the city council. He submitted further that the security of tenure of a market stall holder was considerably less than that enjoyed by a lodger under the terms of the Protection from Eviction Act 1977 and the occupation by a stall holder was too transient to form a rateable occupation.
Decision
I viewed the appeal premises and the Market Centre, Brown Street.
It is common ground that the onus is on the valuation officer to show that each of the 164 units is a single unit of occupation as distinct from being part of a larger single unit of occupation namely the whole of the market.
It is also common ground that there are four necessary ingredients to rateable occupation, referred to on pp 26 and 27 of the 13th edn of Ryde on Rating as follows:
"First, there must be actual occupation or possession; secondly, it must be exclusive for the particular purposes of the possessor; thirdly the possession must be of some value or benefit to the possessor; and fourthly, the possession must not be for too transient a period."
The first and third ingredients are not in issue in this case.
As to exclusive occupation, it seems to me that each of the 128 stall holders physically occupies his stall for the purpose of a particular retail trade and each of the 32 stores is physically occupied in connection with the retail trade in a particular stall. So long as a stall holder is physically in occupation of his stall or store none other has a right to use it for that purpose. The city council may have the right to enter onto the premises for a variety of purposes but not for the purpose of carrying on a retail trade.
The council may evict the tenant, but there is no evidence of this right having been exercised except perhaps in one isolated incident. They may control the hours of trading and the ingress and egress to the market and the type of trade to be carried on in each store; but on the facts before me this is no more than is necessary for the orderly and proper function of the market as a whole. It seems to me that the interest of the city council in managing the market is different from that of each stall holder who is conducting a particular retail trade. The identity of interest is not, for example, akin to that of an occupier of a departmental store who permits other retailers to occupy stalls or counters in the store under franchise.
As to the period of possession, the facts of occupation are to be preferred to the rights of extinguishment contained in any lease or license. In the present case 128 or so stalls and 32 or so stores have been available for letting since 1978. Records show that since 1978, the tenants or licencees of 38 stalls have remained in the same occupation. At the other end of the scale, there are only two instances where the change in occupation has been as much as six times in a year. This evidence does not suggest that the occupations have been transitory.
Therefore I am of the view that the 128 stalls and 32 stores are separate rateable hereditaments and should be assessed accordingly at the agreed figures.
There remains, however, the question of the proposal being flawed. I do not agree with counsel for the city council that it was unnecessary to have referred to this point of law in the reply to the statement of case.
Rule 11 of the Lands Tribunal Rules 1975 reads:
"11 (1) Where notice of intention to appear has been given and the appeal is on a point of law or the net annual value of the hereditament to which the appeal relates exceeds £1,250 (i) within 28 days after the time limited by r.10 for giving the notice, the appellant should send to the registrar and to each party by whom notice has been given a statement of his case, including the facts to be proved and any points of law on which he intends to rely at the hearing; (ii) within 28 days after receiving the appellant's statement, every party who intends to appear in opposition to the appeal shall send to the registrar, the appellant and every other party to the appeal a reply stating his case, including the facts to be proved and any points of law upon which he intends to rely at the hearing."
However, I accept the city council's late application to amend the reply to the statement of case and reserve my award as to the cost of the application.
Before deciding whether or not the proposal is flawed it is necessary to consider what should be the proper proposed entry in the valuation list. Although none of the parties have presented such an argument, on the evidence before me, it seems to me that there should be a separate entry in the valuation list in respect of the entire market hall, less the 128 stalls and 32 stores which are each separately occupied (the residual section). In other words, I agree with counsel for the city council that the four units in the occupation of the city council should form a single assessment but I go further; there should be included in that single assessment the loading bay, the boiler house, refrigeration room, passage ways and other items which go to make up the whole of the residual section. I have no evidence before me as to whether the residual section has any value or whether the agreed assessments on the 160 units effectively exhausts the value of the residual section. Therefore to raise a separate assessment on the residual section might be double counting. Alternatively, there is no evidence before me to show that if the residual section were to be assessed whether this would affect the agreed values on the 160 units.
If it were otherwise, I would have deferred my decision to enable further valuation evidence to be given. As it is, I am of the view that the valuation officer's proposal is flawed.
Section 81 of the General Rate Act 1967 provides that
"any person may include in the same proposal, objection . . . all or any hereditaments comprised in the same valuation list . . . if, and only if, those hereditaments are owned and occupied by the same persons or are comprised in the same building."
Thus it cannot be said that the valuation officer was wrong in this case in making one proposal although being wise after the event it might have been prudent for him to have made 164, or 161, separate proposals in the expectation that the large majority of these would be successful.
Section 7(1)(5) of the 1967 Act provides that:
"The local valuation court shall give such directions ... as appear to them to be necessary to give effect to the contention of the appellant if and so far as that contention appears to the court to be well founded. "
Section 77 of the 1967 Act as modified by the Local Government Act 1974 enables the Lands Tribunal to give any directions which the local valuation court might have given.
It is clear from the authorities referred to in the Lands Tribunal decisions in Aluwihare VO v. MFI Properties Ltd and White that the proposal identifies the hereditament or hereditaments and the issues between the parties.
In the present appeal the proposal seeks to create 164 separate hereditaments and 160 of these can clearly be identified. The remaining four hereditaments proposed should in fact be a single hereditament and should in fact include all those other parts of the market hall which are in fact occupied by the city council. The issue is whether there should be one or 164 separate hereditaments and in my view the tribunal has no power on appeal to amend the valuation list so as to include only 161 hereditaments and to include additional parts of the building not identified on the face of the proposal.
With reluctance I have come to the view that the originating proposal is flawed and this tribunal has no jurisdiction to entertain the present appeal which is hereby struck out.
I received written submission as to costs. In view of the fact that the point on which the respondents were successful was introduced at a very late stage of the proceedings I make no a
R.A. 39
R v School Board of London 1886
References: (1886), 17 QBD. 738 CA
Court of Appeal
Lord ESHER MR : The main and real question to be decided in this case is whether, in calculating the rateable value of the schools in question, the School Board itself ought to be taken into account as one of the possible hypothetical yearly tenants. The point that the School Board is not rateable was suggested, but was not seriously pressed. The buildings are not put into such a position by statute that they could not profitably be occupied or owned by any one; they are not (as it has been described) struck with sterility, and are therefore rateable, and the School Board can be rated in respect of them. The real question is how the value is to be ascertained. The inquiry is not as to what rent is paid by the actual occupier. The mode of finding out the value is laid down in the Act, and it is to ascertain the rent which a tenant (not the tenant), taking one year with another, might reasonably be expected to pay; it is also implied that where the owner occupies he is to be considered as if he were a tenant. The directions given by the Act are equivalent to saying that one must look at all possible tenants, and the phraseology does not exclude an owner who himself occupies the premises.
Therefore an owner in occupation of the premises is not excluded from consideration as a possible tenant. Now the School Board can be tenant of premises. If by the terms of any statute it could not legally be tenant it would be excluded from the calculation. It is said that the School Board ought to be excluded because it can never obtain any beneficial interest from its tenancy; but it can be a tenant; it has a duty to perform which may induce or force it to be a tenant. It follows therefore that it would be wrong to exclude the School Board from the list of possible hypothetical tenants, whether it is in the position of owner or in that of occupier. That is the real question of principle, and is the question which was intended to be argued. The calculation is founded on this, that the Court took the School Board as a possible tenant. They took the right view, and calculated the rent which could be expected from any tenant, including the School Board. I am of opinion that the judgement of the Divisional Court ought to be affirmed.
BOWEN LJ: I am satisfied that the real, and, indeed, the only, question for decision is whether the School Board is to be excluded from the list of possible hypothetical yearly tenants. To decide this it is necessary to refer to the Act of Parliament, and on doing so it seems to me that there is no more mystery.
By 6 & 7 Wm. 4 c. 96, s. 1, and 32 & 33 Vict. c. 67, s. 4, the rate is to be made upon an estimate of the rent at which the premises might reasonably be expected to let from year to year; that must mean to let to some one who wants to hire them. The question is whether the School Board is to be excluded from the list of possible occupiers. If the inquiry is made whether it might reasonably be expected that the premises would be let to the School Board, the answer must be in the affirmative. That being so, it seems impossible to exclude the School Board. Therefore the language of the Act answers the question. The case cannot fairly be decided on the hypothesis that the one person who wants the premises most would not take them. It does not matter whether the School Board wants the premises for the purpose of profit, or will make profit out of them; the question is whether the School Board wants and would take them. I am satisfied that the principle on which the value has been estimated is sound.
FRY LJ:I am of the same opinion. I think the difficulty arises from referring, not to the Act itself, but to certain expressions which occur in the decisions.
The Valuation (Metropolis) Act, 1869, in s. 4, defines "gross value" as meaning "the annual rent which a tenant might reasonably be expected, taking one year with another, to pay for an hereditament," &c. That refers to the annual rent which any tenant might reasonably be expected to pay to any landlord, and the actual owner and occupier are not excluded. The question was asked why the actual occupier is not to be treated as a possible tenant, and no answer has been given except one. It is said that the School Board is not to be considered as a possible tenant, because, though it occupies the premises, it can make no profit out of them, but a man who occupies a house for his own comfort might as well be excluded. The "term " sterility " has been introduced into the cases, because as a general rule a profit is produced, but it does not by any means follow that because there is no profit there is no value. There could be no better illustration of this than the present case. The only question is whether the person to be considered as a tenant could reasonably be expected to take the premises from any motive. It seems to me that the very words of the section answer the question, and that the argument for the appellants is derived from a misapprehension of suggestions which have been made in the cases. I am of opinion that the right mode of calculating the value has been adopted.
Appeal dismissed.
LCC v Erith & West Ham 1893 Liverpool Corp. v Huyton with Roby UDC 1964 Cumbria CC v Sture 1974
Lands Tribunal
This is an appeal by Cumbria County Council against the decision of a local valuation court, sitting at Millom on the 30th October 1973, in respect of a nature reserve known as the Drigg Dunes Gullery and Nature Reserve near Ravenglass in Cumbria. The court confirmed an assessment of £190 rateable value as proposed by the respondent valuation officer in a proposal made on the 8th February 1973. The grounds of the appeal to the 'Lands Tribunal are, briefly stated, that the county council is not in rateable occupation of the reserve.
Under s 16 and s 21 of the National Parks and Access to the Countryside Act 1949 a county council are empowered to secure the provision of nature reserves on any land in their area as to which it appears to them expedient that it should be managed as a nature reserve. There are further powers enabling such an authority to enter into an agreement with an owner of any land being land as to which it appears to the council expedient in the interests of the locality that it should be managed as a nature reserve for securing that it shall be so managed. By s.20 of the Act a county council are further empowered to make byelaws for the protection of any reserve on land so managed by them.
In 1954 the then Cumberland County Council entered into an agreement with a landowner whereby the council undertook, in accordance with their powers under the Act, to manage as a nature reserve some 570 ac of land above high water mark, described as being part of Drigg Rabbit Warren and Sand Hills. They duly declared by resolution that the area was being managed as a nature reserve and made byelaws for the protection of the reserve in pursuance of the powers conferred by s.20 of the Act.
On the 15th February 1967, this agreement was superseded by a lease under which the landowner demised, to the county council a slightly revised area of land extending to some 400 ac above high water mark for a term of 20 years from the 25th March 1966. The rent of £200 pa was to be reviewed in, the eighth and 15th years of the tenancy although no review has yet taken place. The council covenanted inter alia to use and manage the demised land as and for a nature reserve only under powers conferred by s 21 of the Act. By virtue of public declarations made on the 31st May 1967 and the 13th September 1972, the county council have declared that the entirety of the land, which is the subject of the lease, is managed by them as a local nature reserve. It is this land which is the subject of the present appeal save only for a small parcel which is separately assessed as a caravan site on which the warden's caravan is situated and in respect of which there is no dispute.
The main features of the reserve and gullery are sand dunes and broad sand and shingle beaches. The dunes have formed on a shingle peninsula which runs on a south eastern / north western axis, bounded on the west by the Irish Sea, on the north by the River Irt, on the south east by the River Esk, and to the north by other land over which the reserve and gullery is approached. The dunes are among the best developed of the Cumbrian coastal dunes.
Camden LBC v Peureula Investments Ltd 1976
References: [1976] RA 169
Court of Appeal
Lord Widgery CJ: This is an appeal by case stated by one of Her Majesty's stipendiary magistrates sitting at Wells Street, London, who on the 21st October last had before him a complaint by Camden London Borough Council seeking the issue of a warrant of distress for non payment of a general rate by the ratepayers in respect of the Shaftesbury Theatre in London. The period in respect of which the rates were said to have accrued was the 1st October 1973 to the 30th November 1974 just over a year. The reason why the rates had not been paid during that period was, as is demonstrated in some detail in the case, because the theatre was incapable of use at that time.
The facts are these. On the 20th July 1973, whilst the musical Hair " was being performed at the Shaftesbury Theatre, part of the ceiling in the auditorium collapsed on the audience. That meant of course that the theatre could not be used until something was done about it, and it was an expensive job to provide the money for repairs. For some time the theatre remained empty in the sense that it could not be used for its ordinary natural purposes, though it did still contain the seating which presumably was screwed to the floor, the safety curtain and some carpets. The show was transferred elsewhere, and in July the council (the rating authority) served a dangerous structure notice requiring that the building be repaired or made safe.
The ratepayers responded, not unnaturally one might think, by saying "if we have got to repair this and make it safe, perhaps you will indicate that you will not make us pay rates on it whilst that operation is being continued." However that was an application which did not find favour at the time and indeed no formal application for a nil rating assessment was ever made.
One of the arguments for counsel for the rating authority in this case is that such a change in the amount of the assessment should have been sought and achieved, but he said quite rightly that there is an building under the Town and Country Planning Act 1971, and that again upset the doing of the work.
In the end, the ceiling was remade at a cost of £50,000, the work taking some six months to complete, and the seats were refurbished at a cost of about £2,500 to make them fully effective for use of the building as a theatre as it originally had been. All that was left, the theatre being restored, was the argument about whether any rates should be paid on the building during the period in which it was incapable of use as a theatre.
It was contended by the rating authority that, though the theatre could not be used as such, the ratepayers had beneficial occupation of the building because they were using it as a storage place for the safety curtain and seats. It was contended by the ratepayers on the other hand that, although the seats and safety curtain and the like re physically within the building, this was not one of those cases of which reference was made in the stated case where the building is therefore to be regarded as a warehouse and rated as a warehouse meanwhile.
The stipendiary magistrate took what I must say seems to me to be the only sensible view in this case in that he said that, if the premises were designed as a theatre and were incapable of beneficial occupation as a theatre, why should rates be paid? The only question think which must really require careful consideration in the case is ether or not some of the older authorities are binding on us so as to enquire us to say that there was beneficial occupation of this theatre s a storehouse for the seats, because if we are bound to say that then ere is authority for the proposition that the present ratepayers were beneficial occupation.
The sort of case which appears in the authorities on this subject is one of the earliest is Staley v. Castleton Overseers. It is an interests case because it was a case of a cotton mill which had to stop operating because of the American Civil War and the owners of the ill, with suitable foresight and realism that the civil war would end one day and there would be a new supply of cotton, kept the mill in ship shape order. They kept the engines running. They ran the steam through the pipes and they exercised the machinery for the purpose seeing that as soon as cotton came back the mill could go ahead. hen when the rate demand was made against them they said that they were not using this as a mill. The answer was that they were using it as a storage place for valuable machinery which was there.
One can easily see that as a matter of fact and degree the presence chattels can legitimately and sensibly be said to produce a beneficial occupation in the owner of the hereditament, but I think it is largely a question of fact, and I must say in the instant case I have no inclination whatever to overturn the conclusion of the learned stipendiary magistrate, which seems to me to be very good sense indeed. I just do not think it is right to say that this theatre was used as a store for the seats at the relevant times. It is not as though the seats had been put in there deliberately. They were there all the time. They were there mixed up with the debris when the ceiling came down. If the magistrate said as a matter of fact "I do not think there was any beneficial occupation", I would happily form up behind him and support him. For those reasons I would dismiss this appeal.
CROOM JOHNSON J: I agree.
MAY J: I also agree.
Newham LBC v Hampsher 1970 Lambeth Overseers v LCC 1897 Kingston upon Hull Corp. v Clayton 1961
References: [1963] AC 28, HL [1961] 3 All ER 118, [1961] 3 WLR 497, [1961] 345 1 QB
COURT OF APPEAL
Evershed MR: The claim of the appellant valuation officer in this case is that the Lord Mayor, Aldermen and Citizens of Kingston-upon-Hull - that is, the Kingston-upon-Hull Corporation - are in rateable occupation of the Ferens Art Gallery, Victoria Square, in that city. The answer of the corporation, which found favour with the Lands Tribunal, is that the result of the obligations imposed on the corporation, by certain deeds made in the years 1919 and 1928 between the late Mr. Ferens and the corporation, is that any "occupation" by or on behalf of the corporation is in the character of mere custodians for the public; that, accordingly, the "occupation" by the corporation has no "beneficial" or other quality sufficient to attract liability to rates; and that the principle applied in Lambeth Overseers v. London County Council (the Brockwell Park case) and Burnell v. Downham Market Urban District Council to parks or open spaces is no less applicable to a public art gallery, such as the Ferens Gallery. If the matter were free from authority and could be judged by common sense and the ordinary usages of language, I should, I confess, feel little doubt that the tests of "occupation" applicable in the case of a public park or a public open space would have little reference to a public art gallery controlled and managed as is the gallery in the present case.
The facts in the case appear to have been agreed and are set out in the decision. They are such as you would expect them to be. Though no one sleeps on the premises, they are under the control of a director and assistant director responsible, with the staff necessary for the purpose, for the maintenance, repair, decoration, lighting, heating, etc., of the building and for its ordinary security. It is open to the public during certain hours in the daytime. No admission fee appears to be charged and no regulations seem to have been made or published.
There is no evidence of the ownership or character of the pictures or other works of art displayed. The area open to the public is approximately two-thirds of the whole. The remaining parts of the building, to which the public are not admitted, are used for the ordinary purposes, that is to say, as offices, store rooms, etc., normally appropriate to the use of the building as an art gallery. On this basis of fact the question "Are the premises occupied and if so by whom?" when applied to this art gallery would, as I have said, appear to me to yield, according to common sense and use of language, quite a different answer to that appropriate to the same question when related to a public park or open space. In the latter case the sensible answer would to my mind be - in any ordinary acceptance of language - that the park or open space is not "occupied" by anyone; the public have, when the gates are open, free and unrestricted access to the whole of it, save only such buildings or places as are reserved for the use of the park keepers or custodians.
But in the case of a building, such as the present gallery, I should have thought that the sensible answer was no less certainly that it was "occupied" by those whose function it is to maintain the building in the ordinary way as such and not the less so because, during the specified hours of the daytime, members of the public are admitted to look at the works of art displayed. It is well established that where more than one person or set of persons have rights to be in or upon a building, that person or set of persons having the control and regulation of the building is treated as the rateable "occupier" (see Westminster City Council v. Southern Railway Co. & Others, per Lord Russell of Killowen). It is also well established that "occupation" in order to attract liability to rates must be "beneficial occupation." But that phrase does not mean "profitable occupation" and may be satisfied by occupation in discharge of a statutory duty or statutory power or for discharging the duties of a trustee - see, for example, the case cited to us of a public library, Liverpool Corporation v. West Derby Union.
It has also been clearly established since the case of Jones v. Mersey Docks and Harbour Board Trustees, as was pointed out in the speeches in the Brockwell Park case, that the fact of a property being held for public purposes does not deny "beneficial occupation" in the occupier. In the Brockwell Park case - which followed the case . relating to Putney Bridge, Hare v. Putney Overseers, and was in turn followed by this court in the Downham Market case relating to a war memorial playing field - it was held by the House of Lords that the right of the public to the use and enjoyment of the park was "free and unrestricted," save only for those buildings reserved by the London County Council for the purposes of management and conservation of the park, activities purely ancillary to the general purpose of the public park and occupying together a very small area compared with that of the park as a whole. It appears from the relevant Act of Parliament under which the London County Council acquired the park, that its duty to give to the public "free and unrestricted" access was perpetual and involved a denial of any right to charge an entrance fee.
In the Downham Market case this court held that the public were entitled to a similar "free and unrestricted access" - the power of the local authority on occasion to close the field and charge an entrance fee, as for a hospital fete, being minimal in effect; and the power of the authority in certain circumstances to sell the field no more qualifying for practical purposes the "permanence" of the public right of enjoyment than the possibility of the London County Council getting a special amending Act in regard to Brockwell Park. In their speeches in the House in the Brockwell Park case both Lord Halsbury LC and Lord Herschell refer to, and appear to base themselves upon, the dual grounds of free and unrestricted user by the public and of the absence of any beneficial occupation in the London County Council. Lord Halsbury LC at the beginning of his speech, said: "I do not think there is here a rateable occupation by anybody. The 'public' is not a rateable occupier; and I think that one sentence disposes of the case." Later, he continued: "Once it has been found, as in this case, that the occupation cannot as a matter of law be a beneficial occupation, there is an end of the question. I say as matter of law, because that it does not give a beneficial occupation as matter of fact is nothing to the purpose. Here there is no possibility of beneficial occupation to the County Council; they are incapable by law of using it for any profitable purpose; they must allow the public the free and unrestricted use of it."
Lord Herschell said: "No tenant would give anything for them" - that is to say, the park and buildings thereon - "seeing that every part of them is dedicated to the public use, and that the small sums of money which might be received in respect of them would, as the case finds, be more than absorbed by the expense of keeping them in order." On the following page he said: "... I am not satisfied that the county council are occupiers of this park for rating purposes, though the legal possession is, no doubt, vested in them. They seem to me to be merely custodians or trustees to hold it and manage it for the use of the public." But as pointed out by Kennedy J. in the Liverpool Corporation (public library) case, the two things are in truth manifestations of the single, decisive, proposition, viz., that on the facts of the Brockwell Park case the free and unrestricted user by the public was exhaustive and exclusive of any right to any occupation, or at any rate any beneficial occupation, in anyone else. By way of distinction, the Divisional Court in the Liverpool Corporation case emphasised the absence of any statutory or other obligation to continue to allow the premises there in question to be used as a public library for any particular length of time, still less in perpetuity. I do not say that the principles of the Brockwell Park case cannot be applicable to a building as opposed to an open space. It may well be that if a public authority acquire a piece of land and erect upon it, say a public shelter, and thereafter hold the property by virtue of some statute or of a deed of trust under the obligation to maintain it as a public shelter for all time, the public could be said to have such right of free and unrestricted user and would be exhaustive and exclude any "beneficial occupation" in the authority. But the question here is: what is the nature and what the extent of the public rights to or in the Ferens Art Gallery? So far as I can see such rights are to be found and found only in the final words of clause 5 of the trust deed of December 9, 1919. The words are: "Upon trust to permit the same to be used and enjoyed by the citizens of the said City and County of Kingston-upon-Hull and the public generally as an art gallery for the exhibition of works of art in perpetuity."
True it is that the last two words impose a permanent obligation, but I cannot see that a charge for admission to help towards provision for the cost of maintenance would be inconsistent with the use of the premises by the public "as an art gallery." Further, if on occasion or in some part of the building works of art were displayed which were lent for the purpose and were of very great value, I see nothing in the obligation, which I have quoted, which would prevent the making of regulations restricting the passage of the public in the rooms for the better security of the exhibits. In other words, I cannot accept the argument that in the case of premises used - in the ordinary acceptance of the word - as a public art gallery, the right of the public necessarily involves or must be comparable to the "free and unrestricted user" by the public of an open space. After paying therefore, as I hope, due regard to the language and reasoning in the cases binding upon us, I have nevertheless in the end come to the same conclusion that, as I stated at the beginning of this judgment, appeared to flow from the application of common sense and ordinary language. I add one further consideration: if the question be asked, relevant in all rating cases, what, if any, rent might be payable for a tenancy of the premises subject to the obligation of the overriding trusts affecting them, I am by no means satisfied that the answer would necessarily be "nil." A great amateur of the arts might well pay a rent for the premises in order to enable him, by the exhibition of works of art belonging to or borrowed by him, to increase public interest in and appreciation of the arts. And he would be more inclined so to do if he happened himself to be a painter or sculptor and therefore able to exhibit his own works - and offer them for sale - in one room of the premises. Similar considerations might, I conceive, apply to a person or company carrying on business as an art dealer; and the result would in neither case disqualify the premises as a public art gallery or involve any failure in observance of the terms of the trust deed.
HARMAN LJ: The decision of the lands tribunal from which this appeal arises, if it be good law, must have important effects for it extends to public buildings held for public purposes the freedom from rateability established in regard to various open spaces by a line of cases of which the prototype is Hare v. Overseers of Putney and the leading case the Brockwell Park case. Now in my judgment the true ratio decidendi in those cases is that no one is in occupation at all and therefore no one rateable. This is easily seen in the first case which was concerned with Putney Bridge. It would be extravagant to say that the public occupies Putney Bridge but true to say that the public has such extensive rights over it as entirely to exclude any beneficial occupation in the owners, who are mere custodians. The Brockwell Park case was perhaps a slight extension of this line of reasoning, for there the London County Council did exercise some control, shutting the park at night and having certain buildings in the park which they controlled, but these powers of control were strictly ancillary to the maintenance of the park for the use of the public and the House concluded that they were not enough to make it untrue to say that the public had, as the Act of Parliament provided, free and unrestricted access. It is true that Lord Halsbury LC expressed the view, by implication, that the public was in occupation, but the following paragraph shows his true view in these words: "... as I have said, I think there is no occupation at all, the county council being merely custodians and trustees for the public." As to the further point discussed in that case, namely, whether there was a beneficial occupation, it is clear that neither Lord Halsbury LC nor Lord Herschell considered that the word beneficial meant profitable. Lord Halsbury LC for instance says: "Once it has been found, as in this case, that the occupation cannot as a matter of law be a beneficial occupation, there is an end of the question. I say as matter of law, because that it does not give a beneficial occupation as matter of fact is nothing to the purpose." It is possible that the Downham Market case was an extension of the principle in a different direction, because there the dedication to the public was by deed and not statute, but that aspect of the matter is of no importance here. The tribunal's decision therefore amounts to this: that this building is an unoccupied building, and this seems to me clearly wrong. It is not in fact unoccupied. It is not in law occupied by the public, whose only right is to enjoy the advantages of a picture gallery. It is on the other hand, in my judgment, occupied by the corporation under the deeds which my Lord has already cited. Time was when land held for public purposes was held on that account not to be rateable, but that time has long gone by. See the speech of Lord Herschell in London County Council v. Church Wardens, etc., of Erith Parish and Dartford Union Assessment Committee where he says: "The decision of this House in Jones v. Mersey Docks marks an epoch in the law of rating. Many of the earlier decisions are tainted with this vice, that they proceed upon the supposition that lands held for public purposes are on that account not rateable. This doctrine is now exploded, your Lordships' House having distinctly determined that the circumstance that land is held by a public body for public purposes does not affect its rateability." It is not then the fact that the purposes concerned are public purposes that will absolve the occupiers, if there are any, from rates. As I have already said, I cannot think this can be treated as an unoccupied building. It is in fact actively used and occupied every day of the week. It is vested in possession in the corporation who are, therefore, prima facie, the occupiers: see Ryde on Rating, 10th ed., p. 20, and cases there cited. Unless, therefore, they occupy merely as custodians or, in other words, unless the rights of the public are such as to exclude all possibility of beneficial occupation by the trustees, then the occupation on the part of the owners will be treated as beneficial for rating purposes. The answer to this last question must rest upon the document of trust. The trusts are declared with a remarkable lack of particularity - "to permit the same" - that is, the building - to be used and enjoyed by the citizens of ... Hull and the public generally as an art gallery for the exhibition of works of art in perpetuity." I suppose that the trust has been delegated to the appropriate committee of the corporation. This body acts through its appointee, the curator and his staff, but apparently has not thought it necessary to issue any by-laws for the regulation of the gallery. There is nothing in the trust about the public enjoying free and unrestricted access. The public is entitled to enjoy the property "as an art gallery." What does this mean? It must mean, in my judgment, that the corporation is to conduct upon the property an art gallery in the usual way of such resorts. I see no reason why the public should not be charged at any rate such a sum as will supplement the inadequate upkeep fund even if not sums which will augment the fund for the purchase of works of art. I see no reason why the gallery may not be closed, say on Thursdays, for the use of art students. Indeed, I see no reason why the corporation should not let or lend the gallery or specific parts of it for the exhibition of works of art on loan, whether by some body like the Arts Council or by a wealthy patron or, indeed, an impresario wishing to make a profit. In these circumstances, it seems to me that the corporation is truly the managing owner and occupier of the building, and that its position is quite unlike that of the mere custodian of an open space and much more clearly akin to the trustees of the Soane Museum who were held rateable in Trustees of Sir John Soane's Museum v. St. Giles in the Fields and St. George's, Bloomsbury, Joint Vestry. For these reasons I agree with the Master of the Rolls that the appeal should be allowed.
Donovan L.J.This is an appeal by way of case stated from a decision of the Lands Tribunal that the Ferens Art Gallery at Hull is exempt from rating having regard to the decision of the House of Lords in Churchwardens and Overseers of Lambeth Parish v. London County Council, commonly referred to as "the Brockwell Park decision." The appellant valuation officer contends that that case has no application to the present. The salient facts in the Brockwell Park case were that the London County Council had under the London Council (General Powers) Act, 1890, power to purchase the park; and if the council exercised the power, were - under the same Act - to hold the property as a park, and maintain and preserve it as a park, for perpetual use by the public for exercise and recreation. The power to purchase was exercised and the park conveyed to the London County Council "to the use of them, their successors and assigns for ever to the end and intent that the same might be used as and for a public park." And as for the prescribed purposes of exercise and recreation, the council provided, inter alia, 30 lawn tennis grounds and 13 cricket pitches for the use of which, it seems reasonable to infer, some small charge was made. The previous private owner had been assessable to rates in respect of the park and a Divisional Court held that the London County Council in turn were likewise rateable.
The Court of Appeal reversed that decision and its judgment was upheld in the House of Lords. In the Court of Appeal, the decision against rateability was based upon the absence of beneficial occupation. A. L. Smith pointed out that an authority discharging some public duty and having property vested in it for the purpose was still to be regarded for rating purposes as one of the hypothetical tenants. On that basis its occupation could be beneficial, for if the authority did not own the premises it might have to rent them to discharge the duty. But the London County Council were under no obligation to provide parks for the public; and in the case of Brockwell Park the outgoings far exceeded any possible income. Accordingly, upon the hypothesis that any tenant of the hereditament would be bound under the Act of 1890 to maintain it as a public park, such tenant would make an annual loss, and could not therefore be expected to pay any rent. The park was not, therefore, rateable. The House of Lords agreed with this view, but decided the case on the broader ground that there was no rateable occupation by anybody. There was obviously physical occupation, for example, by the council's servants, some of whom dwelt in cottages being part of the park. But for rating purposes the public were in occupation. Lord Halsbury LC said: "I do not think there is here a rateable occupation by anybody. The 'public' is not a rateable occupier." And again: "It appears to me that the nature of the occupation here is such that there can be no rateable occupation." Lord Herschell said: Here these very lands and every part thereof, by statute, must be held in perpetuity for the use of the public, and the question is, whether, under these circumstances, they are rateable at all. I think that on principle they are not."
In the case before us, one Thomas Ferens, a citizen of Hull, on December 9, 1919, conveyed to the Hull Corporation for a nominal consideration of 10s. a plot of land in Victoria Square in Hull, together with a church on part of the site, to hold the same unto and to the use of the corporation, but subject to the trusts comprised in an indenture of even date made between the same parties. That indenture recites the conveyance and further that Mr. Ferens, being desirous of providing for the erection by the corporation of an art gallery upon the said land for the use of the citizens of Hull and the public generally, had transferred certain investments to the corporation worth some £48,000. The trusts declared in respect of these investments were that the corporation should convert the same into money when they thought fit and use the fund to erect an art gallery on the land within five years. The trusts declared in respect of the land were that the corporation should hold it and the art gallery to be erected on it "upon trust to permit the same to be used and enjoyed by the citizens of the said City and County of Kingston-upon-Hull and the public generally, as an art gallery for the exhibition of works of art in perpetuity." It is to be noted that by the same deed the corporation covenanted to demolish a public lavatory which stood upon land adjacent to that conveyed by Mr. Ferens, and the site of the lavatory was to be comprised in the site for the art gallery. I do not think that anything turns upon this. It is reasonable to suppose that this additional ground was a very small part of the whole. A third deed of March 15, 1928, between the same parties, after reciting that the building of the art gallery had been postponed by mutual arrangement, but that the gallery was now complete and properly fitted up, and open to the public, and that a residue remained of the original fund of £48,000, such residue amounting to upwards of £20,000, provided as follows: £22,500 was to be set aside as an endowment fund, and the income from £2,500 of this fund was to be applied towards the cost of maintenance and upkeep of the art gallery. The income of the balance of the fund was to be applied in defraying the cost of works of art, which the corporation might from time to time acquire, for exhibition in the art gallery. The residue of the funds still in the hands of the corporation was to be known as "The Purchase Fund," and was to be applicable, both as regards capital and income, in defraying the costs of acquiring works of art for exhibition in the gallery. In this way Mr. Ferens provided an art gallery for Hull to be used and enjoyed as such in perpetuity by the public. The parties agree that the effect of the deeds was to make the corporation trustees of a valid charitable trust, and I think this is right. From its opening in 1928 until 1958 no attempt was, we were told, made to charge rates in respect of the gallery; but the present proposal was then made to enter it in the valuation list with a gross value of £4,700 and a rateable value of £3,913. In my opinion such a proposal is in conflict with the principle upon which the House of Lords held that Brockwell Park was exempt. That principle was that the public were in occupation of the park and therefore not rateable, and that conclusion derived in turn from the circumstance that the park and every part thereof had to be held in perpetuity for the use of the public. The same is true of the art gallery in the present case, and it can make no difference that in the one case such dedication to public use was by statute and in the other by voluntary trust.
The same principle was, in my respectful opinion, applied in this court in Burnell v. Downham Market Urban District Council, which dealt with a recreation ground held upon trust for the public, and is expressed in the concluding words of the judgment, namely: "the council were mere trustees or custodians for the public and accordingly ... the real occupiers for present purposes are the public themselves." Mr. Roots, for the appellant valuation officer, argued that the public could not in any real sense be said to occupy a building as it could be said to occupy a park. But just as the public goes to Brockwell Park to enjoy its amenities, so the public goes to this art gallery to enjoy what it has to offer - in both cases in exercise of permanent public rights. Mr. Roots also said that the public rights in relation to Brockwell Park "exhausted" its occupation. I am not sure what this means, it may be an expression in different language of the argument with which I have just dealt. An alternative contention for the appellant is that since the public is excluded from one-third of the hereditament the public has not "free and unrestricted" use of the gallery and is, therefore, not in occupation of it. This argument necessarily concedes that the public may be in occupation of such a building as this, because otherwise the contention would be irrelevant. It is admitted, however, that this one-third is used for purposes necessary and ancillary to the running of the gallery, that is to say, storage of works of art, restoration of pictures, heating and lighting, and so on. The tribunal held that the physical exclusion of the public from this portion of the hereditament was not, in the circumstances, inconsistent with occupation of the whole by the public. I agree with this conclusion and with the reasons for it given by the tribunal. The decision in Liverpool Corporation v. West Derby Union, dealing with the case of a public library, is, I think, distinguishable. There the hereditament was not held in trust solely for the public. It was the corporation's own property, bought by the corporation, and if some other building were ever substituted as the library, the corporation could sell the unwanted building and use the proceeds for different corporation purposes. That was a case, in my view, of a corporation occupying its own building as a local authority for public purposes.
The present is, I think, a case of a corporation occupying a building as a trustee, and managing it on behalf of the public. The distinction is no doubt a fine one, but it exists, as the Brockwell Park case and the Downham Market case show. In the argument before us a further question was canvassed, namely, even assuming that the corporation were in occupation of the gallery, their occupation was of any value. To be rateable it has to be shown that "the occupation should be of value beyond what is required to maintain the property; for if the occupation be of so little value that the hypothetical tenant ... would either give no rent, or a rent which after deducting the average annual expense of the maintenance, would leave no overplus, there is nothing to rate." See Jones v. Mersey Docks & Harbour Board Trustees, per Lord Blackburn. In the present case the valuation officer's figures mean that in his view the gallery would be sufficiently valuable to a hypothetical tenant that he would be willing to pay practically £4,000 a year rent for it. When it is remembered that such a hypothetical tenant would have to respect the trust upon which the building is held, this seems very unlikely. But this aspect of the matter was never canvassed before the tribunal, the parties arguing the sole question whether the corporation were in occupation at all. The question whether, if so, the occupation was beneficial depends on facts and figures not before us; and upon the questions whether a hypothetical tenant - other than the corporation - would be presumed to be with or without the income from the endowment and the purchase funds; and whether under the terms of the trust a charge could be made for admission to the gallery. If, therefore, beneficial occupation were the crucial question, I think the case would have to go back to the tribunal for a determination thereof after hearing such further evidence and arguments as the parties wished to adduce. In my opinion, however, the tribunal's decision that the public are in occupation of the hereditament is correct, and this appeal should be dismissed. I respect the contrary opinion of my brothers and, in the absence of authority, might have shared it. I feel precluded from doing so, however, since all the features of the case which they regard as making the corporation occupiers here, are matched by corresponding features in the Brockwell Park decision; and I feel that that case cannot be satisfactorily distinguished, except by tacitly accepting what was the valuation officer's principal contention: that there cannot be occupation of a building by the public where management and control of it is in some other party. I do not believe that contention to be sound. It would otherwise have provided a very short cut to the decision in Liverpool Corporation v. West Derby Union and Trustees of Sir John Soane's Museum v. St. Giles and St. George's Joint Vestry, which the courts deciding those cases could hardly have missed. Appeal allowed with costs. Declaration that the hereditament was not exempt from rating.
Leave to appeal to the House of Lords.
Smith v St Albans CC 1977 Lefore Holdings Ltd v Croydon LBC 1981 Sir Robert McAlpine & Sons v Payne 1969
References: [1969] RA 368
Lands Tribunal
This appeal raised an interesting and important question as to the rateability of huts brought on to a building site by contractors as essential adjuncts to their building operations. By a contract dated the 15th December 1964 the appellant ratepayers were appointed as contractors for the building of a multi-storey car park by the then St Pancras Metropolitan Borough Council on a site in the borough. Conditions were incorporated in the contract. By condition 21 possession of the site was given to the ratepayers on the 10th August 1964 and the date for completion (subject to extensions under condition 23) was to be the 10th August 1965. By condition 4(2) the ratepayers were to pay any rates legally demandable but could add the amount of any such rates to the contract sum., in the result therefore the ratepayers would have to pay the borough council as rating authority any rates for which they became liable and later the borough council as employers would have to repay them as part of the building cost. But this of course would happen only when the employer happened to be also the rating authority and I was told that this case was an attempt by both parties to get a decision which could be applied consistently all over the country in place of the existing variety of practice. By the bill of quantities (l/S) allowance was made for the provision of a suitable office for a general foreman and (1/11) all necessary storage sheds and for compliance with the requirements of the Factories Act 1961 and the Building (Safety, Health and Welfare) Regulations. Accordingly the rate-payers erected on one side of the site five temporary buildings. Full particulars of these huts are given in the statement of case and in a statement of agreed facts, but since nothing turns on any particular characteristics I do not think it is necessary to say more here than that they were typical builders' huts. The occupation of no I hut began on the 9th September 1964, of no 2 hut on the 21st September and of nos. 3, 4 and 5 on the 25th September, and all were removed on the 12th April 1965. All the occupations lasted therefore over six months and less than seven months.
Mr Samuel McGavin who has looked after all rating matters for the ratepayers for many years explained that contractors always wanted to have the facilities afforded by such huts as near as possible to where work was actually going on in order to save the time spent on walking. As soon as building had proceeded far enough contractors would move the offices etc into the building and remove the huts, If the contract period was for twelve months one could not anticipate the huts being there for the whole of that period.
The valuation officer made a proposal to assess the huts on the 18th February 1965. On the 19th January 1967 the matter came before a local valuation court, 'which decided that the ratepayers were in rateable occupation of the huts and directed that each should be entered separately in the valuation list at figures agreed between the parties. From that decision this appeal was brought.
Counsel for the ratepayers said that the one issue was whether the occupation of these huts had been too transient to constitute rateable occupation. The occupation had in no case exceeded seven months whereas the authorities were heavily in favour of the view that twelve months was the minimum necessary to satisfy the requirement that to be rateable the possession or occupation "must not be for too transient a period", see per Tucker LJ in JLaing (John) & Son Ltd. v. Kingswood Area Assessment Committee (19 DRA 149, 163). I will consider counsel's argument in greater detail later but I think the nature of the issue will best be appreciated if I refer first to the argument of counsel for the respondent valuation officer. He summarised his submission in reference to the particular facts of this case in which there had been occupation for a substantial period of time-over half a rate period-by huts of a substantial type requiring their own settings: I state each of these submissions in numbered paragraphs and add to each the main points he made in argument in support of them.
(1) The character of occupation is important. In deciding what is the character of a particular occupation, the period of occupation may in some cases be a relevant factor where other facts show that the case is borderline, which this case is not. In support of this submission he cited from the opinion of Viscount Kilmuir in London County Council v. Wilkins VO (27 DRA 210, 230):
"I think . . . that the test of rateability is whether there is evidence that the structures were enjoyed with the land and enhanced its value. In considering this, the intention of the erector and the other elements of annexation, period, size, quality, amenities and purpose are all material. All these factors are important . . ."
Lord Kilmuir, he said, treated "period" as one of several relevant factors not as a separate factor.
(2) Permanence or a degree of permanence is necessary for rateable occupation, but permanence is concerned with the degree of the appropria-tion of the soil and the fixed locality of the hereditament rather than with the period of time for which it exists. This view was supported by the older cases of Forrest v. Greenwich Overseers in which Lord Campbell CJ used the word "permanent" as opposed to "peripatetic"or "of no fixed locality" and of Cory v. Bristow. In R. v. St. Pancras Assessment Committee (1876) 2 QB 581 Mellor J said ((1877) 2 QB 1881, 585):
I agree with the opinion cited by Lord Hatherley in Cory v. Bristow 1877 2 APPS CAS 262 as that of Lord Campbell CJ in the case of Forrest v. Greenwich Overseers, viz. that in order to be rateable the occupation must be permanent in its nature".
Both of those opinions, said counsel for the valuation officer, equated "permanence" with "having a locality" as opposed to "fleeting": Lush J said (ibid. 589):
"Thus a transient temporary holding of land is not enough to make the holding rateable. It must be an occupation which has in it the character of permanence; a holding as a settler not as a wayfarer",
but his ratio decidendi was not the period of time of the alleged occupation; it was the character of the occupation; the itinerant showman which he used to illustrate his point might not have appropriated the soil or it might be a case of competing occupation. These older cases, counsel for the valuation officer submitted related the question of permanence to locality and the appropriation of the soil rather than to any requirement as to period of time.
(3) In this case there was permanence because soil was appropriated by the huts for a period of time determined by the ratepayers or the period required for the efficient carrying out of the building works. In London County Council v. Wilkins VO Lord Radcliffe said (27 DRA 210, 239):
It may be that 'permanent' signifies no more than continuous, as opposed to intermittent, physical possession of the soil as is suggested by the learned editors of Ryde on Rating (see 10th Ed, p 39). However that may be, it is well settled that a tenant at will has an occupation that is sufficiently permanent to carry rateability. If so I see no reason why the contractor's occupation of his huts during the pendency of the building contract should not produce a similar result."
Lord Oaksey agreed with Lord Radcliffe's opinion (ibid. 233). Lord Tucker however, counsel for the valuation officer had to admit, used language which appeared to be inconsistent with his argument: for instance he said (ibid. 24l):
"If, therefore, the sites on which these huts stood, apart altogether from the huts themselves, were exclusively and beneficially occupied by the contractors for a sufficient length of time, they would become rateable hereditaments".
Earlier, in 1948, when Lord Tucker was in the Court of Appeal, he had given the leading judgement in John Laing's case. In the course of it (19 DRA 149, 167) he cited Lord Russell of Killowen's summary of the requisites of rateable occupation in Westminster City Council v. Southern Railway Co, which included the sentence (7 DRA 137,145):
"Rateable occupation, however, must include actual possession, and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation"
and later he said (19 DRA 160, 169):
'You have to ascertain what is the quality of the occupation. If the appellants are occupying these hereditaments for the purposes and the sole purposes of their business and if . . ., then, in my view, they are in rateable occupation. I think it has been rightly stressed that what one has to determine is the quality of the occupation of the premises."
In the present case counsel for the valuation officer said there had been continuous occupation of each of these huts which the ratepayers put there intending them to remain so long as they needed them to carry out their operations and fulfil their statutory and contractual obligations. The quality of the occupation showed it to be rateable and it was illogical to change the nature of the occupation because of a time factor. It was illogical that an occupation for eleven months and thirty days should escape rateability and one for twelve months and one day should attract it. It should be observed that neither in Laing's case nor in London County Council v. Wilkins would the different approaches of the parties in the present case have resulted in different decisions, for whichever approach one adopted, there would have been a sufficient degree of permanence. It was difficult to spell out from these two cases a definite preference for either approach but in the light of the earlier cases it was enough if there was an occupation which was continuous and had a locality. He referred also to Liverpool Corporation v. Huyton with Roby Urban District Council, in which -it did seem that the divisional court's decision that the alleged occupation was too transient was based on the view that the period of occupation was not long enough but again the same decision could have been reached on his approach. It was not binding on the tribunal because it was inconsistent with the earlier authorities.
(4) Alternatively if a minimum period of occupation had to be fixed, it should be six months, not a year. No case laid down any part~ period: all said it was a question of fact. In R v. St Pancras Assessment Committee Lush J clearly thought occupation for the period of a rate, then six months, would be enough: now most rates were made for a year but were payable in six monthly instalments. He referred also to the change in the law as to the apportionment of a rate; it was now much easier.
(5) A valuation officer was entitled to make a proposal at any time during the occupation because if it turns out in the end that there is rateable occupation, that occupation began at once.
(6) The date at which to determine what was the period of occupation should be the date of the hearing. To use the position at the date of the proposal would be ridiculous once the true facts were known.
Counsel for the ratepayers said that the argument of counsel for the valuation officer was a frontal assault on the last of the four ingredients which had for over twenty years been accepted as the essential ingredients of rateable occupation. It was not really open to the tribunal to find in his favour on his main point. In Laing's case the Court of Appeal accepted "four necessary ingredients in rateable occupation", see Tucker LJ (19 DRA 149, 163), the fourth of which was the possession must not be for too transient a period", a proposition which followed Lord Russell of Killowen's statement of the general principles in Westminster City Council v. Southern Railway (7 DRA 137, 145). Jenkins J (19 DRA 149, 170) adopted the four ingredients and said as to the fourth (ibid. 171):
"I think that the fourth requirement is met by the fact that the work has taken a matter of two years to carry out".
In London County Council v. Wilkins (27 DRA 210, 226) Viscount Kilmuir referred to "the four factors or ingredients of rateability" without disapproval. Earl Jowitt had the fourth factor in mind when he said (27 DRA 210, 232):
"On the other hand, they might be of such an unsubstantial and ephemeral character as to make it obvious that they should not be rated".
Lord Oaksey (27 DRA 219, 233) accepted that to be rateable an occupation must be for a period which has been found not to be transient". Lord Radcliffe expressed no doubt that permanency was a relevant factor and said (27 DRA 210, 239): If so, eighteen months on the site does not present itself to me as something inherently too brief for rateability. The rate is an annual impost.... If such an occupation in fact endures for a year or more, I do not see why the occupier should not contribute to the current fund of the rating area for that period."
Lord Tucker (27 DRA 210, 241) said that the Lands Tribunal must be taken to have decided five points. The first was that the huts there in question constituted separate rateable hereditaments. As counsel for the ratepayers invited me to do so I record my own opinion that this method of assessment is far preferable to that of lumping a number of huts together as one hereditament: it saves in many cases a lot of unnecessary proposals to omit or insert huts as they are taken away from or come on to the site.
Lord Tucker went on to set out the other four points in much the same language as had been adopted in Laing's case, the last being (27 DRA 210, 24l):
"(5) It had a sufficient degree of 'permanence' to attract rateable liability".
He went on (ibid.): "These findings, which are all necessary before liability can attach, are largely matters of fact and degree in every case". He spoke (ibid.) of "for a sufficient length of time" and later he said (ibid. 243):
"This particular hut remained on one site for a sufficient length of time to provide the necessary element of permanence".
It was impossible in the face of these decisions to argue that the period of occupation was not a separate matter for consideration. The question of transience was not in issue in Forrest's or Cory's cases. Nor was it in London County Council v. Wilkins,. the issue there was as to the rateability of chattels and Viscount Kilmuir in the passage counsel for the valuation officer particularly relied on was only considering what facts were relevant to that issue. InField Place Caravan Parks Ltd v. BardingLord Denning MR in saying Q19661 RA 393,395):
"I put on one side any caravans which have been on the site for less than a year. They may be too transient to attract rateability,"
had adopted Lord Radcliffe's (27 DRA 219, 239):
"If such an occupation in fact endures for a year or more. . ."
In the same case in the Lands Tribunal Sir William Fitzgerald, the President, had held that the occupation up to the date of the proposal of these caravans for five, six and eleven months respectively was not sufficient to justify "the presumption of an intention of permanence" and he clearly accepted "the four essential ingredients" as settled law [1965] RA 522, 528). In G H Tawell & Son L td v. Buckingham the tribunal again accepted the four ingredients but said [1963] RA 219, 221) that in relation "to such finite considerations as the duration of a valuation list and the period of a rate" an occupation for twelve months was not transient. But more important was the decision in Liverpool Corporation v. Huyton with Roby Urban District Council in which the divisional court accepted the four ingredients as stating the law and [1964] RA 43, 47) clearly regarded the question of transience as a separate ingredient.
Counsel for the ratepayers submitted that none of the authorities even hinted that the four ingredients had been wrongly stated. They had become an accepted part of rating law. Further in those in which the duration of the necessary period was considered at all, the approach of all courts from the House of Lords downwards had been to look at the rating year as the touchstone. He accepted that the valuation officer could make a proposal before the year had elapsed but no practical difficulty would arise from that.
I found the argument of counsel for the valuation officer both interesting and forceful and if it had been made twenty years or more ago I should have had more difficulty in deciding this case. But I think counsel for the ratepayers is right in saying that this tribunal is bound by authority not to accede to it. Although it is true that the question of transience was not directly in issue in either Laing's case or London County Council v. Wilkins, the whole character of rateable occupation was considered in both. I have no doubt that the Court of Appeal in the former case accepted the proposition of the four necessary ingredients as good law and I think the House of Lords in Wilkins' case did so too. So did the divisional court in Liverpool Corporation v. Huyton with Roby Urban District Council. In none of these cases can I find any suggestion that they were wrongly stated or that the fourth ingredient was not a separate one which had to be separately considered.
There remain the questions "Is there a minimum period for establishing that an occupation is not too transient?- and if there is, What is it?" It is I think clear that for permanent buildings there is no fixed period: theoreti-cally at any rate occupation of a house or a shop for even a day could attract rateability. But the authorities I think show clearly that different considera-tions apply to temporary structures. These are less likely to be "settlers" and more likely to be "wayfarers" and of temporary structures I think these ordinary builders' huts are about the most likely to qualify as wayfarers. The duration of their stay on any defined site will be governed partly by the duration of the contract and partly by the shape and size of the building site. They are most unlikely to be there throughout the whole period of building and they may have to be moved around the site as development proceeds. In the present case, as appears from para 4 of the statement of agreed facts, three huts can be and were brought on to and removed from the site as completely erected structures and the business of assembling or dismantling a fourth is a simple one. Rider A to that statement shows that huts may well be only four or five weeks on a site. Left to myself, I think I should find as a fact that it is not until it can be established that huts of this character have been or are very likely to be on a site for twelve months or more that it is safe to say that they have lost their character of wayfarers and become settlers. But any possible doubts I might have had are dispelled by the not inconsiderable number of dicta from most eminent authorities to the effect that twelve months is safe and anything less is dubious at the least. I have referred to most of these I think in my summary of the argument of counsel for the ratepayers, and I do not think it is necessary for me to repeat the relevant passages. I know of no English case in which an occupancy which did not or was unlikely to last twelve months or more has been held to be enough for "permanence", though I was referred to the recent decision of the Scottish Lands Valuation Appeal Court in Midlothian Assessor v. William Allan Smith & Co, which might be read as a decision that seven months was enough. I am not satisfied that this was so and the case really seems to have been too much of a mix-up" to treat it as a serious decision on transience.
Fortified, as I think, by the trend of English authorities I find that the occupation of the huts in the present case, whether for six or seven months, was not long enough to satisfy the requirement that the occupation must not be for too transient a period. Once the twelve months' mark has been passed the probability is that rateability follows, but I must make it clear that this cannot be an immutable rule for facts might be proved which showed that the occupation was still transient although it had existed for more than twelve months, e.g. perhaps strikes or unusually inclement weather. Equally, it is true that facts might be proved which would justify a finding of "not too transient" even if the occupation had lasted less than twelve months. But I think that my decision would apply in the generality of cases.
On the remaining points that were argued I need not say much. I think that a valuation officer can make a proposal to enter temporary structures in the valuation list at any time during the occupation and that the question of transience can be considered not only in the light of the facts and probabilities at the date of the proposal but in the light of all facts known at the date of hearing.
In the result therefore this appeal will be allowed. The entries in the valuation fist relating to the huts in question will be struck out.
References: [1976] QB 254; 73 L.G.R. 503, CA; reversing sub nom. United Gravel Co. v. Holyoak [1973] J.P.L. 659
Court of Appeal
Lord Denning MR: When contractors build a motorway, they dig cuttings through the hills and build up embankments across the valleys. They use the soil from the cuttings to make up the embankments. But there is often not enough soil from the cuttings. So they have to get more from nearby land. They do it with huge diggers and earthmovers. They call this adjoining land a "borrow pit", that is, a pit from which they borrow the extra soil needed to make the motorway. These borrow pits are outside the line of the motorway itself. They do not form part of the land which is compulsorily acquired for the motorway. In order to get the borrow pits, the contractors will themselves make their own private arrangements with the adjoining owners. They may buy the adjoining land or pay the owner for the right to extract the soil. They get these borrow pits as close as possible to the motorways so that the big machines can move the soil quickly and directly to the embankment without going along the public highway.
We are here concerned with two borrow pits. One of them is in Wiltshire. In 1970 the M4 motorway was being built there. The contractors were Sir Robert McAlpine & Sons Ltd. They found an area of farm land which contained limestone suitable as "fill". They bought the land through an associated company, the United Gravel Co Ltd, the second ratepayers. This borrow pit was separated by a few yards from the motorway. They installed plant on it to crush the limestone and moved it by a conveyor belt into a hopper on the motorway site. They worked it in enormous quantities and at a fast pace. In six months, out of 7 ac, they moved 310,891 tons of "fill". In Gloucestershire and Wiltshire most quarries produce less than 100,000 tons in a whole year.
The local valuation court held that the borrow pit was in the rateable occupation of the second ratepayers and assessed it at £8,000 rateable value.
The other borrow pit is in county Durham. In 1967 the Durham motorway was being built. The contractors employed subcontractors for moving the earth. They were Dick Hampton (Earth Moving) Ltd, the first ratepayers. They found an area of limestone immediately adjoining the motorway. The subcontractors made arrangements with the limestone company by which they were permitted to dig out limestone, paying a price per cubic yard. They worked it at a tremendous pace. In nine months from 10 ac they took out 700,000 tons. In doing it they completely obliterated the boundary with the motorway. The borrow pit and the motorway were just one big excavation with nothing to show on the ground between them. The subcontractors, for those nine months, occupied the borrow pit and motorway together as one.
The local valuation court held that the borrow pit was in the rateable occupation of the first ratepayers and assessed it at £13,000 rateable value.
On appeal, the Lands Tribunal held that the borrow pits were not rateable at all; and the valuation officer appeals to this court.
Was the occupation too transient?
In giving its decision, the Lands Tribunal said, [1973] RA 227,
" There is no doubt that one of the ingredients of rateable occupation is that the occupation shall not be too transient. . . . In [cases] which related to temporary structures the courts seem to have accepted as a general working rule that occupation for a year or more is not too transient and the implication has been that if it has been for less than a year, it is too transient.... These borrow pits are closely comparable to temporary structures like builders' huts. Applying the working rule established for such structures it appears to us that the occupation was too transient to constitute rateable occupation and we hold this as a matter of fact ".
It has often been stated that one of the necessary ingredients of rateable occupation is that "possession must not be for too transient a period", J. Laing & Son v. Kingswood A.C [1949] 1 KB 344, 350; London County Council v. Wilkins VO, [1955] 2 QB 653, 672; and in relation to builders' huts, that 12 months is the working rule. More than 12 months, there is rateable occupation: less than 12 months, no rateable occupation: see McAlpine (Sir Robert) & Sons Ltd. v. Payne VO [1969] RA 368.
It is, I think, a mistake to elevate this ingredient into a principle of law or to construct out of it any working rule. It started with an observation made 100 years ago by Lush J in R. v. St. Pancras Assessment Committee (1876) 2 QB 581. That case concerned an advertisement hoarding put up as a temporary structure. Lush J compared it to an itinerant showman who puts up roundabouts or swings. He said, p 589:
"Thus a transient, temporary holding of land is not enough to make the holding rateable. It must be an occupation which has in it the character of permanence; a holding as a settler and not as a wayfarer".
It is out of those few words that this so called necessary ingredient has sprung. But it is to be noticed that in the only case in the House of Lords, London County Council v. Wilkins VO,, there is nothing to support it. Lord Tucker only said, [1957] AC 362, 387, that there must be a sufficient degree of "permanence" to attract rateable value; and he put "permanence" in inverted commas.
Looking at the matter afresh, I can well see that, when you are considering temporary structures, it would not be right to hold one rateable unless there is something permanent about it. A holiday maker who pitches his tent in a field for a fortnight is not in rateable occupation. Nor is the showman who puts up his roundabout or swings for the fair. But a man who occupies a bookstall or kiosk regularly for his business is rateable. As Lord Russell of Killowen said in Westminster Corporation v. Southern Rail Co. [1936] AC 511, 529, when dealing with bookstalls and kiosks at Victoria Station:
"Rateable occupation however, must include actual possession, and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation".
I do not think that those cases about temporary structures have any application at all to these borrow pits. If some degree of " permanence " is necessary, these borrow pits are as permanent as anything could be. The landscape has been changed for ever. Huge slices have been dug out of the hillside. They have left gaping voids which will never be filled up. They are far more permanent than the most massive of buildings. It has all been done in a few months. But I cannot believe that that is a ground for exemption from rates. It cannot depend on how many machines the contractors have available; or whether they do it in 11 months or in 13 months. I cannot accept the supposed " working rule " of 12 months. No matter whether the extraction only takes six months or nine months, they are in the rateable occupation of the contractors.
I see no difference between these borrow pits and quarries. In R v. Westbrook (1847) 10 QB 207, Lord Denman CJ took the case of a brickfield worked out in less than a year to meet some enormous contract for a public work. He clearly thought it was rateable, the value being assessed according to the output, see Gilbard (VO) v. Amey Roadstone Corporation Ltd. So here I hold these borrow pits to be rateable.
Separability
Another point was taken by the contractors. They said that the motorway itself was not rateable. So also the borrow pits ought not to be. In Arbuckle Smith & Co. Ltd. v. Greenock Corporation [1960] 813 A.C. the House of Lords had to consider whether a warehouse was rateable. It was empty but was being extensively altered so as to qualify as a bonded warehouse. The House held that the making of alterations did not constitute rateable occupation. So applying that case, it is said that the contractors were not in rateable occupation of the site of the motorway itself. This was accepted by counsel for the valuation officer.
The contractors said that, if they are not in occupation of the site of the motorway, it follows that they are not in occupation of the site of the borrow pit. At any rate, not in the case from Durham when the first ratepayers were the contractors: because it is all one big site. The argument went in this way: looking at it, no one could say, " his is the boundary of the borrow pit: this is the boundary of the motorway". It is all one. The diggers and earth movers cross it as one. So that there is but one occupation of the whole. If the motorway is not in rateable occupation; neither is the borrow pit.
This argument has a superficial attraction. The two sites are used so much as one that they might in the ordinary way be regarded as a single hereditament for rating purposes. But the authorities show that there are exceptional cases where an apparently single site may be treated as two or more hereditaments, see Gilbert VO v. S. Hickinbottom & Co Ltd [1956] 2 QB 240, 248. This is I think an exceptional case. The contractors occupy the two sites in two different capacities. They occupy the site of the motorway in their capacity as contractors doing the work of constructing the motorway. and therefore exempt from rating. But they occupy the site of the borrow pit in their capacity as suppliers of material, like the occupiers of a quarry supplying material for use elsewhere. These two different capacities mean that there are two separate hereditaments, the motorway site is not rateable, but the borrow pit is rateable.
Conclusion
The Lands Tribunal said that it is a matter of fact. I do not think so. The primary facts were not in dispute. The inference from them is a matter of law, so that it is open to review in this court. In my opinion the borrow pits are rateable. They are in the occupation of the contractors who dig out the soil for use elsewhere. I would allow the appeals accordingly.
ROSKILL LJ: I greatly hesitate to disagree with Sir Michael Rowe QC and Mr R C G Fennell on a matter of rating law but I am clearly of the opinion that the Lands Tribunal, of which they were the two members concerned, have erred in law and that these two appeals must be allowed, the decisions of the two local valuation courts restored and the respective figures of £8,000 and £13,000 restored to the relevant valuation lists.
These two cases afford an interesting and at the same time curious illustration of the haphazard and sometimes unsatisfactory way in which English law develops through successive judicial decisions. A judge uses a phrase in a judgement; a phrase which may or may not have been carefully chosen is used as apposite to a particular background of fact. Some years later that phrase is borrowed, may be by another court or by counsel arguing another case, and applied to facts widely different from those with which the first case was concerned. Perhaps half a century later, those two decisions (and perhaps others which have been given during the intervening period) are sought to be applied to yet another case where the facts are entirely different and the phrase originally used in relation to particular facts of restricted application becomes elevated into a rule of law, the purpose of the original use of the phrase and the background to that original use having meanwhile been overlooked or forgotten or sometimes completely misunderstood.
Let me illustrate how this has happened in the present case. Almost 98 years ago to the day in R. v. St. Pancras Assessment Committee (1876) 2 QB 581 the divisional court (Mellor J and Lush J) was concerned to determine whether the appellant, who was not the occupier of the premises in question but had obtained permission to use them for advertising purposes, was liable to assessment for rates. The appellant had placed advertising boards outside the wall on the ground in the street, leaning against the outside face of the wall which ran along the front of the premises. Inside the wall he had let into the earth some ordinary scaffolding posts to which, at such a height as could be seen from the street above the boards, a horizontal framework was fastened on which advertisements were exhibited, the hoarding being supported by struts carried back at an angle. The appellant was assessed by the rating authority to rates in respect of these 14 advertising stations as they were called. The divisional court held that he was not liable to be so assessed. The reasons for this conclusion were succinctly stated by Mellor J at the beginning of his judgement (1877) 2 QB 581, 585. He said:
"I agree with the opinion cited by Lord Hatherley in Cory v. Bristow as that of Lord Campbell CJ in the case of R v. Forrest, viz. that in order to be rateable the occupation must be permanent in its nature. The word 'permanent' may not appear in every one of the judgements delivered at various times as a description of the kind of occupation necessary, but in the particular cases where no reference is made to the quality of permanence, as being a necessary element the facts spoke for themselves with regard to this point ".
Mr Justice Lush, after emphasising at p 588 the necessary element of permanence, said at p 589:
"Thus a transient, temporary holding of land is not enough to make the holding rateable. It must be an occupation which has in it the character of permanence; a holding as a settler not as a wayfarer".
Two observations may be made about these two sentences used by Lush J in his judgement. Firstly, the phrase "transient, temporary holding of land" is used in antithesis to "permanent" holding of land; secondly, the adjective "transient" is clearly used in addition to the adjective " temporary " in order to emphasise the need for permanence to be shown before liability to assessment for rates can attach. Yet from this use of this adjective "transient" it has been suggested that a so called "principle of transience", to use the phrase used during the argument, exists and has to be applied in the present case. In my judgement, as my Lord has already said, that is wrong. The relevant principle I venture to think is " permanence " ot transience".
I can pass to 1948, noting without stopping to read the judgement of Lord Alverstone CJ in Mitchell Brothers v. Worksop Union Assessment Committee (1904) 92 LT 62, 64. In 1948, J. Laing & Son v. Kingswood A.C came before this court. It was concerned with the liability of building contractors to be assessed to rates on structures erected on a site on which they were working, that site not being otherwise liable to assessment to rates. It was held that the contractors, by reason of the erection of these structures, acquired a beneficial occupation and therefore were liable to be assessed for rates.
In the course of his successful submission for the respondent rating authority, Mr Michael Rowe QC formulated four essential elements in rateable occupation, [1948] 1 KB 344, 348. The fourth element was: "the possession must not be for too transient a period ". That fourth element might, I venture to think, have been equally well expressed by saying that the possession must have the necessary degree of permanence. See Westminster Corporation v. Southern Rail Co. [1936] AC 511, 529 per Lord Russell of Killowen quoted by Tucker J in his judgement at p 354 of the report in Laing's case. But be that as it may, Mr Rowe's propositions (including the fourth) were expressly approved and applied in this court, especially by Jenkins J at p 357. But it must be remembered that they were approved and applied for the purpose of determining the crucial question was the party sought to be made liable for rates in beneficial occupation of the hereditament?
I turn next to London County Council v. Wilkins VO, [1955] 2 QB 653 (in this court) and [1957] AC 362(in the House of Lords); again a case of structures erected on a building site. This time the landowners failed, notwithstanding the argument of Mr Michael Rowe QC in the House of Lords on their behalf. Mr Rowe's four tests were referred to in argument in this court at p 658, and in the judgement of Jenkins LJ at pp 661 2 of the respective reports; but, of course, again only for the purpose already mentioned. They were again referred to in the House of Lords in argument (p 365) and by Viscount Kilmuir LC in his speech at pp 369 and 370. But I draw attention to the emphasis placed on the word "permanence", in inverted commas, in the speeches of Lord Radcliffe at p 381 and Lord Tucker at p 384. Clearly the length of time during which the structures were on site was regarded as a factor, and indeed an important factor, to be regarded in determining whether the necessary quality of " permanence " had been established by the valuation officer.
The next relevant case is McAlpine (Sir Robert) & Sons Ltd. v. Payne VO [1969] RA 368, a decision of Sir Michael Rowe himself as President of the Lands Tribunal and not the subject of appeal by the valuation officer who was unsuccessful. This again was a building hut case in which the contractors were successful. In a long and careful review of the authorities Sir Michael considered whether there was a minimum period of occupation which had to be found in order to establish that the occupation was not too "transient", and, if so, what the minimum period was. But the very posing of that question shows that the question of "transience" was by now being, or at least in danger of being, elevated to a question of legal principle instead of being treated as a factor, albeit often an important factor, in the class of case then under consideration, to be considered in determining whether or not the requisite quality of permanence was present. We were told that in the "building hut" cases 12 months has been taken as the working rule. I say nothing to disturb a practice which no doubt has been found administratively convenient in a particular class of case. But the existence of an administratively convenient practice must not be allowed to obscure what is the real question of principle involved, the determination whether the occupation is of sufficient permanence as properly to amount to beneficial occupation. It cannot be right in every case of every kind where this question arises to answer it by reference solely to the question whether the period of occupation is a few months, weeks or days more or less than some arbitrary period such as the 12 months period which I have mentioned.
Yet, with the most profound respect, that is precisely what the Lands Tribunal has done in the present case, though it points out that the "rule (as it calls it, though I question the use of that word if it is intended to indicate something more than an administratively convenient practice) is not immutable. It has taken this so called most bodily to entirely different circumstances from those in which it has hitherto been used (see pp 8 and 9 of the decision). It has described the two respondent companies as "wayfarers" a word clearly borrowed from Lush J's judgement to which I have already referred.
But these two companies were to my mind anything but wayfarers. They properly and lawfully moved hundreds of thousands of tons of material and wholly altered the contours and appearance of the two sites with which we are concerned. This is hardly the action of a wayfarer or indeed of those in mere transient occupation. Counsel for the ratepayers argued that if we reversed the Lands Tribunal we would be saying that transience had ceased to be one of the four relevant factors. I do not agree. It will always be a factor in determining whether or not the requisite element of permanence is present, but the degree of importance attaching to this factor must vary with the circumstances of the particular case. In the present class of case I regard the period of occupation as of vastly less importance than its quality and its consequences. I am therefore of the clear view that the ground on which the Lands Tribunal decided these appeals in favour of the respondent ratepayers cannot be supported, for the wrong test was applied by it. On the facts found each company was, in my view, plainly in beneficial occupation of the sites for the periods in question, and, in Lord Radcliffe's phrase in the Wilkins case, [1957] AC 352, 382, should " contribute to the current fund of the rating area " for those periods, unless, of course, counsel can make good his second point, on which he failed before the Lands Tribunal.
As regards the second submission, counsel for the ratepayers first sought to found on the decision of the House of Lords in Arbuckle Smith & Co. Ltd. v. Greenock Corporation [1960] 813 A.C. . With respect, I cannot see how that case assists the argument or is indeed in any way relevant to it. The decision was that the appellants, not previously in beneficial occupation of a building designated as a bonded warehouse, did not acquire such occupation during the period when the building was being made fit for that use. Counsel's real submission, as it ultimately emerged, was that motorways during construction are not rateable hereditaments, that therefore neither the relevant parts of the M4 nor those of the Durham motorway were so rateable, and that the sites adjacent thereto which the two respondent ratepayers were using were all part and parcel of the sites of the motorways under construction and thus were not separate rateable hereditaments. Adroitly he took the Durham case first because in that case there are photographs annexed to the special case which show that during construction it was difficult, if not impossible, for the eye to distinguish between the intended site of the motorway and the site from which the material was being moved to the motorway. He accepted that in the Wiltshire case there was a far greater degree of physical separation.
I do not think that this question, which is largely one of fact, can be determined simply by looking at photographs taken during construction. The principles applicable were considered by this court in Gilbert VO v. S. Hickinbottom & Co Ltd, [1956] 2 QB 40, especially in the judgement of Parker LJ at p 54. The Lands Tribunal clearly had this decision in mind because it used the phrase "draw a ring round each of the pits", which is plainly borrowed from Parker LJ's judgement. This was a matter for the tribunal a and I see no error in law in the essential part of its decision, though I am afraid I am not able to follow the reference to the ratepayers' employees' " change of hats " when crossing from pits on to the motorway sites. I think the Lands Tribunal must have meant to indicate that the quality and character of the ratepayers' occupation (a) of the pits and (b) of the motorway sites changed as their employees crossed from the one to the other; but the point is not of importance. Like my Lord, I think that these appeals must be allowed.
ORMROD, LJ: The decision of the Lands Tribunal on the first part of this case is a striking example of a legal phenomenon which was vividly described by the late Frankfurter J in these words:
"A phrase begins life as a literary expression; its felicity leads to its lazy repetition; and repetition soon establishes it as a legal formula, indiscriminately used, to express different and sometimes contradictory ideas".
(Tiller v. Atlantic Coast Hire Railroad Co (1943) 318 US 54, 68). The phrase in the present case is "not too transient" or its equivalent expressed in terms of "permanence".
The ratio of the Lands Tribunal's decision is to be found at pp 8 and 9 of its decision; it is unnecessary to quote it again in full, but it is quite clear that by the time of its decision "transience" was being used in a purely temporal sense. Under what was referred to as " the general working rule " it had come to mean "less than 12 months", with the astonishing result that an earth moving contractor who had succeeded in removing something in excess of 400,000 tons of material from a "borrow pit" under his control, within the 12 months period, must, if the tribunal's decision is right in this case, be held not to be in rateable occupation of the borrow pit, whereas another contractor, working on the adjoining sector of a motorway on which work had proceeded more slowly so that it took him rather more than 12 months to extract a similar quantity of material from his borrow pit must be held to be in rateable occupation of it.
"An excellent illustration of the extent to which uncritical use of words bedevils the law,"
to quote Frankfurter J again.
The first time the word "transient" appears to have been used in this context is in the judgement of Lush J in R. v. St. Pancras Assessment Committee (1876) 2 QB 581. By 1949, in J. Laing & Son v. Kingswood A.C (1949), it had become enshrined, in the form "not too transient", as the fourth of the four essential characteristics of rateability, which were subsequently accepted and adopted by the House of Lords in London County Council v. Wilkins VO,. These latter cases were concerned with the rateability of temporary builders' huts on construction sites which had been in situ, in each case, for periods in excess of one year, and it was held that such occupation of the land on which they stood was "not too transient" to escape liability for rates. This seems to have led to the subsequent adoption of a general working rule for builders' huts, occupation for less than 12 months coming to be regarded as the equivalent of "too transient", so that Lush J's original phrase has been transposed into an arbitrary time limit, which may well be a convenient time scale in relation to builders' huts but becomes wholly irrational when applied to such an intensive type of occupation that, within the time limit, the occupier is found to have removed many hundreds of thousands of tons of material from the occupied land. We are, of course, bound by the Wilkins case to have regard to the quality of "transience" or "permanence" in deciding whether a given occupation of land is or is not a rateable occupation, but this time scale must be adjusted to the other characteristics of the occupation if absurd results are to be avoided. The absurdity of the present case can be gauged from the fact that the tribunal felt able to regard the earth moving companies in this case as "wayfarers" rather than "settlers", to quote Lush J again.
Fixed time limits are in any event inappropriate. A tenant under a lease for six months, even a tenant at will, is undoubtedly in rateable occupation because first, he is shown beyond doubt to be the occupier, and secondly his occupation has sufficient permanence because he is not a "wayfarer or a "transient". If the first ratepayers had taken a mining lease from Cornforth for six months of the land from which they extracted the extra material required for the construction of their sector of the motorway, their occupation could not have been distinguished for rating purposes from the occupation of the tenant of a house under a six months lease. The second ratepayers were actually the freeholders of the borrow pit from which they extracted their material, so that there could be no doubt that they were not only in occupation of it but were in " permanent " occupation of it so long as they were working it.
In many of the reported cases the "permanence or the transience" of the occupation was primarily relevant to the question of which of two alternative persons should be regarded as the occupier of the land, particularly where it is sought to establish occupation of the land and therefore rateable occupation by proving that one of them has placed some kind of temporary structure on the land. In such cases an advertising hoarding resting on the surface of the ground or some fair ground vehicle parked on the land for short periods (Liverpool Corporation v. Huyton with Roby Urban District Council)may amount strictly in law to occupation of the land so long as the hoarding or the vehicles are standing on it; but whether such technical occupation amounts to rateable occupation will depend on the precise facts of each case, in other words, it will be a matter of fact and degree. But where there is no competing occupier, as in the case of a tenant under a lease for six months, the time element becomes of much less relevance to establishing liability to rates, although, of course, the shortness of the occupation will be reflected in the assessment.
In my judgement, therefore, it is a mistake to place too much emphasis in this context on the words "permanence" or "transience". They have become to some extent terms of art and have lost their ordinary meaning. It is worth noticing that between Laing's case and London County Council v. Wilkins VO, these words had acquired inverted commas, in the reports of some of their Lordship's speeches. On the other hand, there are many other passages, both in the judgements in Laing's case and in the speeches in London County Council v. Wilkins VO,, which indicate that to determine whether an occupation is rateable or not regard must be had to all the qualities or characteristics of the occupation. See in particular Laing's case [1949] 1 KB 344, 356, and Lord Kilmuir's speech in London County Council v. Wilkins VO, [1957] AC 362, 374. Indeed, if we are to keep these terms " permanence " and " transience " in perspective reference must be made to other passages in Lush J's judgement in the St Pancras case. The learned judge said, (1877) 2 QBD 581, 589:
"I do not agree with Mr Castle that the word 'permanence' is used in this class of cases in the sense of being continuous as to its use, but I think it is used in the sense of being permanently attached to the ground as a fixture. It would be an abuse of language to say that the owner of a post lying upon the ground is thereby occupier of the ground upon which the post rests, however long it may be there; but if the post is inserted into the ground, or otherwise so attached to it that it cannot be severed from the land without breaking up the soil, it has become one with the soil, and the owner of the post is thereby occupier of the soil to which it is annexed."
A little earlier in his judgement he had said:
" As the poor rate is not made day by day or week by week, but for months in advance, it would be absurd to hold that a person, who comes into a parish with the intention to remain there for a few days or a week only, incurs a liability to maintain the poor for the next six months ".
That passage is interesting. The learned judge is contrasting the concept of transience with that of a moral responsibility for the poor of the neighbourhood and therefore liability to pay the " poor rate ". In 1877 this linkage may have been quite natural, but with the changing character of rates, its relevance has disappeared.
For these reasons I can see no escape from the conclusion that the Lands Tribunal misdirected itself in law by applying the wrong test of "permanence" and that had it approached this question correctly, it must have held on this aspect of the case that the occupation of the ratepayers of their respective borrow pits was rateable occupation.
On the second part of this case, i.e. on the point raised by the ratepayers' notice, counsel for the ratepayers is on stronger ground, at least so far as the first ratepayers are concerned. He has argued that the first ratepayers' use of their borrow pit was part and parcel of, and indistinguishable from, the motorway construction work on which they were engaged. They were earth movers and were engaged in an enormous "cut" and "fill" operation, moving earth from the cuttings and filling up the hollows with it. There was insufficient suitable "cut" to complete the "fill". So they merely extended their earth moving over land immediately adjacent to part of the motorway site, in which they had found suitable material for filling. They had merely, though on a large scale, enlarged the "cut" in that area of their operations. Consequently, the borrow pit should be regarded as part of the construction site the occupation of which it is common ground is not rateable. The layout in the first ratepayers' case gives some plausibility to this argument but, when it is applied to the second ratepayers' case, the difficulties in it become apparent. The second ratepayers were not themselves actually engaged on any part of the construction site. They were however an associated company of McAlpines' who were the subcontractors and were supplying and processing the material from the borrow pit for them under an informal agreement. The fact remains, however, that the second ratepayers were in occupation of and working this borrow pit as free holders, supplying their own material to McAlpines from their own land. In their case it is impossible, in my judgement, to regard their occupation of the borrow pit as being anything but a separate and distinct occupation from McAlpines' or the Department of the Environment's occupation of the motorway site. In the first ratepayers' case the position when looked at closely is the same. They too were working the borrow pit on their own account, supplying their material to the department in addition to the " fill " produced as part of the process of levelling the motorway site, and processing it as might be necessary, receiving for it a different rate of payment from that which was paid for work on the motorway site itself. In my judgement, therefore, the tribunal's decision on this part of the case was right. In the result I agree that this appeal should be allowed.
Appeals allowed.
United Gravel Co Ltd v Selick 1975 R v St Pancras AC
R V. THE ASSESSMENT COMMITTEE OF ST. PANCRAS
References: (1877) 2 QB 581
Divisional Court
MELLOR, J. I am of opinion that in determining this case, we must, in accordance with the principle laid down by the judges in the case of Smith v. St. Michael, Cambridge , look to what was the substance of the relation between the parties, and not to isolated expressions, such as the word "rent," used in the course of the transaction. I agree with the opinion cited by Lord Hatherley in Cory v. Bristow 1877 2 APPS CAS 262 as that of Lord Campbell, C.J, in the case of Forrest v. Overseers of Greenwich, viz., that in order to be rateable the occupation must be permanent in its nature. The word "permanent" may not appear in every one of the judgments delivered at various times as a description of the kind of occupation necessary, but in the particular cases where no reference is made to the quality of permanence as being a necessary element the facts spoke for themselves with regard to this point. Assuming, therefore, that the occupation must be permanent, let us look at the facts in the present case. I can see no sound distinction between the two assessments in question. They are both cases in which, in my opinion, the effect of the facts stated is that the occupation of the property was in a person other than the party assessed. In the case of the cottage, it was a dilapidated suburban villa, only inhabited by a caretaker, and had been so for some years, though continuously advertised as to be let or sold. In front of the cottage were placed these advertising boards, as described in the case. It does not appear to me that upon the facts as set forth there was anything that could be said to be an occupation of these premises, or any part of them, by any person other than the owner.
While the premises remained unlet and were in the custody of a caretaker, as described, negotiations took place between the owner and Mr. Willing as to the use of the premises for the purpose of the advertisements of the latter. In the correspondence on this subject the word "rent" is no doubt used, but regarding the transaction in the manner sanctioned in the case of Smith v. St. Michael, Cambridge, viz., not by the light of particular expressions, such as "rent," but with reference to the substantial intention of the parties, can it be supposed that it ever was the intention of the owner, in allowing Mr. Willing to affix these hoardings, to part thereby with the exclusive occupation of any part of the premises? Or was it not rather his intention to grant to Mr. Willing what has been spoken of as a licence in the nature of an easement for the mere temporary use of the land for the purpose of advertising? It seems to me, looking at all the circumstances of the case, that the latter was his intention. The case seems to me to be distinguishable from that of Cory v. Bristow 1877 2 APPS CAS 262, and the judgment of the House of Lords appeals to me abundantly to justify the distinction I am now drawing. There is not here, as there was in the case of Cory v. Bristow 1877 2 APPS CAS 262, any exclusive occupation of land by the party rated of a permanent nature, such as can be the subject of rating. The other case, as it seems to me, does not substantially differ. There the owner, while certain houses were being rebuilt, permitted the use of the premises in much the same way, but, as it seems to us, he only intended to give a licence in the nature of an easement, as described in the case of Watkins v. Overseers of Milton, so to use them during the rebuilding, and not to part with the exclusive occupation of any part of the land. It may possibly be that the result of the use of the premises as described would be to enhance the value of the premises in the hands of the occupier, so that they would be of some value in respect of the amount produced by way of payment for the use of them for advertising purposes, instead of being of no value as unoccupied premises, and that in respect of such value the occupier might be rated. I am disposed to think it would be so. But it is not necessary to decide this point. The question for us is whether the appellant is rateable. It seems to us that he is not, and that the present case is distinguishable from all the cases that have been cited where there has been held to be a rateable occupation. It is not necessary to go through the cases. In the case of Cory v. Bristow, for instance, the very nature of the structure which the conservators allowed to be put up immediately distinguishes the case from the present. James, L.J., there says: "There is no dispute as to the general principle of law, viz., that where any part of the soil is permanently occupied by anybody for profitable purposes, as, for instance, where it is occupied by a company by means of its water or gas pipes or telegraph posts, then the person so occupying is rateable in respect of such occupation; but when a person has a mere right to use the land in the nature of an easement, and the occupation remains in somebody else, as, for example, in the case of a lodger, when the occupation remains in the lodging-house keeper, then such person is not liable to be rated." The other judges also took the same view. In such a case as that of the telegraph posts the occupation of the soil was obviously intended to be permanent, subject to a slight alteration of the position of the posts if found inconvenient. I am not disposed to draw subtle distinctions between cases substantially identical, but we must, before we can come to a conclusion in favour of rateability, see that there is an occupation of a permanent character, and not a merely permissive licence to use the premises in the nature of an easement. In my opinion the owner of the premises in the present cases did not intend to part with the exclusive occupation of them. For these reasons I am of opinion that in neither of these cases was the appellant rateable.
LUSH, J. The only question for us is whether Mr. Willing is rateable. I wish to be considered as expressing no opinion on the question whether the use of the premises as described could be considered as enhancing the rateable value of the premises in any other person's hands. The question we have to decide is, whether the appellant was an "occupier of land" within the meaning of the statute of Elizabeth.
It is not easy to give an accurate and exhaustive definition of the word "occupier." Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a vacant house is in possession, and may maintain trespass against any one who invades it, but as long as he leaves it vacant he is not rateable for it as an occupier. If, however, he furnishes it, and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may not reside in it one day in a year.
On the other hand, a person who, without having any title, takes actual possession of a house or piece of land, whether by leave of the owner or against his will, is the occupier of it. Another element, however, besides actual possession of the land, is necessary to constitute the kind of occupation which the Act contemplates, and that is permanence. An itinerant showman who erects a temporary structure for his performances, may be in exclusive actual possession, and may, with strict grammatical propriety, be said to occupy the ground on which his structure is placed, but it is clear that he is not such an occupier as the statute intends. As the poor-rate is not made day by day or week by week, but for months in advance, it would be absurd to hold that a person, who comes into a parish with the intention to remain there a few days or a week only, incurs a liability to maintain the poor for the next six months. Thus a transient, temporary holding of land is not enough to make the holding rateable. It must be an occupation which has in it the character of permanence; a holding as a settler not as a wayfarer. These I take to be the essential elements of what is called a beneficial or rateable occupation, and to these tests we must revert in cases like the present, which seem to be on the borderland, and to present at first sight considerable difficulty. When the subject of occupation is not a surface area - which is the idea primarily suggested by the phrase "occupier of land" - but only a small portion of the soil, so much of it as contains a post, a pipe, or a rail, the element of permanence or its absence is shewn by the way in which the post, etc., is connected with the soil. I do not agree with Mr. castle that the word "permanence" is used in this class of cases in the sense of being continuous as to its use, but I think it is used in the sense of being permanently attached to the ground as a fixture. It would be an abuse of language to say that the owner of a post lying upon the ground is thereby occupier of the ground upon which the post rests, however long it may be there; but if the post is inserted into the ground, or otherwise so attached to it that it cannot be severed from the land without breaking up the soil, it has become one with the soil, and the owner of the post is thereby occupier of the soil to which it is annexed.
This element pervades the cases of water-mains, gas-mains, telegraph posts, tramways, mooring posts, and other like cases, in all of which, where the rateable quality has been affirmed, the ruling idea is, that by the made of attachment the chattel has been merged in the soil, so that by means of that which has been embedded in or fixed to the land the owner of it occupies the land itself. Tried by this test, which explains and reconciles the cases cited in the argument, the appellant is not occupier of any land by means of the hoarding in the first case or the poles in the other. It is impossible to hold that any land was demised to Mr. Willing in either case. What he paid for was merely a licence to use the premises as he did. The distinction which the justices have made between the two cases cannot be maintained. In neither case has anything been so annexed to the soil as to become a fixture. In the second case, which is the stronger of the two, the poles are merely let into the ground in holes dug for the purpose, but they are not in any way attached to the soil, and may be removed without disturbing it. They are as much chattels as if they lay upon the ground instead of standing on it.
For these reasons I am of opinion that the order of sessions in the first case must be affirmed, and in the second quashed.
Hall v Darwen Corp. & Silcock Bros (Amusements) Ltd 1957 John Laing v Kingswood AC 1949
COURT OF APPEAL
[1949] 1 KB 344, [1949] 1 All ER 224, 47 LGR 64, 65 TLR 80, 113 JP 111, 42 R&IT 15, 152 EG 482, [1948] EGD 226, [1949] WN 12
TUCKER, L.J.: This is an appeal from a judgment of the Divisional Court on a Special Case stated under the Quarter Sessions Act, 1849 (Baines' Act) with regard to the rateability of certain hereditaments which were being used by the contractors, John Laing & Son, Ltd., for the purposes of and in the course of the carrying out of a contract into which they had entered for the making and extension hereditaments, and, accordingly, the Case was remitted to quarter sessions with the opinion of the court so expressed. LORD GODDARD, C.J., in the course of his judgment described the matter as follows ([1948] 1 All E.R. 945):
"The ratepayers, Messrs. John Laing & Son, Ltd., who are public works contractors, have undertaken a contract with the Secretary of State for Air for the construction of a runway, landing ground and other works at Filton aerodrome. The provisions of the contract require them to do certain things which necessitate the putting up of buildings. Whether these are huts, or whether they are made of breeze or brick, seems to me to be immaterial. No one suggests that the buildings are likely to be permanent, in the sense that they will remain after the work of construction has been done. The contract provides that at the end of the work of construction these buildings and other erections, some of which are foundations for mounting heavy machinery, are to be taken away, and, indeed, the supervising officer, who is in the service of the Crown, can order them to be taken away at any minute."
In para. 5 the Case sets out that the work, the nature of which is specified in the conditions of contract, the specification, and bills of quantities, involved:
"... the strengthening, widening and lengthening of the east-west runway and the preparation of the landing ground and demolition of buildings at Filton Aerodrome, in the county of Gloucester."
Paragraph 6 states:
"On June 26, 1946, a part of the site was handed over to the contractors for the assembly of plant and offices, and the remainder of the site on which constructional work is to be carried out under the said contract was handed over in sections as it became available. The contract date for completion was May 26, 1947 (being 11 months from June 26, 1946), but circumstances have arisen which entitled the contractors to an extension of time under the said contract and it is not expected that the works will be completed until the end of March, 1948, though sections of completed work may be handed over to the authority before that date."
Paragraph 7 describes the hereditaments in question. I need not refer to them all, but Reference Nos. 1, 2, 10, 12, 13 and 14 relate to offices, and No. 3 to garages, Nos. 4 and 11 are weigh-bridge huts, No. 5 is the workmen's canteen, No. 6 is the carpenters' shop, and Nos. 8, 9, 15, 16, 17, 19, 21, 18, 20, 23 and 22 are all to do with foundations or erections of some kind in connection with the concrete mixing plant.
The whole Case, as I read it, is stated on the assumption that these hereditaments are rateable hereditaments. There is nothing in it which would entitle us to draw any distinction between any one of them and another, except in so far as any distinction can be obtained from the contract. It may be open in other similar cases to argue that some of the hereditaments are of such a nature that, whatever their occupation, they are not capable of being rated, but no point is taken in the present case with regard to that. Nothing that I am deciding can be quoted as an authority for the proposition that anything which answers the description of some of the places or erections described in para. 7 is, as a matter of law, rateable in all circumstances.
The decision in this case primarily depends on the proper construction to be put on the general conditions (General Conditions of Government Contracts for Building and Civil Engineering Works) which form the contract between the parties. The point taken before us for the contractors is that which appears in para. 19(A) of the Case, viz.:
"They are not the occupiers of the said premises in that their use of the same is subject to the control and directions of the said superintending officer and they have not paramount occupation thereof."
It would appear that that point had not figured, at any rate, prominently, in the argument in the court below, which had primarily been directed to the contentions which appear in para. 19(B), viz.:
"If they are occupiers of the said premises or any of them, such occupation is not beneficial"
for the reasons which are then set out.
Counsel for the rating authorities has said that there are four necessary ingredients in rateable occupation, and I do not think there is any controversy with regard to those ingredients. First, there must be actual occupation; secondly, it must be exclusive for the particular purposes of the possessor; thirdly, the possession must be of some value or benefit to the possessor; and, fourthly, the possession must not be for too transient a period. The primary question here is whether the contractors are in actual and exclusive occupation of these hereditaments.
Counsel for the contractors argues that, on examination of the contract between the parties, it will be found that they are not in exclusive possession. Although at the outset this case was presented rather as one in which there were competing occupants, or persons who could be regarded as competing occupants, and the question was whose was the paramount occupancy, I think that the point is more accurately stated in the way in which counsel for the contractors put it in his final address, i.e., the question is not whether there are competing occupants, but whether there is any real occupation by the contractors, or whether the true position is not that they are really in occupation on behalf of someone else, viz., the Crown, for whose purpose (counsel says) they are on the site, carrying out the works in question. Counsel for the contractors says that this case is similar to the occupation of a servant rather than to that in such cases as Westminster Corpn. v. Southern Ry. Co., Railway Assessment Authority and Smith & Son, Ltd. where the railway company were admittedly in occupation of the whole of Victoria Station, but certain portions of it were held to be in rateable occupation of other persons, either as tenants or licencees.
To solve this question it is necessary to look with care and in some detail at the contract. I do not propose to read all the conditions relied on, but in the abstract of particulars (in appendix I to the Case) which are to be read in conjunction with the general conditions of contract, it is provided:
"Date for completion shall be the date of the day after the expiration of a period of 11 months from the date on which possession of the site is given to the contractor."
Paragraph 1 of the general conditions, the definition paragraph, provides:
"(2) (b) 'The site' shall mean the lands and/or other places on, into or through which work is to be executed under the contract or any adjacent land, path or street which may be allotted or used for the purpose of carrying out the contract."
Condition 3 provides that all materials and equipment brought on to the site in connection with the contract, "shall become the property of and vest in the authority" [the Secretary of State for Air]. That condition, of course, deals with property, whereas we are concerned with occupation. Condition 6 provides:
"Possession of the site or the order to commence shall be given to the contractor by notice in writing, and the contractor shall thereupon commence the execution of the works and shall proceed with diligence..."
By condition 7:
"(1) The contractor shall carry out and complete the execution of the works to the satisfaction of the superintending officer who may from time to time issue further drawings details and/or instructions directions and explanations (all of which are hereafter collectively referred to as 'the superintending officer's instructions')."
Then there are enumerated a number of matters with regard to which he can give those instructions. They include:
"(c) The removal from the site of any materials... (d) The removal and/or re-execution of any work... (h) The dismissal of any foreman or person below that grade employed in connection with the contract... (l) The use of materials obtained from excavations on the site. (m) Any other matter as to which it is necessary or expedient for the superintending officer to give instructions, directions or explanations."
Condition 7 also provides:
"The decision of the superintending officer that any such instructions are necessary or expendient shall be final and conclusive..."
Condition 13 deals with materials and workmanship and provides:
"The superintending officer and his representative shall have power at any time to inspect and examine any part of the works or any materials intended to be used in or on the works either on the site or at any factory or workshop or other place where such parts or materials are being constructed or manufactured or at any place where the same are lying or from which they are being obtained, and the contractor shall give all such facilities as the superintending officer may require to be given for such inspection and examination."
Condition 16 deals with the hours of work and provides that they shall be subject to the approval of the superintending officer. Conditions 17, 18 and 19 deal with watching, lighting and protection of works, precautions to prevent nuisance, and the removal of rubbish. Those are all obligations put on the contractor. He is to provide all watchmen necessary for the protection of the site, take reasonable precautions to prevent nuisance or inconvenience to the owners, tenants or occupiers of other premises, and keep the site free from rubbish.
Condition 26 provides:
"(1) All plant, temporary buildings, equipment and things on the site provided by or on behalf of the contractor for the construction of but not for incorporation in the works shall stand at the risk and be in the sole charge of the contractor, and the contractor shall be responsible for, and with all possible speed make good, any loss or damage thereto arising from any cause whatsoever, including the accepted risks."
By condition 33:
"The contractor shall employ a competent agent to whom directions may be given by the superintending officer. The agent shall superintend the execution of the works generally with such assistance in each trade as the superintending officer may consider necessary."
Condition 36 gives the superintending officer power to require the contractor:
"... immediately to cease to employ... any foreman or person below that grade whose continued employment thereon is in the opinion of the superintending officer undesirable."
By condition 44 (1) the authority is empowered to determine the contract at any time by notice in writing, and condition 44 (2) (A), which is relied on, provides that the authority shall:
"... as soon as practicable, and in any case not later than the expiration of 3 months from the date of such notice or of the period up to the date for completion, whichever is the shorter, give directions (with which the contractor shall comply with all reasonable dispatch) as to all or any of the following matters... (iii) the removal of all plant, temporary buildings and equipment from the site."
It is to be observed, however, that this condition is dealing with something which is to happen on the determination of the contract and, in my view, accordingly, is not so material as some of the other conditions. Finally, condition 56 provides:
"The contractor shall take all reasonable steps to ensure that no alien, or person of dual nationality, unless the prior permission in writing of the authority has been obtained, shall be admitted to the site. The superintending officer shall have power to exclude from the site any person whose admission thereto may in his opinion be undesirable for any reason whatsoever."
Condition 57 deals with the issuing of passes, which in the hands and under the authority of the superintending officer.
It is said by counsel for the contractors that the very extensive powers conferred on the superintending officer are such that the contractors cannot be regarded as being in exclusive occupation of this hereditament. He seeks to distinguish this case on its facts from the Southern Railway case). It is common ground that the principles to be applied to these facts are to be found in the Southern Railway case. Those principles were stated by LORD RUSSELL OF KILLOWEN ([1936] 2 All E.R. 326):
"In the next place I would make a few general observations upon rateable occupation. Subject to special enactments, people are rated as occupiers of land, land being understood as including not only the surface of the earth but all strata above or below. The occupier, not the land, is rateable; but, the occupier is rateable in respect of the land which he occupies. Occupation, however, is not synonymous with legal possession: the owner of an empty house has the legal possession, but he is not in rateable occupation. Rateable occupation, however, must include actual possession, and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation. Where there is no rival claimant to the occupancy, no difficulty can arise; but in certain cases there may be a rival occupancy in some person who, to some extent, may have occupancy rights over the premises. The question in every such case must be one of fact, viz., whose position in relation to occupation is paramount, and whose position in relation to occupation is subordinate; but, in my opinion, the question must be considered and answered in regard to the position and rights of the parties in the premises in question, and in regard to the purpose of the occupation of those premises. In other words, in the present case, the question must be, not who is in paramount occupation of the station, within whose confines the premises in question are situate, but who is in paramount occupation of the particular premises in question."
LORD RUSSELL OF KILLOWEN continued (ibid., 328):
"In truth the effect of the alleged control upon the question of rateable occupation must depend upon the facts in every case; and in my opinion in each case the degree of the control must be examined, and the examination must be directed to the extent to which its exercise would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them, or would be inconsistent with his enjoyment of them to the substantial exclusion of all other persons."
I emphasise the words "would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them." Later, LORD RUSSELL said (ibid., 329):
"In my opinion the crucial question must always be what in fact is the occupation in respect of which someone is alleged to be rateable, and it is immaterial whether the title to occupy is attributable to a lease, a licence, or an easement."
LORD WRIGHT, M.R., referring to Cory v. Bristow said ([1936] 2 All E.R. 343):
"The decision is important as showing that a person no less occupies in the rating sense because he does so subject to regulations or by-laws or is liable to be turned out on short notice."
After quoting from Cory v. Bristow , LORD WRIGHT said (ibid.):
"And further, LORD CAIRNS also refers to the fact that Messrs. Cory were to work to the satisfaction of the conservators under the inspection of the harbour master: he points out that Messrs. Cory were none the less in rateable occupation because they were required to obey the conservators' by-laws, and were to work to the satisfaction of the conservators and subject to definite limitations, and were liable to be ejected on notice."
LORD WRIGHT continued (ibid., 344):
"The railway company have no doubt quite properly imposed such restrictions as seemed necessary for the proper working of the station as a whole. They have reserved the right to close the station each night, and also a special right to close temporarily in cases of emergency: but these are merely restrictions on the tenants' user and enjoyment, and do not change their character or make the occupation other than a sole and exclusive occupation. The tenant is still in sole occupation of his premises, and has full use of them to carry on his business. As one indication of this I may refer to the terms of the agreements which give the railway company limited rights of entering for specific purposes, e.g., to view the state of repair, and so forth. These terms indicate a possession in the tenant adverse to the landlord."
After quoting from Holywell Union and Halkyn Parish v. Halkyn Drainage Co. LORD WRIGHT said (ibid.):
"As to the closing of the station at night, this is done outside business hours and as MacKinnon, J., shrewdly observes, is rather an advantage to the tenants, because it tends to obviate the risk of burglary to which lock-up shops in public thoroughfares are peculiarly exposed. It is obvious that the tenant's occupation is continuous, because at night he occupies by his goods. The tenant is the person entitled to exclude trespassers, e.g., from the bank or Boots' shop, or to bring ejectment."
Those are the general principles which we have to endeavour to apply to the facts of this case. We have to ascertain what is the quality of the occupation. If the contractors are occupying these hereditaments for the sole purposes of their business and if the measure of control retained by the authority is not such as to alter the character and quality of their occupation, then, in my view, they are in rateable occupation. The measure of control by the authority in carrying out the contract is a different thing from a control interfering with the exclusive occupation of the hereditament. On reading the conditions in this contract and comparing this case with the Southern Railway case and the principles there enunciated, the conclusion I have arrived at is that in this case the authority had not such control as to render the occupation of the contractors an occupation which is not rateable. In other words, I think the real control exercised by the authority was a control with regard to the performance of the contract and not a control which interfered with the exclusive occupation of the hereditament by the contractors for the purposes of their work.
Before passing from the Southern Railway case it is necessary to say a word about the decision of the Divisional Court in Cleveland Bridge & Engineering Co., Ltd. v. Darlington Union Assessment Committee . That case was in many respects very similar to the present, but, when the judgments are examined, it is clear, I think, that they (or two of them, at any rate) are based, entirely, on the decision in Smith v. Lambeth Assessment Committee which can no longer be regarded as binding since the decision of the House of Lords in the Southern Railway case. In the Darlington case BRANSON, J., although he spoke of the undisputed principle of law which applied to that case -- that undisputed principle appearing to be that laid down in Smith v. Lambeth Assessment Committee - none the less based his judgment on the Holywell Union case (3), putting it on the basis of paramount and subordinate occupation. However that may be, the Darlington case (4) was cited to their Lordships in the Southern Railway case (1) and I think can no longer be regarded as good law. For these reasons, this appeal fails and must be dismissed.
ASQUITH, L.J.: I entirely agree and have nothing to add.
JENKINS, J.: Adopting the four factors or ingredients of rateability, as submitted by counsel for the rating authority, it is obvious on the facts here that the first is satisfied because the contractors were clearly in actual possession of the hereditaments claimed to be rateable. Secondly, I think that their possession was exclusively for the particular purpose for which they occupied the premises, viz., the carrying out of the contract. I think that the exclusive character of their possession appears if the distinction is kept clearly in mind between general control exercised by the superintending officer over the site as a whole and the general carrying out of the contract, on the one hand, and the position with regard to particular parts of the site alleged to be in the occupation of the contractors, on the other hand. So far as those particular parts of the site were concerned, it seems to me that their possession was none the less exclusive because they were subject to the general controlling authority of the superintending officer. Thirdly, it is said that the possession must be of some use or value or benefit to the possessor, but as to that it seems to me enough to say that the contractors occupied those premises for the purposes of their business and it is immaterial that their business consisted of the carrying out for reward of a particular constructional project. Fourthly, it is said that the possession must not be for too transient a period. I think that fourth requirement is met by the fact that the work has taken a matter of two years to carry out. All four tests, therefore, being satisfied, I agree that the appeal fails and should be dismissed.
LAING (J.) AND SON, LTD. V. KINGSWOOD ASSESSMENT COMMITTEE AND OTHERS. (KBD)
KING'S BENCH DIVISION
[1948] 2 KB 116, [1948] 1 All ER 943, 41 R&IT 232, 151 EG 411, [1948] WN 187
LORD GODDARD, C.J.: This is a Special Case stated under the Quarter Sessions Act, 1849, s. 11, and it raises an interesting question which has never come before the court, I think, in exactly the way in which it does in this case. The question that has to be determined is whether contractors who are working on a site for the construction of large public works -- in this case an aerodrome -- are liable to be rated, not, of course, in respect of the aerodrome, but in respect of buildings which they have themselves constructed for the purpose of the works which they have to carry out. In substance, the position is this. The ratepayers, Messrs. John Laing & Son, Ltd., who are public works contractors, have undertaken a contract with the Secretary of State for Air for the construction of a runway, landing ground and other works at Filton aerodrome. The provisions of the contract require them to do certain things which necessitate the putting up of buildings. Whether these are huts, or whether they are made of breeze or brick, seems to me to be immaterial. No one suggests that the buildings are likely to be permanent, in the sense that they will remain after the work of construction has been done. The contract provides that at the end of the work of construction these buildings and other erections, some of which are foundations for mounting heavy machinery, are to be taken away, and, indeed, the supervising officer, who is in the service of the Crown, can order them to be taken away at any minute. Counsel for the contractors has told us that this case is brought to test whether contractors who undertake this class of work are rateable in respect of the land occupied by their buildings and erections, and no point is taken that the work is being done on Crown land, or for the Crown, or whether or not the hereditament is an industrial hereditament. Nor are we concerned with regard to any question of values or figures. The hereditament which is rated comprises offices, garages, huts, canteen, carpenters' shop, and the bases or foundations for the mixers and other heavy pieces of machinery which, if the contractors are rateable, fall within class 4 of the schedule to the Plant and Machinery (Valuation for Rating) Order, 1927 (S.R. & O., 1927, No. 480) as "plant or a combination of plant and machinery," and are rateable under that Order.
The argument of counsel for the contractors has largely been based on the Rating and Valuation Act, 1925, s.37(10), which provides:
Subject as hereinafter provided, an amendment made in the valuation list in pursuance of this section shall, in relation to any rate current at the date when the proposal in pursuance of which the amendment was made was served on the rating authority, or, where notice of the proposal was given to the occupier or owner, as the case may be, of the hereditament affected, current at the date when the notice was so given, be deemed to have had effect as from the commencement of the period in respect of which the rate was made... Provided that, in the case of an amendment consisting of the inclusion in the valuation list either of a newly-erected or newly-constructed hereditament or an altered hereditament which has been out of occupation on account of structural alterations, or of the alteration in the valuation list of the value of any hereditament, where the value thereof has been affected by the making of structural alterations or by the total or partial destruction of any building... the amendment shall have effect only as from the date when the new or altered hereditament comes into occupation...
Counsel for the contractors says that, as this aerodrome is in course of erection and has not yet come into occupation, the contractors' buildings must be in the same position. Speaking for myself, I cannot see that that argument is sound or that that conclusion can be drawn from the words of the proviso to s. 37 (10), because that which the rating authority here seek to rate has been constructed and has come into occupation. Take, for instance, the workmen's canteen, which seems to me to be an apt illustration of the buildings in question. The contract obliged the contractors to provide a canteen for the workmen who are on the premises, and this meant that the contractors had to erect a building of some material, it matters not what, for the cooks to prepare the meals and for the men to sit in and eat them. That building has been erected and occupied and is in daily use. Therefore, it seems to me that in respect of that building the contractors cannot avail themselves of the proviso to s.37(10). It is true that the building is in one sense ancillary to the main undertaking, the aerodrome, but only in the sense that, if the aerodrome was not being constructed, the building would not be there. Besides the mess canteen, the other portions of the hereditament which it is sought to rate here have all been erected to enable the contractors to carry on their business of constructing this aerodrome. It is not the whole of their business, no doubt, because they may be doing work in other parts of England at the same time, but they have to find a place on which to store the material and erect their mixers, and do a variety of other things connected with the construction of this aerodrome. Counsel for the contractors concedes that these structures would at once become rateable if they were put on a field or a site which did not belong to the owners of the aerodrome. They would become rateable because they were occupied. They are occupied here.
The argument of counsel for the contractors would be stronger, I think, if Smith v. Lambeth Assessment Committee were still law, but that case has been overruled by Westminster Corpn. v. Southern Ry. Co., Railway Assessment Authority and Smith & Son, Ltd. . It is there laid down [per LORD RUSSELL OF KILLOWEN ([1936]2 All E.R. 322, 329)] -- and the House of Lords has now established for all time, unless and until it is reversed by legislation -- that:
... the crucial question must always be what in fact is the occupation in respect of which someone is alleged to be rateable, and it is immaterial whether the title to occupy is attributable to a lease, a licence, or an easement.
In this case the title is attributable to a licence, because, if the building owner allows the contractor to come on his land and erect buildings for the purpose of carrying out the contract and allows his land to be occupied for the storage, not merely of a bucket or half a dozen scaffolding poles, but of hundreds of tons of cement and other material which it would be inconvenient to bring on day by day and which is, therefore, kept in a "dump" on the site, he has certainly given the contractor a licence. It seems to me that the contractor is occupying that land as a licensee to carry on his business, and so has a beneficial occupation. He is enabled, by reason of his occupation, to carry out the contract which he has undertaken. If he did not occupy that land, he would have to occupy some other land, of which he would have a beneficial occupation.
If this case goes on appeal and our decision is upheld, it may be that rating authorities will claim to include in their valuation lists hereditaments which hitherto have not been included, on the ground that there is an occupation by building contractors, or builders, of the land on which buildings are being constructed, but it must always be borne in mind that the occupation must be something more than a mere transient or purely temporary occupation. An illustration was given of the showman's van which comes on land for a short period of a day or two, or a week, and it was said that it would be absurd to make the showman responsible for maintaining the poor in the parish for six months when he only entertains the poor in the parish for, perhaps, two nights. The rating authorities would, probably, not be entitled to rate a man who is building a small house, and, for the purpose of convenience, puts a load of sand or gravel on the land on which he is going to build. Each case must depend on its own facts, but in this case the building is occupying a considerable period.
Applying the principles which I find laid down very clearly in the judgment of LORD RUSSELL OF KILLOWEN in the Westminster case, I feel bound to answer the question raised in the Special Case, viz., whether the contractors are in rateable occupation of all or any of the structures comprised in the hereditament, in the affirmative and to say that they are.
HUMPHREYS, J.: I agree with the judgment of my Lord. For my part, I always approach these difficult and complicated questions of rating with great diffidence and I like to be able to found my judgment on what I regard as the plain language of a statute. I think it is possible to do so here, because I find in s. 37 (10) of the Rating and Valuation Act, 1925, a provision that:
... in the case of an amendment consisting of the inclusion in the valuation list... of a newly-erected or newly-constructed hereditament... the amendment shall have effect only as from the date when the new... hereditament comes into occupation...
That is a very plain direction that, if a new building is added to other buildings already on the land, the new building shall not be rated until it comes into occupation, but shall then be rated like any other building. Here the Case states that there was a proposal by the rating authority to amend the current valuation list by adding thereto a hereditament situate near Charlton Runway described as "contractors' offices, canteens, huts, structures, land, etc." As I understand it, these are completed structures, and the Case states that they are being used by the contractors for the purpose of their business. I assume that they are all necessary for the business. Some of them (e.g., the offices and canteen for the use of the men employed in the construction) were required by the building owner, who is the Crown, and the contractors were obliged to provide them under the contract. That being so, I ask myself: Why should not these new buildings, now that they have come into occupation, be rated? The answer of counsel for the contractors is that had they been in the occupation of the building owner and not been the subject of a building contract, the owner would not have been liable because they were only temporary and comparatively unimportant parts of a great work (viz., an aerodrome which was being constructed), and would be pulled down and taken away when the work was completed. I do not think that that is a correct proposition. We are dealing, not with a building owner who is himself constructing a large number of buildings, but with a contractor who has built and completed a large number of buildings. I fail to appreciate the argument that, because he is a building contractor and still has a great deal of work to do in other parts of the land which is the subject of the building, he should escape having to pay rates in respect of those buildings which he has completed. On that short ground I base my judgment in this case, and I agree with the result proposed by my Lord.
PRITCHARD, J.: I only desire to say that, for the reasons which have already been given, I think that the answer to the question which we are asked to answer is that the contractors are in rateable occupation of the hereditament particularised in th
LCC v Wilkins 1956 Cory v Bristow 1877
CORY & OTHERS V. BRISTOW (HL)
References: (1877), 2 App. Cas. 262
House of Lords
Lord CAIRNS LC. : My Lords, the question raised by this appeal is whether the appellants are rateable to the relief of the poor of the parish of Greenwich under a rate or assessment which has been made against them. In the assessment, the description of the property rated is thus given: first, "Moorings to which coal derrick and apparatus, Atlas No. 1, are moored to bed of river;" second, "Moorings to which coal derrick and apparatus, No. 2, are moored to bed of river;" so that the subject matter, in respect of which the appellants are said to be rateable, is, certain moorings by which a certain coal derrick is moored to the bed of the river Thames.
With regard to Atlas No. 1, the case states that it is "moored or retained at the spot where she floats in the following way, viz., by two single fluke anchors on the side nearest the shore, by two stones on the channel side, and by two stream anchors, one at her head, and the other at her stern." It is also stated that having been formerly in another position than that which she now occupies, in moving her from the former position, the four anchors and the chain cables by which she had then been attached to the mooring were removed with her, and two of them were put down again in mooring her at her present moorings, and that those two are two of the four to which I have already referred. It is stated in paragraph 12 that the moorings as actually laid down for Atlas No. 1, consist of "four anchors and two stones" and that of those anchors "the two named in paragraph 8," that is to say, the two which had followed her from the place where she previously had been moored, which had been taken on board and brought with her, those two are "small and of little importance." "And it is not contended on the part of the defendant that any liability to be rated in respect of the soil occupied by them attaches to the plaintiffs." I ask your Lordships' attention to that, because it appears that there are two of these anchors, which are part of the equipment of the ship, and followed her from her previous moorings, and are dropped at her present moorings, and it is not said that they constitute any moorings in respect of which rateability will arise.
"But the other two anchors are made with only one fluke each, and are such as are never used as anchors on board ship, but are only used for permanent moorings. Anchors with one fluke could not be trusted to take the ground when dropped in the ordinary way. In laying down each of these anchors, a hole was dredged out large enough to contain the whole of the anchor, and to a depth between seven and eight feet below the river. The anchor was then carefully laid on with the fluke downwards, and the hole was afterwards filled up to the level of the bed of the river with ballast, which lies all round and over the anchor, through which ballast the chain cable is led up to the derrick."
Then the 13th paragraph states,
"The two stones used are each of them about seven feet long by five wide and three thick. In order to put each of these in their places a hole was dredged out large enough to contain the stone, and about seven feet deep. The stone was then let down into the hole, and the hole then filled up to the level of the bed of the river with ballast. There is about a four feet thickness of ballast on each stone, and about seventy tons of ballast are used in each hole, a chain cable is led up through the ballast to the derrick. The moorings formed by these two anchors and stones are as firm moorings as it is possible to place in the river. It is quite impossible that the derrick using them can weigh them in the ordinary way in which ships weigh anchor. If the derrick had to be moved, it could only be by casting off the cables and leaving these anchors and stones behind."
Now, my Lords, by whom was this work done of embedding these moorings in the soil of the river? That is stated in the 11th paragraph
"Instead of themselves laying down the moorings contemplated by the said resolution" (to that I shall afterwards have to refer it is the resolution authorising this work), "the plaintiffs caused and procured the necessary work to be done by the workmen of the said Conservators, and paid the said Conservators the whole of the costs and charges of the materials and labour expended in and about the same."
Therefore your Lordships will take it that it is just as if the present appellants had themselves, by their own servants, purchased the materials which were necessary for these moorings, and then by permission of those who could authorise them, laid the moorings down in the bed of the river.
With regard to the other moorings, there is some difference in the way in which they have been made. As to them, your Lordships find this statement in the 16th paragraph:
"The material position of the moorings of 'Atlas No. 2' consists of two anchors, similar to the anchors mentioned in paragraph 12, but having iron instead of wooden stocks," "but instead of the stones used for 'Atlas No. 1' two large fan shaped screws have been used. These are screwed into the bed of the river to a depth of ten feet, in the manner shown upon the plan marked 'A', annexed hereto, which is to be taken as part of this case. These screws, together with the two single fluke anchors, form moorings as permanent as those used for 'Atlas No. 1,' and it would be equally impossible for the derrick using them to weigh them in the ordinary way."
Those, my Lords, being the facts with regard to these moorings, I will in the first place ask your Lordships to observe how completely they differ the case from one which was referred to in the argument, a case in which the present appellants appear to have been the plaintiffs on a former occasion against the same defendants, the overseers and churchwardens of Greenwich. That case is reported; it is Cory v. Greenwich Churchwardens. The facts of that case were these: There was a derrick which, as regards that which was above water, appears to have been of the same character as those which I have just mentioned, and it was moored in the river, but it was moored simply in this way: "by two single fluke anchors on the side nearest the shore, and by two stones on the channel side, and by two stream anchors, one at the head and the other at the stern. The anchors and stones were merely dropped into the river, no force being used for the purpose of fastening either anchors or stones. Before dropping the stones, a small quantity of ballast was removed in the bed of the river, so that the stones might lie flat." My Lords, under these circumstances, it was held that the moorings were not immovable from the bed of the river, that they were only, as the late Mr. Justice WILLES expressed it, "part of the equipment of the vessel itself," and that therefore there were no moorings which could be said to be fixed to the soil of the river and to be occupied as part of the soil by the plaintiffs.
That, my Lords, I think, puts aside that authority, and will enable your Lordships, having regard to the facts which are found in the present case, to arrive, as I think you will, without hesitation, at the conclusion that you have here moorings which are clearly fixed into and bedded in the soil of the river Thames, just as much as if piles had been driven ten or twenty feet deep into the soil, and that if you find any person in occupation of those moorings, and that occupation is a beneficial occupation, the person so occupying is occupying hereditaments within the statutes which create chargeability to the assessment to the poor.
Well, then, my Lords, there arises the other question. Who is the occupier of these moorings? In the first place, to whom do the moorings belong? Unquestionably they belong to the present appellants. They do not belong to the Conservators of the river, they were not paid for by the Conservators of the river, they were provided by the appellants out of their own money, and put down at their own expense. And this circumstance differs the present case most materially from the second case, which was very much pressed in argument upon your Lordships. I mean the case within the jurisdiction of the Conservators of the river, the case of Watkins v. Milton Overseers.
In that case there was a coal hulk which was moored in the River Thames for the purpose of containing about 1600 tons of coal which were put out of lighters into the hulk and then again distributed, as occasion required, in other lighters when wanted for use. This hulk was moored in the river Thames within the parish of Milton, near Gravesend, and it was moored in this way: There were two screw piles driven into the bed of the river, driven in by the Conservators, and belonging to the Conservators, and a license or permission was granted by the Conservators to the owner of this hulk to moor or attach his hulk to these piles so driven into the bed of the river. It does not appear from the agreement in the case that this was an exclusive permission given to the owner of this hulk only; and if I were to judge by the agreement alone, I should have said that it might have been in the power of the Conservators either to have attached a vessel of their own, if they had one, to the same screw piles, or to have allowed some other person to attach a vessel or hulk of his. However, I see that the learned judges assume that it ought to be looked at, and therefore I prefer to look at it, as if exclusive permission had been given to the owner of the hulk to attach, as in point of fact for several years he had attached, his hulk to the piles.
But, my Lords, that case turns entirely upon this, that the owner of the hulk, who was the person rated, was not in occupation of these moorings. The moorings were not his the moorings were the moorings of the Conservators, and the Conservators, having these moorings belonging to themselves, gave him the permission to attach his hulk to these moorings. The court held, and I will assume rightly held, because it does not bear in any way upon the facts of the present case, that that was merely a permission to attach the hulk to the moorings of the Conservators, and that there was no occupation by the owner of the hulk of the moorings of the Conservators.
My Lords, be that case correctly decided or not, it has no bearing upon the facts of the present case, where your Lordships find moorings put down by the appellants, paid for by the appellants, belonging to the appellants, used by the appellants, and used by the appellants alone, and with regard to which either you must arrive, as it seems to me, at this conclusion, that they are occupied by no person whatever, or if they are occupied by any one, that they are occupied by the appellants.
But, my Lords, it remains to look more accurately at what is the character of the occupation of the appellants, and how it is that they come to have the occupation of these moorings. For the purpose of rating it might indeed be sufficient to look at the mere fact of occupation. They are found in occupation of that which is to them a valuable occupation of this fixed property, and are therefore rateable to the relief of the poor, even though it might turn out that their occupation is a wrongful one, or one the propriety of which they cannot justify. But when your Lordships look at the circumstances under which they have come into that occupation, it appears to me that their possession of the moorings is a rightful one, and is itself to be designated, according to the most accurate expression, an "occupation" of the moorings. Their occupation arises in this way: the Conservators of the Thames, as your Lordships well know, have, under the Act of 1857, carried over to them, and brought into their proprietorship, all the rights in the bed and soil of the River Thames which belonged to the Crown, or which were claimed by the Corporation of London. They are made the guardians, as it were, of the navigation of the Thames, and the protectors of the bed and soil of the Thames for the purpose of the navigation. They have certain powers very large powers given to them for the protection of the navigation; they have certain powers for making bylaws to protect the navigation; they have powers to make piers and landing places for the accommodation of the public; and they have powers to authorise riparian owners to make landing places, and wharves, and jetties, and to put down mooring chains and moorings for the better and more convenient enjoyment of, and access to, their lands.
The course which in this particular case appears to have been taken was this: an application being made by the appellants Messrs. Cory & Son, to the Conservators, a resolution was passed in these words:
"That permission be given to Messrs. Cory & Son to lay down moorings (at which they may place derrick hulk) immediately opposite the sluice next eastwards of Angerstein's Wharf, East Greenwich, and 510 feet from the river wall at the sluice as per plan, the work to be done to the satisfaction of the Conservators of the River Thames and under the inspection of the harbour master, and to remain on the following conditions being agreed to and observed by Messrs. Cory, viz., that the accommodation be assessed, and the rent paid thereon,"
that is to say, that the clause of the Act of Parliament should be complied with which provided that none of these permissions should be given to any riparian proprietor as a matter of favour or of indulgence, but merely upon the proper assessment by the proper officer as to the value of the permission given;
"that the hulk be not used for the purpose of storing coals; that it be for the general use of the coal trade, but the barges to or from the hulk be in all cases towed by a steam tug to or from the Custom House, London; that all vessels leave the hulk immediately after being discharged, and that sailing colliers when discharged be towed away to such part of the river as the harbour master may direct, and in all other respects to be worked to the satisfaction of the Conservators under the inspection of the harbour master; and with the full understanding on the part of Messrs. Cory, that if at any time hereafter it shall be found by the Conservators inexpedient to permit the moorings for the derrick hulks to remain in that or any other part of the river the Conservators will, under the powers vested in them by the 91st section of the Thames Conservancy Act, cause the same to be removed,"
that is to say, Messrs. Cory are warned at the end of this agreement that the Conservators will retain the statutory right given them by the 91st section of the Thames Conservancy Act of causing the moorings at any time they think fit to be removed on giving a week's notice; but, subject to that right of removing them by their statutory power at a week's notice, the moorings will be allowed to remain, the rent assessed upon them being regularly paid.
Now, my Lords, as I read that, putting aside the words and looking at the real substance of the transaction, I cannot look upon it as otherwise than an exercise on the part of the Conservators of their parliamentary powers, by giving to Messrs. Cory a right to lay down these moorings, and also a right, after the moorings are laid down, to occupy them through the instrumentality of this derrick, until, in the exercise of the same parliamentary powers, and upon a week's notice being given, the Conservators shall remove them from their occupation.
Therefore it seems to me that your Lordships have here a fixed property found in the occupation of the Messrs. Cory to an occupation of which fixed property no person else can set up any claim, and that done under an exercise by the Conservators of powers which appear to me to provide for and to authorise, if it were necessary to find authority for it, an occupation of that particular kind.
On the whole, my Lords, I must say I am entirely satisfied with the unanimous judgement of the learned judges of the Court of Appeal, and I submit therefore to your Lordships that this being a case of error, judgement here also should pass for the defendant in error.
Lord HATHERLEY :My Lords, I take the same view of this case which has been expressed by my noble and learned friend on the woolsack.
The two questions to which, as it appears to me, we have to direct our attention, and to which indeed our attention has been most ably directed by Mr. Thesiger and Mr. Patchett are these: first, what is the nature of the interest conferred by the agreement or permission set forth in the case before us; and secondly, when we have ascertained the character of that interest, what is the nature of the occupation which has been exercised by the appellants in this case?
As Lord CAMPBELL expresses it in one of the cases last cited, as regards the nature of the occupation the question is, whether it be "a permanent and profitable occupation of land within the parish" which seeks to assess the person in respect of such occupation. As regards the interest of the person who is so to be rated it must be an interest in himself exclusively. On the first part the argument turned upon the latter branch of the case, namely, whether the appellants had got such an occupation under this instrument as would make them liable to rating. I apprehend that in ascertaining the answer to that question the courts have not meant by the term "exclusively" that the interest may not be determined on certain terms and conditions, but merely that the person so occupying should have the right unattended by a simultaneous right of any other person in respect of the
same subject matter.
An illustration has been given in the course of the argument, which is commonly given in cases of this character, that of a landlord of an hotel, or the landlord of a lodging house, in which case although a person sleeping at the hotel may have the exclusive use of his bedroom for the night, or the exclusive use of a sitting room during the day, or a lodger the exclusive use of the chambers he occupies, still there is a concurrent right reserved by the landlord of the hotel or the person who lets the lodgings, of using the hotel or lodging house for whatever purposes he may think fit for managing the establishment and all purposes connected with it. That is not such an occupation on the part of the lodger or the guest at the hotel as would make him liable to be rated.
But in the present case all the argument has turned upon this, that independently of the question whether or not this be a license or in the nature of a demise, inasmuch as there are certain bye laws which may be made from time to time by the Conservators, who have given this permission, and inasmuch as by the 91st section of the Act the power of any person to have this beneficial occupation may be determined on a week's notice, therefore, there is not conferred on the Messrs. Cory the exclusive possession of these mooring chains which they have been in the river as is described in the case. I apprehend my Lords, that it would be a confusion of ideas to say that it interferes with the exclusive possession any more than a right of re entry on the part of a landlord in certain given events could be said to interfere in any way with the right of the tenant during the time he is holding. He is in beneficial occupation for a term, though that term is limited by certain contingencies which may possibly determine his interest at an earlier period.
Now, my Lords, what is done by this agreement? A permission is granted to Mr. Cory to lay down mooring chains according to the powers vested in the Conservators pursuant to the 58th section of the Act; and when laid down they are to remain. He is to do that at his own expense, and he is to do it to the satisfaction of the officers appointed for that purpose by the Conservators, a phrase which would not be used with respect to any work they were to do themselves. That approbation is to be obtained, because the person who is to do this work is a person who is to make his mooring chains in such a manner as would be satisfactory to the Conservators, and when he has done that they must remain, unless a notice be given pursuant to the 91st section, or unless a change is made by the bye laws, he being subject possibly to the bye laws which may be made by the Conservators for the better regulation of their business. But independently of these bye laws, independently of anything arising upon the 91st section, the mooring chains are to remain, and during the whole of that time he is in exclusive possession and in permanent possession in the sense in which that word is used in cases of this description, and in profitable possession.
I cannot find anything on the face of the instrument that can intimate any doubt at all upon that being the character of his possession, the remaining of these mooring chains, of which he is to make use, being secured to him subject only to those contingencies which he has agreed upon, but the possession being full and complete until those contingencies occur.
It was observed by Mr. Patchett, just now, that in Watkins' Case the Conservators did the work, and he said, "So they did here"; but that really is a fallacy, and a transparent fallacy. They did not do any portion of the work here; it was simply that instead of hiring another set of labourers the Messrs. Cory hired the labourers of the Conservators, which I apprehend they were at perfect liberty to do, if the Conservators were willing that they should be so employed; and they paid the Conservators for those labourers whom they so employed in execution of the work. In other words, the Messrs. Cory did the work through the medium of employing a particular agency; that agency makes no difference in their position. The work was entirely done by the Messrs. Cory, and they having done this work, all the other conditions in the agreement were also fulfilled, one of which was that the rent was to be assessed in the course provided by the Act, which was done, and it was assessed at a tolerably high figure. All that having been done, it seems to me that Messrs. Cory became the owners, and, subject to the events which might determine the ownership under the permission, the sole and complete owners of this profitable tenement.
Then the question arises, are the Messrs. Cory the owners in the sense of being occupiers of land situate within the parish? My Lords, I can have no doubt upon that point when I look at the nature and the character of these mooring chains. They are described in the papers before us, and the case is thereby at once differed from two or three of the cases which have been cited, one being with reference to a floating dock, and another being with reference to an arrangement by which these mooring chains were sunk as they were sunk here, but fixed so far less than here, that they were capable of being moved like other anchors, whereas here they were sunk and fixed, and would have to be hauled up by means of machinery in a derrick. That alters the present case from the case of a floating dock which is, as it were, a vessel floating about upon the water, and which cannot be said to have any immovability whatever in any given parish, and so can hardly be subject to rates. The circumstances in the other case that the derrick itself, by its own instrumentality, could haul up the stones and mooring chains just as it could any anchor, reduced it again to the case' of a ship, of which it could not be predicated that it occupied land situated within a parish.
But here we are told by the case itself that the derrick cannot be removed at all except by slipping its chain and cables, because the stones and the rest of the apparatus are so fixed in the bed of the river as to prevent their being hauled up or got up, except by some much more energetic mode of removal. It is not a nice question here, as was said in part of the argument, between the possibility of moving a more or a less great weight, but these circumstances indicate the intention, from the very first, of all the parties to the agreement that it should be a fixed and permanent mooring chain, subject only to such contingencies as might arise in the execution of the works of the Conservators, if anything should occur to require its removal.
My Lords, I think that none of the cases has been in the slightest degree brought up to such a case as we have here before us. I cannot have any doubt whatever that there is a permanent beneficial interest liable to be divested in certain given contingencies as I have described, that it is a valuable and an exclusive interest, and that it is an interest situate in the bed of the river within the parish of Greenwich; and therefore that it is liable to be rated.
Lord O'HAGAN: My Lords, in this case there is no real conflict about legal principle. All the judges of the courts below have agreed as to the grounds of rateability.
The occupation to which it is attached must be an actual, an exclusive, and a profitable occupation. The only question is, whether the Messrs. Cory had such an occupation? I think they clearly had, and were therefore liable to be rated.
It is not necessary to consider the nature of the powers of the Conservators for the purpose of the argument; but if it were, I have no doubt that they acted within those powers in their dealings with the appellants. Under the 50th section of the statute they had vested in them all the interests of the Corporation of London and the Crown in "the bed and soil" of the River Thames, with authority to make jetties, piers, and landing places, and to permit the construction o such moorings as are the subject of our inquiry.
Exercising their statutable powers, they entered into a bargain that for certain considerations, the Messrs. Cory should have liberty t plant their moorings in the bed and soil of the river, with an understanding that if the Conservators should at any time find it inexpedient t permit those moorings to remain, they might cause their removal under the 91st section of the Thames Conservancy Act, by giving week's notice. The Messrs. Cory proceeded with their work, and completed a large and costly erection, digging down several feet in the be of the river filling the excavation with great stones, passing heavy chains through them, and piling on the whole some seventy tons of ballast. All this was done with their own money and under their own control, and the erection so completed was their own property. The Conservators did not spend a penny or do an act in the course of the construction, or meddle in any way with it when it was completed. It remained in the hands and under the full domination of those who had created it, subject to the right of removal of the Conservators, when they might find it desirable to fulfil the statutable conditions for that purpose.
In this state of undisputed facts, it appears to me that the Messrs. Cory had an occupation, an actual occupation, an occupation of a very real and substantial kind, and an occupation which was not merely actual but rightful, fairly purchased, and warranted by law. If the occupation was not in them, it was in nobody; and I cannot, in my view of the circumstances, concur with some of the learned judges in holding that the occupation, actual or constructive, remained in the Conservators. If, by their permission, a great stage had been put upon piles driven into the river's bed for twenty or thirty feet, to which the Messrs. Cory only could have access as they only had erected it, or if a great house had been built with the same license and in the same way, having its foundations in the river, the Conservators might as well have been called the occupants of both, though neither belonged to them, and upon neither could they have entered for a moment.
There was, therefore, in my judgement, an actual occupation in the Messrs. Cory, and if their occupation was actual, it was exclusive. The license or permission, call it what you will, under which the moorings were created, was not to be capriciously determined at any instant, or without the formal notice prescribed by the statute; and until that notice was given, the Conservators, if they had ventured to intrude upon them, would have acted illegally and been liable to answer in an action. For the time, and subject to the conditions, the Messrs. Cory were exclusive occupants as completely as if their occupation had been of their own fee simple estate,
Then, if the occupation was actual and exclusive, it was confessedly profitable, and so had all the qualities needful to render the occupants subject to the rate.
Mr. Thesiger ably urged the public importance of preserving to the Conservators the control of the river, and the inconvenience of the construction which would recognise the exclusive occupancy of the appellants; and he pressed your Lordships to regard the irregular form of the contract, spelt out from a resolution and a letter, as diminishing its force. But that contract, although so established, is clear and specific, and the effect of its express provisions cannot be destroyed because of any allegation of its interference with the interests of commerce. The Conservators had perfect legal right to do what they did; their bargain equally bound them and those with whom they dealt, and we must accept its terms and their consequences. Besides, I confess I fail to see the superior advantages in a social point of view of the view of the appellants, for unless the provision as to this statutable notice was a mere nullity and this has not been asserted it undoubtedly limited and suspended the control of the Conservators over the bed of the river, and that result, if an evil one, could not be avoided on either view of the case.
On the whole I am of opinion that the judgement of the court of Appeal ought to be sustained.
Lord BLACKBURN: My Lords, I am of the same opinion.
Neither the Court of Common Pleas in this case, nor the Court of Appeal, entertained any doubt that there was an occupation of land here, so that the parties might be liable to be rated. Upon that I will only make one remark, to show that the case of Messrs. Cory against the churchwardens of Greenwich, in which the Court of Common Pleas had, upon this very same rate and very same derrick, decided that it was not rateable, is really not, in point of law, in conflict with the decision of the present case, either as it was determined by the court below, or as it will now be affirmed by your Lordships. The manner in which the case was raised was different, and that made a difference in the result. In the former case, Cory v. Greenwich Churchwardens, the churchwardens went before the stipendiary police magistrate and asked him to enforce the rate. Upon hearing the case he thought that the Messrs. Cory were rateable, and he did enforce the rate. Then he was required to state a case for the Common Pleas, which case he stated, giving powers (I suppose by consent of the parties) to the Court of Common Pleas to draw all inferences of fact from the case so stated.
How they came to be so stated as they were I do not know; but, on the facts as appearing upon that case, the Court of Common Pleas, as then informed, drew the inference of fact that this derrick was no more occupying the land than any ship whose anchor has been dropped upon the ground, and which rides at anchor, can be said, in the legal sense of the term, to have an occupation of the ground. If that representation of fact was right, the conclusion of law would follow, that the Messrs. Cory did not occupy any land and could not be rated. That much was clear. Whether or not that conclusion was properly drawn from the evidence as stated by the magistrate is not a question now before your Lordships, and we need not form any opinion upon it. If the representation of fact was correctly made, the conclusion of law that the Messrs. Cory were not rateable would be perfectly irresistible.
But now, my Lords, that having taken place upon the very same rate, the parties raised the question in a different way, which also they had a right to do. The magistrate, after the decision of the Court of Common Pleas, of course refused to grant his warrant of distress; but the overseers had a right under the Act which is commonly called Jervis's Act to come and get a mandamus, or rather a rule in lieu of a mandamus, for the purpose of raising the question before a jury, and ultimately, as they have done here, before this the final Court of Appeal. That course having been taken, an action having been brought, the facts were more accurately determined; and what your Lordships have now to do is to see what is the effect of the facts as found and stated at the trial, not as found and stated by the magistrate previously. Taking the facts as they are found now, I apprehend that no one of your Lordships could for a moment doubt that here there was a complete occupation of the soil (whoever it was that occupied it), by the derrick occupying by means of. those moorings which were fixed in the soil, I think I may say quite as permanently as the foundations of an ordinary house would be fixed. No doubt they were capable of being removed and taken up, and so the foundations of a house would be, still it is clear that they were fixed and occupying the soil.
My Lords, the only other question was, who was the occupier? Were the plaintiffs merely persons having an easement without occupying, or were they the rightful occupiers? Upon that, my Lords, I do not think it necessary, nor would it be becoming in me as I was one of the judges in the court below, to say more than that I have not seen any reason to change the opinion which I then formed, as one of the judges of the Court of Appeal, namely, that the plaintiffs are the occupiers, and that as such occupiers they are properly rateable; and that I understand to be the opinion of all your Lordships.
References: [1985] 1 WLR 714; (1985) 129 SJ 348; [1985] 2 All ER 313; (1985) 83 LGR 534; [1985] RA 133, HL; affirming [1984] RA 41; 270 EG 1185, CA; affirming [1982] RA 239; (1982) EG 540
COURT OF APPEAL
FOX LJ:This is an appeal from a decision of the Lands Tribunal. The case is concerned with the rating of two adjacent pieces of land at Lockinge Farm, Wantage, Oxfordshire, which is a farm of some 2,300 ac. The northern piece of land is an arable field of about 13 ac. The perimeter of the field is laid out as a circuit for point to point races. Those races take place on one day a year, at Easter; that has been so since 1953. The circuit is about 12 furlongs in length and contains seven permanent steeplechase fences and two temporary fences. There are also some permanent rails on some parts of the circuit; they are on the inside of the track along its southern end and at the corners ? and there is a short length in the middle of the eastern section. Between meetings the circuit is used for the production of hay. The southern field consists of 52 ac. It is permanent pasture. It is not suitable for arable land because of a ditch, a right of way and the steep slope of the ground towards the southern end of the field. It is used in conjunction with the circuit for control purposes and for catering, betting and parking. In March 1978 the valuation officer made a proposal to bring the two pieces of land together into the valuation list under the description "race course" with a rateable value of £850. That proposal was objected to and, on the hearing of that objection, the local valuation court held that the two pieces of land were exempt from rating on the ground that they were agricultural land within the provisions of s 26 (3) of the General Rate Act 1967, the use as a race course being in the opinion of the valuation court de minimis. Section 26 (1) of the General Rate Act 1967 is as follows:
"No agricultural land or agricultural buildings shall be liable to be rated or be included in any valuation list or in any rate."
Section 26 (3) of the Act is as follows:
"In this section the expression `agricultural land' ? (a) means any land used as arable meadow or pasture ground only, land used for a plantation or a wood or for the growth of saleable underwood, land exceeding one quarter of an acre used for the purpose of poultry farming, cottage gardens exceeding one quarter of an acre, market gardens, nursery grounds, orchards or allotments, including allotment gardens within the meaning of the Allotments Act 1922, but does not include land occupied together with a house as a park, gardens (other than as aforesaid), pleasure grounds, or land kept or preserved mainly or exclusively for purposes of sport or recreation, or land used as a race course; and for the purposes of this paragraph the expression `cottage garden' means a garden attached to a house occupied as a dwelling by a person of the labouring classes; and (b) includes land occupied with, and used solely in connection with the use of, such a building as is mentioned in subs (4)(b) of this section . . . ."
From the decision of the valuation court the valuation officer appealed to the Lands Tribunal. That appeal was heard by Mr v. G Wellings who allowed it. He held that the user of the land as a race course was not trifling and accordingly that the maxim de minimis non curat lex did not apply. Mr Loyd, the occupier of Lockinge Farm, now appeals from that decision. The following facts, inter alia, were found by the Lands Tribunal in addition to those which I have already set forth:
(i) The race meetings are conducted by the Old Berkshire Hunt and are subject to the regulations for point to point steeple chases of the Jockey Club.
(ii) The race meetings take place on Easter Monday in each .year. There are five or six races each meeting. Each race is over three miles and lasts for five or six minutes. Accordingly the racing lasts about 30 minutes in each year. Each meeting lasts about 2'/z hours.
(iii) The "areas of control" required by the Jockey Club regulations for the conduct of point to point meetings are all situated on the southern field in the 6 ac of it nearest to the circuit. These areas of control comprise a parade ring formed by temporary chestnut fencing, an unsaddling enclosure, weighing and changing tents, secretaries' tent and other stand wagons, enclosures or tents used by the officials of the meeting. In addition, within that 6 ac area, at each meeting, tents are provided for caterers, a bar selling alcoholic refreshment, and for the tote. An area is set aside for the use of bookmakers. Horse boxes for horses competing in the races are parked within that 6 ac area.
(iv) The meeting is, says the tribunal, a great attraction for persons living in the locality and, indeed, further afield and as many as 10,000 spectators, some on foot but many in cars, attend the meetings. Entry is free but charges are made for car parking. All cars are parked on the southern field to the south of the 6 ac area.
(v.) The Jockey Club's inspector makes an inspection of the course about six weeks before the meeting when the clerk of the course must produce two or more fences.
(vi) The chestnut fencing for the paddock is erected about two weekends immediately before the meeting. The tents are erected on the Thursday before the meeting. And on the Sunday before Easter the car parking areas are marked out by tapes and cords.
(vii) By the Wednesday or Thursday immediately after Easter everything is cleared away apart from the permanent features.
(viii) The use of the land for racing does not affect the value of Lockinge Farm.
(ix) Except for a few days before and after meetings, the southern field is indistinguishable from the rest of the farm fields. It suffers no damage from its use at the race meetings.
(x) If there were no race meetings, the agricultural use of the southern field would not differ.
(xi) The bulk of the revenue from the race meetings is from car parking. In 1978 the total profit after all expenditure was £5,733, and in 1979 it was £9,601. Most of the profit went to the Old Berkshire Hunt. Mr Loyd, the present appellant, receives no financial benefit from the race meetings. We should add that there is no dispute in this case as to the existence of hereditaments which are capable of being separately rated. It is also common ground, that the island of land bounded by the circuit is not within any relevant hereditament.
We come to the interpretation of the statute. The structure of s 26 of the 1967 Act, so far as material, is this. By subs (1) it is provided that no agricultural land shall be liable to be rated. The definition of "agricultural land" is contained in subs (3). It means (inter alia) "land used as arable meadow or pasture ground only". The subsection however is so drawn as to exclude from the statutory meaning "land used as a race course". There was some debate before us as to the ambit of the words "arable meadow or pasture ground only". If, however, land is "used as a race course", within the meaning of the subsection, the precise ambit of the earlier words is not material. If land is so used, it cannot be entitled to the exemption since the statute expressly provides that agricultural land does not include land used as a racecourse. In the expression "land used as a race course", the crucial word, for the purposes of the present case, is "used". Subsection (3) does not qualify the word by reference to extent at all. In that respect there is a striking difference in language between the reference to race courses and the immediately preceding reference to "land kept or preserved mainly or exclusively for purposes of sport or recreation". Thus the statute does not require that land be used "mainly or exclusively" as a race course but only that it is "used" for that purpose. If it is "used" as a race course within the meaning of the statute, the fact that it is also used for other purposes is not material. We say "within the meaning of the statute" because the user must be of such extent that the law will take account of it. If it is so slight that the maxim de minimis non curat lex applies to it, then the user will not be a sufficient user for the purposes of the statute. But unless the user can be said to be de minimis it will satisfy the statute. Thus in Wimborne and Cranborne Rural District Council v. East Dorset Assessment Committee farm land had been used for motor cycle races on two afternoons in 1937 and four afternoons in 1939. The attendance was about 2,000 persons on each occasion in 1938. Quarter Sessions decided the land was used as a race course for the purposes of the then current rating statute the provisions of which were not materially different for present purposes to those of the 1967 Act. Lord Justice MacKinnon, with whom the other members of the court concurred, said [1940] 2 KB 420, 428:
"But if the user is sufficiently substantial that the maxim de minimis cannot apply, I do not see how this Court can hold that there was no evidence on which quarter sessions could come to the conclusion they did come to."
Counsel for the appellant, referred us to three other cases (which were decisions of the Lands Tribunal), but I do not think they take the matter any further. They were Honiton and District Agricultural Association v. Wonnacott, United Counties Agricultural Society v. Knight; and Young v. West Dorset District Council. They are simply decisions, on their own facts, as to whether land was used as arable meadow or pasture ground only. In the present case there were, in our opinion, ample grounds upon which the Lands Tribunal could conclude that the two fields were "used as a race course" within the meaning of the statute. They plainly were "used" as a race course. The actual racing only took place on the circuit, but the southern field must nevertheless be regarded as part of the race course. In the ordinary use of English the expression "race course" is not limited to the race track; it includes the whole complex of the race track and the areas used for control, catering, betting, parking, the viewing of races and the convenience of spectators generally. The question then is whether the use of the two fields as a race course was de minimis. In that connection it is the use of the land itself lie the two fields) with which one is concerned. The fact that the land is part of a larger unit lie Lockinge Farm) is not, we think, material. One measures the extent of the user by reference to the land which is used and not by reference to Lockinge Farm as a whole. It is not being sought to rate Lockinge Farm but only the two fields. Nor do we think it is of consequence that the appellant himself receives no part of the benefit from the user as a race course. The test is user and not whether the occupier receives the financial benefit of the user. Now while it is true that the race meeting only takes place on one day a year and does not interfere with the profitability of the farm, we think that the following circumstances without more would justify the Lands Tribunal in concluding that the user could not be dismissed as de minimis. (i) that some 10,000 people, many with cars, go upon the land to attend the race meeting; tents have to be erected for catering, a bar, the tote and other purposes; (ii) that there are installed upon the land some permanent fences and rails for the racing, and (iii) that work has to be done on the fields some days before the meeting to prepare them for the meeting. The jurisdiction of this court on the present appeal to interfere with the decision below is, it is accepted, a limited one. The appellant must establish that the decision of the Lands Tribunal was erroneous in point of law. The question whether land is used as a race course is one of fact and degree. Unless, therefore, it can be shown that the tribunal misdirected itself or that its decision is plainly wrong, this court cannot IS interfere (Edwards v. Bairstow). Since, for the reasons which we have indicated, there seems us to be evidence which justifies the tribunal's decision, it cannot be said that the decision is plainly wrong. It is said, however, that the tribunal misdirected itself. We do not accept that. The matters complained of are these: (i) The tribunal referred to the importance locally of the event. We are not satisfied that the tribunal
there was doing anything more than emphasise that the meeting was a substantial race meeting ? and that is, we think, material to the question of the extent of the user. We note that the finding of fact was that "the race meeting is a great attraction for persons living in the locality and indeed further afield and as many as 10,000 spectators, some on foot but many in cars, attend the meetings". (ii) The tribunal referred to the large numbers of persons who attend the meeting. That is, in our view, a material consideration going to the extent of user. (iii) The tribunal referred to the organisation and preparation for the event. We cam see that there could be much organisation and preparation but very little user. But in the present case the organisation and preparation involved work on the land to enable it to be used as a race course and the tribunal was entitled to consider those matters in forming a general view as to user. (iv) The tribunal referred to the financial return. We quite follow that there could be a very substantial user of land with no financial return. And we suppose that there could be a quite trivial user which produced a large financial return. But the Court of Appeal in the Wimborne case, at [1940] 2 KB 420, 428, evidently thought that the size of the receipts was material. And it seems to us that, in the present case, while the size of the profit probably does not tell one a great deal more than one learns from the number of spectators, when one is asking whether this user is de minimis, the combination of the facts that there were 10,000 spectators and a profit of £9,000 are indicative of the extent of the user and go to the question whether, for the purposes of this statute, that user can be said to be so trifling that the law should disregard it. If we are wrong about that, we do not think it makes any difference. Counsel for the appellant accepts that, if there was a misdirection, this court should determine the matter since all the facts are known. And for the reasons which we have given when expressing the view that there were ample grounds upon which the tribunal could reach the decision which it did, we conclude that this land is used as a race course and that the user is not within the maxim de minimis non curat lex. We should add that, in the context of a rating statute, the result is not very surprising. Agricultural land is exempted. But if farm land is used for a non agricultural purpose which produces a substantial annual profit, there is no reason why, as a matter of policy, that should not be reflected in rateability.
We dismiss the appeal.
HAYES (VO) V. LOYD (HL)
Refeerences: [1985] 1 WLR 714; (1985) 129 SJ 348; [1985] 2 All ER 313; (1985) 83 LGR 534; [1985] RA 133, HL; affirming [1984] RA 41; 270 EG 1185, CA; affirming [1982] RA 239; (1982) EG 540
HOUSE OF LORDS
Lord Fraser OF TULLYBELTON:My lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Bridge of Harwich. I agree with it and for the reasons given by him I would dismiss this appeal.
Lord ELWYN-JONES:My lords, for the reasons given in the speech of my noble and learned friend, Lord Bridge of Harwich, I would dismiss this appeal with costs.
Lord Wilberforce:My lords, I have had the benefit of reading in advance the speech to be delivered by my noble and learned friend, Lord Bridge of Harwich. I agree with his reasons and conclusions. I venture to add a brief footnote. The statutory words now in question are "land used as a racecourse" (General Rate Act 1967, s 26 (3)). In order for a parcel of land to become rateable under these words, it is necessary to establish: (i) that the land is used; (ii) that the user is not de minimis; (iii) that the user is as a racecourse. It is for the Lands Tribunal to find, as facts, whether these requirements are met in the individual case before it. They did so find in the present case, there was evidence on which they could so find; there is no point of law on which their decision can be challenged. The facts were, in the case of the land at Lockinge, very clear ? a laid out circuit with some permanent fences and rails ? an undoubted user, which could not possibly be described as de minimis. It does not follow, and this is the only point I desire to make, that every one of the 200 or so events of a similar character which take place each year in different parts of England would be found to exhibit the same characteristics: indeed, it is unlikely that they would do so. There is a broad spectrum from quite informal occasions to a fully organised racecourse event: it is for the rating authority and ultimately for the Lands Tribunal to place each case, individually considered, on one or other side of the critical line. A decision on one set of facts is never binding on another, though of course it is capable of providing guidance. I would dismiss the appeal.
Lord Keith of Kinkel: My lords, For the reasons given in the speech of my noble and learned friend, Lord Bridge of Harwich, with which I agree, I too would dismiss the appeal.
Lord BRIDGE OF HARWICH: My lords, the Old Berkshire Hunt has held its annual point to point race meeting ever since 1953 on Easter Monday on two fields forming part of Lockinge Farm, near Wantage. The five or six races of the event are run over a circuit which forms the perimeter of the northern and larger of the two fields. The circuit is about a mile and a half in length and covers 13 ac of ground. It is bounded on the outside by the field boundary and for parts of its length on the inside, by permanent rails. There are seven permanent steeplechase fences on the circuit; two additional temporary fences are erected each year for the meeting. The island site enclosed by the circuit has an area of 68 ac and is used as arable. The southern field has an area of 52 ac. On race day that part of the southern field nearest to the circuit is used to provide the facilities required by Jockey Club Regulations for the conduct of point to point meetings. These comprise a parade ring formed by temporary chestnut fencing, an unsaddling enclosure, weighing and changing tents, a secretary's tent, and other tents, enclosures, and stand wagons used by the officials of the meeting. In addition, there are tents where catering and bar facilities are provided for the public; there is a totalizator tent; and there are special areas set aside for bookmakers to set up their stands, and for competitors to park their horse boxes. The area occupied by these temporary structures and activities specifically related to the racing is some 6 ac. The balance of the southern field is used to provide a car park for visiting spectators.
Preparation of the southern field begins some two weeks before Easter by the erection of the chestnut fencing for the parade ring. Car parking areas are marked out with tapes and cords on Palm Sunday and tents are erected on Maundy Thursday. After the meeting clearance of the site of all except the permanent fences and railings on the circuit is completed by the Wednesday or Thursday in Easter week. The use of the circuit and the southern field for the race meeting does not impair their agricultural value as meadow or pasture land. The meeting is a popular event which attracts as many as 10,000 visitors, most of whom no doubt come by car. The only charges made to spectators by the hunt are for car parking and purchase of race cards. The profits realised in 1978 and 1979 were £5,733.28 and £9,601.57 respectively. On the 21st March 1978 the valuation officer made a proposal to enter the circuit and the southern field in the rating and valuation list as a hereditament under the description "Racecourse" with a rateable value of £850. The appellant, who is joint tenant with his partners of Lockinge Farm and also, coincidentally, Chairman of the Old Berkshire Hunt, objected to the proposal. On the 15th December 1980 the Oxfordshire local valuation court upheld his objection on the ground that the land in question was exempt from rating, being agricultural land as defined by s 26 (3) of the General Rate Act 1967, and that the racecourse use was de minimis. The valuation officer's appeal to the Lands Tribunal was heard by Mr Victor Wellings QC who, on the 24th June 1982, [1982] RA 239, reversed the decision of the local valuation court. An appeal by case stated was dismissed by the Court of Appeal (Sir John Donaldson, MR,
Fox and Stephen Brown LJJ) on the 22nd March 1984, [1984] RA 41. The appellant now appeals to your lordships by leave of the House. Agricultural land is exempted from rating by s 26 (1) of the General Rate Act 1967. The relevant language of the definition given by s 26.(3) provides: "In this section the expression `agricultural land' ? (a) means any land used as arable meadow or pasture ground only . . . but does not include . . . land kept or preserved mainly or exclusively for purposes of sport or recreation, or land used as a racecourse; . . ." This language first appeared in s 9 of the Agricultural Rates Act 1896 and has since been repeated in successive statutes culminating in its present inclusion in the 1967 Act. The language, then embodied in s.2(2) of the Rating and Valuation (Apportionment) Act 1928, was first construed judicially in 1940. A farmer allowed a 17 ac field to be used by a motorcycle club for organised motorcycle grass track race meetings on two afternoons in 1937 and four afternoons in 1938. A charge of one shilling was made for admission and attendances were around 2,000 on each occasion. The rating authority proposed to rate the field. The assessment committee rejected the proposal. Quarter Sessions allowed an appeal by the rating authority. The assessment committee appealed successfully to the Divisional Court. The decision of the court (Lord Hewart CJ, Hilbery and Hallett JJ) is reported as Wimborne and Cranborne Rural District Council v. East Dorset Assessment Committee. It is unnecessary to consider the reasoning in the judgment of Lord Hewart CJ, since the decision of the Divisional Court was in its turn reversed by the Court of Appeal (MacKinnon, Clauson and Luxmoore LJJ). The crucial paragraph in the judgment of MacKinnon LJ, with which both other learned Lords Justices agreed, reads as follows, at [1940] 2 KB 420, 428: "I repeat that the question propounded in the case is: `Whether on the facts found the decision that this was land used as a racecourse was correct in law'. Put otherwise, that question must be whether the facts found afforded evidence on which the tribunal could properly find as a fact that this field was used as a racecourse within the meaning of the section. If the facts found showed only such casual and unimportant user, that the legal maxim de minimis non curat lex applied, no doubt the court ought to hold that there was no evidence on which the Quarter Sessions could so find. But if the user is sufficiently substantial that the maxim de minimis cannot apply, I do not see how this court can hold that there was no evidence on which Quarter Sessions could come to the conclusion they did come to." The ratio decidendi of the Court of Appeal in the Wimborne being binding on all courts below this House, the only argument open to the present appellant up to the Court of Appeal has been that the use of the land presently in question as a racecourse by the Old Berkshire Hunt was de minimis. That is a question of fact, and, as in the Wimborne case, the only basis on which the Court of Appeal could have reversed the decision of the Lands Tribunal would have been that there was no evidence on which Mr Wellings could find that the racecourse use here was more than de minimis. To persuade the Court of Appeal to that conclusion was always a hopeless task for the appellant. Having found, in a case stated, if I may say so, with admirable clarity, the facts which I have summarised in the opening paragraphs of this opinion, Mr Wellings stated his conclusions as follows, [1982] RA 239, 244
"The features of this case which suggest that the maxim de minimis non curat lex ought to be applied are the facts that racing takes place on one day in the year only, that the owners and occupiers of the land derive no financial benefit from the racing and that the racing does not interfere with the normal agricultural operations which take place upon the land. In my opinion, factors which suggest the contrary proposition are the importance locally of the event, the large numbers of spectators who attend, the organisation and preparation for the event, the permanence of fences and rails and the financial return enjoyed by the organisers. In my judgment the latter group of factors prevails and for this reason the use of the circuit as a racecourse cannot be said to be trifling."
Save to say that, if, which I doubt, Mr Wellings intended to treat the fact that the tenants of Lockinge Farm did not charge the hunt for the use of the fields as a relevant factor in the appellant's favour, he would have erred, I cannot fault his reasoning in any way. There was abundant evidence that the racecourse use was more than de minimis. I am strongly inclined to the view, though it is unnecessary so to decide, that a conclusion to the contrary effect would itself have been open to challenge in law as perverse. In your Lordships' House two arguments have been advanced for the appellant which were not open to him below. The first was based on one of the four ingredients of rateable occupation originally enunciated by counsel for the rating authorities in argument in the Court of Appeal in Laing (John) & Son Ltd. v. Kingswood Area Assessment Committee and since recognised by your Lordships' House in London County Council v. Wilkins VO. The fourth of those ingredients is that the occupation or possession of the land must not be for too transient a period. This seems to me to be wholly irrelevant to the construction of the words "land used as a racecourse" in the statutory definition of "agricultural land". The definition is concerned with the liability of the land to be rated, not with the question who, if it is so liable, is the rateable occupier. Nobody could suggest for a moment that the Old Berkshire Hunt are rateable occupiers of the land presently in question; but this does not help the appellant, who is. The second argument is that the extent to which land must be used as a racecourse, if that use is to take it out of the definition of agricultural land, must be "substantial" and that this test requires use to a significantly greater extent than would suffice to satisfy the test of being more than de minimis. I unhesitatingly reject this argument, not least because of the virtual impossibility, in this context, of laying down any sensible, practical test of what would amount to substantial user. But two still more compelling refutations of the argument I take from the language, on which I could not hope to improve, of Fox LJ and MacKinnon LJ giving judgment in the Court of Appeal in this case and in the Wimborne case respectively. Fox LJ said [1984] RA 41, 45: "In the expression `land used as a racecourse,' the crucial word, for the purposes of the present case, is `used.' Subsection (3) does not qualify the word by reference to extent at all. In that respect there is a striking difference in language between the reference to racecourses and the immediately preceding reference to `land kept or preserved' mainly or exclusively for purposes of sport or recreation.' Thus the statute does not require that land be used `mainly or exclusively' as a racecourse but only that it is `used' for that purpose. If it is `used' as a racecourse within the meaning of the statute, the fact that it is also used for other purposes is not material. We say `within the meaning of the statute' because the user must be of such extent that the law will take account of it. If it is so slight that the maxim de minimis non curat lex applies to it, then the user will not be a sufficient user for the purposes of the statute. But unless the user can be said to be de minimis it will satisfy the statute." MacKinnon LJ said [1940] 2 KB 420, 428:
"I conceive that the policy of the legislature is that if the farmer uses his land for commercial profit from other than agricultural operations, it is right that he should, in respect of that user and that profit, be subject to the burden of rates."
The use as a racecourse of land which would otherwise qualify for agricultural exemption from rating is bound, in the very nature of the case, to be occasional. We are not here concerned with the kind of old fashioned cross country horse race to the village church as the winning post which no doubt originally gave rise to the use of the expressions "point to point" and "steeplechase". What we are concerned with in this case, although it is only used once a year, is a modern, well and sophisticated point to point racecourse. If this is not the kind of racecourse use that the legislature had in mind as excluding the farmer's exemption from rating, I find it difficult to imagine any that would be. Accordingly, I would dismiss the appeal with costs.
HAYES (VO) V. LOYD (LT)
References: [1985] 1 WLR 714; (1985) 129 SJ 348; [1985] 2 All ER 313; (1985) 83 LGR 534; [1985] RA 133, HL; affirming [1984] RA 41; 270 EG 1185, CA; affirming [1982] RA 239; (1982) EG 540
Lands Tribunal
This is an appeal from a decision of the Oxfordshire Local Valuation Court. The appeal land consists of two adjacent pieces of land, part of Lockinge Farm, Lockinge, Wantage, Oxfordshire. The northernmost piece of land is an arable field of about 13 ac. The perimeter of that field is laid out as a circuit for use on one day in the year, at Easter, for point to point races. The circuit is 11.92 furlongs in length and contains a number of permanent steeplechase fences and other features which I shall mention. The field to the south consists of 52 ac and is used in conjunction with the circuit at the annual race meeting, both for control purposes and for catering, betting and parking of cars.
On the 21st March 1978 the valuation officer made a proposal to bring the two pieces of land together into the valuation list under the description "Race Course" with rateable value £8,50. An objection was duly made to the proposal. When the matter came before the local valuation court, it held that the proposed hereditament consisting of the two pieces of land was exempt from rating. The reasons given by the court for that decision were:
"On the evidence we have heard we hold that all the land in question is exempt from rating as agricultural land within the meaning of s 26 (3) of the General Rate Act 1967, since its use as a racecourse is within the principle of de minimis non curat lex and as such should be disregarded".
Section 26 (1) of the Act of 1967 provides that no agricultural land or agricultural buildings shall be liable to be rated or be included in any valuation list or in any rate'. The relevant part of the definition of the expression "agricultural land" contained in subs (3) of that section says that that expression ...means any land used as arable, meadow or pasture ground only ... but does not include . . . pleasure grounds, or land kept or preserved mainly or exclusively for purposes of sport or recreation, or land used as a racecourse. . . ."
At the hearing evidence was given by Mr John McCormick Hayes ARICS, the valuation officer, and by the respondent, Mr Christopher Lewis Loyd FRICS, occupier and manager of the farm. Valuations are agreed in the event that the circuit should be held to be rateable. In that event, and on the assumption that the hereditament consists of the circuit and southern field together, as the valuation officer contends, the rateable value is agreed at £850. On the assumption that the hereditament is confined to the circuit, as the respondent contends, the rateable value is agreed at £300. It also agreed that the hereditament does not comprise the island of land bounded by the circuit. In addition to facts which I have already mentioned, I find the following facts:
(1) Lockinge Farm consists of 2,300 ac. It is farmed by the respondent on behalf of a partnership of which he is a member and which holds the land under a tenancy from a trust of which he is also a member. The land is mostly arable but there are 480 head of cows in milk also.
(2) Point to point races take place on one day in the year at Easter and have taken place annually at that time since 1953.
(3) The race meetings are conducted by the Old Berkshire Hunt and are subject to the Regulations for Point to Point Steeple Chases of the Jockey Club.
(4) The respondent is Chairman of the Old Berkshire Hunt and is also a member of its committee which organises the racing on the circuit, but he confines his personal attention to control of the book-makers who operate at the, meetings.
(5) There are seven permanent steeple chase fences on the circuit and two temporary fences (no more than two temporary fences being permitted under the Jockey Club Regulations), Between race meetings the permanent fences are kept covered with polythene.
(6) There are permanent rails on parts of the circuit. In each case they are on the inside of the track: along its southern end and in the corners; and there is a short length of rail in the middle of the eastern section of the circuit.
(7) Race meetings take place on Easter Monday in each year. The number of races is 5 or 6 and each race is over three miles. Each race lasts for about 6 minutes and accordingly the racing lasts for about 30 minutes in each year. Each meeting lasts about 7 hours, at all events, so far as the circuit is concerned.
(8) The "areas of control" required by the Jockey Club Regulations for the conduct of the point to point meetings are all situated on the southern field in the six acres of it nearest to the circuit. These areas of control comprise a parade ring formed by temporary chestnut fencing, an unsaddling enclosure, weighing and changing tents, secretaries' tent and other stand wagons, enclosures or tents used by the officials of the meeting. In addition, within that six-acre area, at each meeting, tents are provided for caterers, a bar selling alcoholic refreshment, and for the Tote. An area is set aside for the use of bookmakers. Horse boxes for horses competing in the races are parked within that six acre area.
(9) The race meeting is a great attraction for persons living in the locality and indeed further afield and as many as 10,000 spectators, some on foot but many in cars, attend the meetings. No charge is made for admission to the meetings but charges are made for the parking of cars, all of which are parked on the southern field south of the six acre area.
(10) Under the Jockey Club Regulations the Clerk of the Course of the point to point meeting must produce one or more fences at least six weeks before the date of the meeting, at which time the Jockey Club's Inspector will make a preliminary inspection of the course.
(11) The chestnut fencing for the paddock or parade ring is erected, by volunteers, in the two weekends immediately before the race meeting; the tents are erected on the Thursday immediately before the meeting.
(12) On the Sunday before Easter the car parking areas are marked by the erection of tapes and cords.
(13) By the Thursday, and frequently by the Wednesday, immediately after Easter, everything is cleared away, apart from the permanent features of the circuit.
(14) The land of the circuit suffers no damage by reason of the races. The growth of grass is affected thereby but when the land is required for earlier grazing fertiliser is applied thereto.
(15) The use of the land for racing does not affect the value of the farm in any way.
(16) The respondent, his partners and the trustees :gain no financial benefit from the race meetings.
(17) Except for a few days both before and after race meetings, the southern field is indistinguishable from other fields of the farm.
(18) Between meetings the circuit is used for the production of hay. In 1980 69 units of phosphate, 60 units of potash and 130 units of nitrogen were applied to the circuit at a cost of £400 and 36 tons of hay (a good crop for 13 ac), valued at £2,160, were made. In 1981 3 cwts per acre of Nitram, at a cost of £96.50 per ton, were applied to the circuit and 35 cwts per acre a good yield, were achieved.
(19) The southern field is permanent pasture. It is not suitable for use as arable land because of a ditch, a Tight of way and the steep slope of the ground towards the southern end of the field. It is normally used for intensive grazing of cattle from the end of April to mid October in each year.
(20) If there were no race meetings the agricultural use of the southern land would not differ and the grazing season would be extended; there are other areas (two in number) of permanent grass on the farm provided in order to conserve bird life and flora.
(21) The island field which is bounded by the circuit and which has an area of 68 ac is arable. If there were no race meetings, the circuit, if it did not continue to be used for the production of hay, would become arable also.
(22) At the race meeting in 1978 the revenue from car parking was £5,432.75, from race cards £1,088.18 and the total income (including balance in hand from previous year of £926.36) was £9,472.88. The profit after all expenditure was £5,733.28, of which £4,000 went to the Old Berkshire Hunt.
(23) In 1979 the revenue from car parking was £9,254.78. Other figures, compared with the previous year, were also increased. The total profit was £9,601.57, of which £5,500 went to the Old Berkshire Hunt.
Counsel for the valuation officer submitted that the circuit and the southern field did not serve a mere agricultural purpose. Although the race meeting took place on only one day in the year, it was a large and elaborate and well organised event and could not be disregarded as de minimis. He relied on the decision of the Court of Appeal in Wimborne and Cranborne Rural District Council v. East Dorset Assessment Committee (part of a farm used on two afternoons in 1937 and four afternoons in 1938 for motorcycle racing held to be land used as a race course). He particularly relied on the words of MacKinnon LJ, at [1940] 2 KB 420, 428.
"But if the user is sufficiently substantial that the maxim de minimis cannot apply, I do not see how this Court can hold that there was no evidence on which quarter sessions could come to the conclusion they did come to".
I was also referred to two decisions of the Lands Tribunal (one by Erskine Simes Esq., QC, and the other by J S Stuart Daniel Esq., QC) as follows: Honiton & District Agricultural Association v. Wonnacott (Valuation Officer) (land held to be agricultural land notwithstanding use on one day per year for an agricultural show, which use was de minimis); United Counties Agricultural Society v. Knight (Valuation Officer) (land otherwise agricultural used on two successive days in the year for an agricultural show held to be rateable).
Counsel for the respondent submitted that, from whichever point of view the matter were regarded, the use of the land as a race course was minimal:
(1) From the point of view of the effect on the farm:
(a) the land in question was a small part of the farm at the extremity of what was a large enterprise;
(b) the meeting took place on one occasion in the year;
(c) it did not interfere with farming operations or the profit-ability of the farm;
(d) the owners and occupiers of the farm obtained no financial benefit from the meetings, which factor distinguished other decisions;
(2) the circuit and the field were affected by the race meetings in different ways and they had different characteristics. The features of this case which suggest that the maxim de minimis non curat lex ought to be applied are the facts that racing takes place on one day in the year only, that the owners and occupiers of the land derive no financial benefit from the racing and that the racing does not interfere with the normal agricultural operations which take place upon the land.
In my opinion, factors which suggest the contrary proposition are the importance locally of the event, the large numbers of spectators who attend, the organisation and preparation for the event, the permanence of fences and rails and the financial return enjoyed by the organisers.
In my judgement the latter group of factors prevails and for this reason the use of the circuit as a racecourse cannot be said to be trifling. The maxim therefore does not apply and the circuit is to he regarded as land used as a racecourse with the consequence that it is not exempt from rating. Further, in my opinion, the southern field plays a vital part in the conduct of the race meetings and I agree with the valuation officer that the rateable hereditament consists of the circuit and the southern field together. The appeal is allowed accor-dingly and the rateable value of the appeal hereditament (the circuit and the field together) is determined in the agreed amount of £850.
The respondent shall pay the appellant valuation officer his costs of this appeal, excluding expert witness fees, such costs if not agreed to be taxed by the registrar of the Lands Tribunal on county court scale 2.
MONKCOM V.ADAMS VO
On the 13th February 1987 the occupier, Mrs I J Monkcom, made a proposal seeking a nil assessment. The valuation officer objected and when the matter came to appeal the local valuation court concluded that the site was rateable but reduced the assessment from £175 rateable value to £150 rateable value.
The ratepayer appeals to this tribunal seeking a nil assessment or in the alternative a substantial reduction in assessment. The valuation officer seeks to maintain the assessment decided by the local valuation court.
Mr T G Sharman by leave of the tribunal appeared for the ratepayer and called her to give evidence. The valuation officer Mr J Adams ARICS appeared in person and gave evidence.
From the evidence and an agreed statement of facts I find the following:
The trampoline site is an area of land approximately 222 sq.yd. (185.6 sm) within the public Greensward, Marine Parade West, Clacton on Sea in Essex. The area of the site is defined and separated from the Greensward by a timber fence. It is adjacent to a donkey enclosure and a crazy golf course.
The site is grassed and accommodates six children's trampolines. The metal frames are recessed into shallow trenches each 80 ft square with timber frames. The skin or canvass of a trampoline when fitted is thereby at ground level. This arrangement is for the safety of children using the trampolines.
There is a hut constructed of wood with a felt roof of 33.3 sf (3.1sm) and used for storage.
On the 2nd June 1986 the Tendering Council granted a licence to the ratepayer to use the site solely as a trampoline pitch between the hours of 8 am and 10 pm from the 1st of April or Good Friday, whichever the sooner, to the 31st October in each year 1986 to 1990 inclusive. The licensee may at her own expense provide, erect and maintain a hut and trampoline pitch and suitable fencing.
The ratepayer uses the premises only during school holidays and fine days. Children are allowed to use the trampolines for five minutes on a payment of 30 pence. Parents are allowed into the enclosure free of charge.
The business is run by the ratepayer's husband and two small daughters and the girls received a nominal payment for their services. The gross receipts in 1986 amounted to £2,193.72 and in 1987 £2,238.05. The ratepayer calculates that the business made a loss in 1986 of £163.19 but this was after making capital payments for the purchase of the hut, fence, trampolines and other equipment amounting to £805 but before making any deductions for the costs of management. Likewise in 1987 the profit is calculated to be £246.38 after capital payments of £235 in respect of trampolines but again before any deduction of management costs.
The issues
The issues may be briefly stated in the form of three questions:
1 . Is there exclusive occupation of the trampoline site by the ratepayer?
2. Is there beneficial occupation of the trampoline site by the ratepayer?
3. Is the trampoline site ancillary to a public park within the meaning of s 44 of the General Rate Act 1967 and therefore exempt from rating?
If in fact the trampoline site should be assessed then there is a dispute as to the correct assessment.
I was referred to the following authorities and decisions of the Lands Tribunal: Gage v. Wren; Lambeth Overseers v. London County Council; Kingston upon Hull Corporation v. Clayton VO,Burrell VO v. Downham Market UDC, Blake VO v. Hendon Corporation; Sheffield Corporation v. Tranter; Southern Miniature Railway v. Hake; London County Council v. Robinson and Lambeth MBC, Redbridge London Borough Council v. Wand; North Riding of Yorkshire County Valuation Committee v. Redcar Corporation; Smith v. St Albans City and District Council; and Halsbury's Laws of England (4th edn), Vol 39, para 25.
The first issue concerns exclusive occupation. I have no doubt that during those periods when the appeal site is in use for children's trampolining they are in the occupation of the ratepayer and all other uses are excluded. There is no evidence to show that at other times, either within or without the limits of the license, the site is used to any significant degree for any other purpose and no doubt the unique physical characteristics of the site are not conducive to a different use.
I do not think that the occupation can be disregarded on the grounds of transience. In fact the premises are in use as a trampoline site for comparatively few days in the year but they have been especially adapted for that use and are available for that use at any time during the license period over a number of years. The metal trampoline frames remain in the shallow trenches throughout the year.
The next question concerns beneficial occupation. As I understand it from numerous authorities starting with the House of Lords decision in Jones v. Mersey Docks (to which I was not referred) beneficial occupation is not limited to pecuniary profits but means an occupation which is of value to the occupier and for which he would be prepared to pay a rent. In the present case the ratepayer makes a payment for her license to trade. It can be demonstrated that after paying the "rent", rates, repairs, insurance and other overheads including an annual allowance for her capital expenditure there still remains a profit. Whether that profit is sufficient to induce the tenant to continue to occupy the premises is a question of fact but the only evidence before me is that the ratepayer has been trading at the premises since 1986 and there is no suggestion that she does not wish to continue trading.
I conclude therefore that there is in fact a beneficial occupation.
On this last question I refer to s 44 of the General Rate Act 1967 as amended by the Local Government Act 1972, s 271 and sch 30, which reads as follows:
"44 (1) A park which has been provided by, or is under the management of, a local authority and is for the time being available for free and unrestricted use by members of the public shall, while so available, be treated for rating purposes as if it has been dedicated in perpetuity for such use.
(11) In this section (a) References to a park include reference to a recreation or pleasure ground, a public walk, an open space within the meaning of the Open Spaces Act 1906, and a playing field provided under the Physical Training and Recreation Act 1937; (b) The expression 'Local Authority' means council of a county ... London Borough, county district or borough included in a rural district, a parish council or parish meeting, the Greater London Council, the Common County of the City of London or the Council of the Isles of Scilly, or any two or more of them acting in combination."
I have been referred to a large number of cases but I have not had the benefit of any legal arguments in the light of those authorities. In each case, whether or not a swimming pool, bowling green, refreshment pavilion, roundabouts, swings, kiosks, stalls, donkey rides and putting courses were part of the park was a question of fact and degree. However, it is also necessary to try and understand the principles underlying the consideration of the facts.
In the Court of Appeal decision in Blake VO v. Hendon Corporation Devlin LJ said (1961) 32 DRA 486, 496:
"The public is not a legal entity and cannot be vested with the legal ownership of the walks and pleasure grounds which it is to enjoy. But if it could be given the beneficial ownership, that is what it should have. In the case of buildings, such as libraries and art galleries, the needs of management may be deemed to require the local authority to retain the right of occupation. But the local authority have no right to retain out of lands intended for the enjoyment of the public the right of occupation that is not necessary for their management."
Later at p 497 he said:
"Of course, if the exclusion of the public for free use goes beyond what is justifiable as ancillary, the land, or the parts of it subject to the exclusion, will be rateable on the ground that they are no longer beneficially occupied by the public but are being occupied by the local authority for their own purposes."
In the Redcar case the Lord Chief Justice at [1942] 2 All ER 589, 594 said:
"The basic principle on which the Brockwell Park case was decided was that, although the legal possession was vested in the county council, they were 'merely custodians or trustees to hold it and manage it for the use of the public'. As Lord Halesbury said, the county council were incapable by law of using the park for any profitable purpose. They must allow the public the free unrestricted use of it. This certainly would not be an accurate description of the possession of Redcar Corporation. I do not attach any importance of fact that there is nothing to show any irrevocable dedication of this land and works and buildings to the use of the public, but, in truth and in fact, these hereditaments, taken as a whole, are not used so as to allow the public the free and unrestricted use of them.... I take the test which Brett LJ laid down in Hare v. Overseers in Putney, that test was 'that there is no beneficial occupation, if by law no benefit can arise to the occupier'. Applying that test, I think the corporation failed....... The corporation are in occupation and in beneficial occupation.........
In the present case the district council permit the licensee to use the site as a trampoline pitch but they do not require her to do so. They seek to regulate the hours of business and such matters as erection of a suitable fence, the cleaning of the site and the use of display boards; but they do not seek to regulate the charges. The scale of operations is vastly different from that reported in the Redcar case but the principles are the same.
Having already established that there is a beneficial occupation of the site it would be difficult to find that the public have a free and unrestricted use of the site as an ancillary of the adjoining park. It can rarely happen that the use of a park by the public is not subject to some restriction evidenced by notices such as "keep off the grass", "no ball games" and "the park closes at . . .", but these are all intended for the better enjoyment of the park. So too, special parts of the park may be allocated for certain uses such as a children's playground equipped with swings, roundabout and slides. In my view it is not the fencing of the site or the introduction of charges that are necessary fatal to the ratepayer case but the creation of a beneficial occupation which of necessity excludes the public from the free and unrestricted use of the site. For these reasons it cannot be regarded as an ancillary of the park.
There remains the issue as to the quantum of the assessment. Mr Jones produced the following valuation:
162.2 sm at £0.36 psm 58.00
6 holes at £15 90.00
Hut 3.1 sm 3.00
Fence
£151.00
Net annual value say, £150.00
He compares this assessment with the agreed assessments on the donkey enclosure of £150 and the golf site at £200 net annual value.
The rate of £0.36 psm is the same rate as that applied to 418 sm of grass land in the donkey enclosure and compares with £0.60 applied to 334.4 sm of concrete on the golf site together with concrete plinths containing each tee, fairway, bunker and hole.
The ratepayer produced no evidence in support of her contention that the assessment was excessive but criticised the addition of £90 in respect of the six holes or trenches. Having inspected the site I am inclined to the view that the figure of £90 is excessive. The walls and floors of the trenches are bare earth with a minimum of timber framing. The steel trampoline frames set into the trenches are in my view tenant's chattels and are not rateable. Therefore I reduce the assessment to net annual value of £90.
R v Catt 1795 R v Field 1794 Commissioner of Valuation for NI v Fermanagh Protestant Board of Education 1969 Hirst v Sargeant 1966
East Midlands Electricity Board v Hudson 1986
LIVERPOOL ROMAN CATHOLIC ARCHDIOCESAN TRUSTEES INCORPORATED V. MACKAY VO
References : [1988] RA 91
Lands Tribunal
This appeal, against the decision of the Greater Manchester (North) Local Valuation Court, is concerned with premises known as St James' Social Centre and Club and whether they are exempt from rates in accordance with section 39(2)(b) of the General Rate Act 1967.
The appeal hereditament is situated on land owned by the appellants which contains also St. James' Roman Catholic Church, the Presbytery, the Orrell Roman Catholic Primary School, a bowling green and pavilion and a car park which is common to all these buildings. The appellants built the social centre and club in 1971. It is single storey, built of brick with a flat mineral felt roof. In 1976 following a fire the premises were refurbished and the hall extended to accommodate inter alia a small secondary bar at the end of the hall. The total internal area of the premises as now extended amounts to 610.4 square metres. The hall is 300 square metres, the two bar stores and spirit store total 102.8 square metres and the games room, lounge, committee room and kitchen 207.6 square metres.
The premises were originally entered in the valuation list as "Parochial Hall, St James' Roman Catholic Social Centre, exempt". The proposal originating these proceedings was made by the valuation officer on 14th March 1986 seeking to bring the premises into assessment on the grounds that they now ceased to be exempt under section 39 of the General Rate Act 1967. The appellants objected to this proposal and when the matter came before the local valuation court that court confirmed an assessment in the list of gross value £2,750 rateable value £2,263 to include also the adjoining bowling green. The court's reasoned decision is attached hereto (Appendix 1).
The Liverpool Roman Catholic Archdiocesan Trustees Incorporated appeal to this Tribunal seeking exemption of the social centre from rating and the respondent valuation officer seeks to establish an assessment of gross value £1,500 rateable value £1,222.
It is now agreed between the parties that the bowling green should be separately assessed at rateable value £50 and in the event of the social centre not being exempt it should be assessed at gross value £1,500 rateable value £1,222.
Mr Stephen J. Sauvain appeared for the appellants and called Mr P.T. Roberts FRICS, a senior executive in the firm of H.H. and J. Robinson Surveyors of Manchester and Liverpool and responsible for that firm's rating department; the Reverend Kevin Walsh, the parish priest of St. James' Orrell; and the Very Reverend Michael McKenna, Episcopal Vicar for Finance and Development in the Archdiocese of Liverpool.
Mr D. Jaggi, Solicitor of Inland Revenue, appeared for the valuation officer and did not call any evidence.
The relevant parts of section 39 of the General Rate Act 1967 read as follows:
"39. (1) Subject to the provisions of this section, and without prejudice to any exemption from, or privilege in respect of, rates under any enactment other than this section, no hereditament to which this section applies shall, in the case of any rating area, be liable to be rated for any rate period.
(2) This section applies to the following hereditaments, that is to say
(a) places of public religious worship which belong to the Church of England or to the Church in Wales (within the meaning of the Welsh Church Act 1914), or which are for the time being certified as required by law as places of religious worship; and
(b) any church hall, chapel hall or similar building used in connection with any such place of public religious worship, and so used for the purposes of the organisation responsible for the conduct of public religious worship in that place,
and also applies to any hereditament consisting of such a place of public religious worship as is mentioned in paragraph (a) of this subsection together with one or more church halls, chapel halls or other buildings such as are mentioned in paragraph (b) thereof."
From a statement of agreed facts, agreed plans and other documents produced at the hearing and from the evidence, in addition to the facts already referred to, I find the following summary of facts to be material to consideration of the issues:
Rules of the Club
There are 32 rules to the club. The objects of the club are to foster the spiritual and social life and well being of the parish of St James' by providing the members with opportunities and facilities for sociality, recreation and refreshment in suitable surroundings and to raise money for parochial purposes. All monies resulting from the activities of the club should be handed to the parish priest, to be applied by him for such purposes connected with the parish that he shall in his absolute discretion think fit after meeting the expenses of the club. The parochial hall and the contents are owned by the trustees of the Archdiocese of Liverpool, and are under the custodianship of the parish priest who may at any time and on any occasion deny use to the club without assigning any reason.
Membership shall be open to all members of St James' Parish over the age of 18 and to such other persons over that age as shall be approved by the parish priest and committee.
The chaplain and spiritual advisor of the club shall be the parish priest or a person appointed by him. The parish priest has a right to veto all proceedings and activities of the club which he shall in his absolute discretion consider to be contrary to the interest of the parish. He has the right to remove from office any officer or member of the management committee without assigning any reason. His approval is required for the management committee to make, vary or revoke any bye laws. His approval is required as to the days and hours when the club should be opened and the permitted hours for the supply of intoxicants fixed by the licensing justice. The parish priest has power to elect the members of the management committee but in fact the members are elected by a democratic process. On dissolution of the club any surplus monies remaining are to be handed to the parish priest.
Justices Licence
A Justices' on licence authorises Kevin Walsh (the parish priest) to retail intoxicating liquors at the premises known as St. James' Social Centre and Club.
Use
The premises are put to a variety of uses which may be roughly grouped into different categories as follows:
Uses directly connected with public religious worship in the church of St. James'; these include meetings after mass, preparation meetings for First Communion and Confirmation and family celebrations after that service, receptions.
Uses directly in connection with the church of St. James'; these include meetings of the Parish Group of Scouts, Guides and Brownies, Justice and Peace Group, Ladies Blessed Sacrament Guild, Catholic Women's League, social meetings after choir practices, Senior Citizens Group, Toddlers Group, St. Vincent De Paul Society and committee meetings.
Uses indirectly in connection with the Church of St. James'; these include primary school drama, PT and other meetings, social meetings to raise funds for Lourdes Pilgrimage, charitable and foreign missions.
Uses for social activities directly connected with the Parish of St. James'; these include youth disco's, Friday social evenings with resident and occasional professional musicians and other club socials with dancing, professional artists and bingo.
Uses that have not been shown to have a direct link with St. James' Church or the parish; these include club meetings in connection with badminton, cricket, rugby, angling and sailing, football and other social meetings of outside organisations such as the Stetley Brickworks Social.
Except in only the last group the parish priest makes a point of being in attendance for some of the time at most of the functions.
Accounts
It is sufficient to refer to the profit and loss account for the year ending 30th September 1985 when the total turnover was £139,930 of which £125,096 was in respect of bar sales leaving a net profit for the year of £5,389 after deducting, inter alia, the expenses of rates, heating, lighting, repairs and maintenance. From this sum £4,800 was transferred to the parish priest.
The Trust
Under a Trust Deed dated 18th March 1983 the Liverpool Roman Catholic Archdiocesan Trustees Incorporated hold the premises for the advancement of the Roman Catholic religion in the dioceses.
I was referred to the following authorities and previous decisions of the Lands Tribunal:
Trustees of West London Methodist Mission v. Holborn Borough Council (1958) 3 R.R.C. 86
The Trustees of the Roman Catholic Diocese of Hexham & Newcastle v. RA Little .(Valuation Officer) and The Council of the Borough of South Tyneside (LVC/443/1981) J.H. Emlyn Jones Esq., FRICS
Levene (Valuation Officer) v. Lubavitch Foundation [1982] RA 246
Westminster Roman Catholic Diocese Trustee v. Hampsher (valuation Officer) [1975] RA 1
Swansea City Council v. N.G. Edward (Valuation Officer) and the Trustees of Our Lady of Lourdes Roman Catholic Church (1976) 20 R.R.C. 401
Case (Valuation Officer) v. British Railways Board [1972] RA 97
Submissions by counsel
Counsel for the appellants submitted that the premises were a church hall. They were constructed by the church, for the church, inthe grounds of the church. The main part of the building was a hall and the other rooms were clearly and solely used together with the hall. Applying a functional test the premises were used for 'normal church hall' purposes as described in Hampsher.There was little doubt that this use was in connection with St. James' Parish Church.
The organisation responsible for the conduct of public religious worship at the church was the Roman Catholic Church acting through the parish priest. The church owned the property within the Archdiocese through the agency of the (Incorporated) Trustees. The purposes of that organisation were not confined to the conduct of religious worship nor could section 39(2)(b) have anticipated that this should be so. It was part of the duty of the parish priest to care for the spiritual, bodily and social welfare of his parish.
The premises were used for a wide variety of functions connected with the church at all times of the day. Part of this use was the club which was primarily a Roman Catholic Club although membership was not exclusively Roman Catholic and the objects of the club were "to foster the spiritual and social life and well being of the Parish of St. James "
All the other uses, except for a minority where a rent was charged, were connected to the Roman Catholic Church in some way although some of the actual functions might have no particular connection. The parish priest regarded the premises as effectively the focal point of the parish and the club as being one element or instrument in the fostering of a sense of community in the parish.
The club was a propriety club with the parish priest as proprietor and with a Justices' on licence in his namerather than a club registration certificate. The priest hadcontrol over the activities of the club and employed the steward.
It was the Roman Catholic Church through the parish priest that had exclusive occupation of the premises and not the club. He sought to distinguish the facts in the Hexham case.
The Solicitor of Inland Revenue contended that in deciding whether the premises were a church hall or similar to, the main test was that of function or use although the architectural test, particularly as to the internal layout and arrangement, was not irrelevant.
The objectives or motives of the user were not relevant to this test. The local valuation court had found as a fact that the premises were more accurately described as a social centre and club and that the hereditament was in the occupation of the management committee of the club, notwithstanding the dominant position in all matters held by the parish priest.
On the first test required by Section 39(2)(b) he submitted that the non church use predominated and therefore the premises could not be described as a church hall or similar to a church hall.
As to the second test he agreed that the premises were used to more than a minimum extent in connection with St. James' Church and that that satisfied the second test but that was not to say that it satisfied the first test.
As to the third test he agreed that it was necessary to consider the occupation of the premises and who was the rateable occupier. He referred to the general principles of rating occupation as set out in pages 22 to 25 of the 13th Edition of Ryde on Rating. In considering who was in exclusive occupation and who had paramount occupation it was necessary to consider the facts of occupation rather than the rights of occupation. In fact the church did not exercise overriding control of the club and if it had the club would have failed. He relied on Levene and Hexham.
Decision
I have viewed the appeal premises and the adjoining church lands and premises. What I have to decide, as a matter of law and fact, is whether or not the premises come within the provisions of Section 39 of the General Rate Act 1967.
It is not disputed that St. James' Church is a place of public religious worship within the meaning of Section 39(2)(a) of that Act. The only matter in dispute is whether the appeal premises come within Section 39(2)(b) and it is common ground that there are three tests to be applied and that in the words of Mr Emlyn Jones in Swansea "in order to give meaning to these words each qualification must be taken as narrowing the field of exemption". The first test is that the premises must be a church hall or similar building; secondly, that they must be used in connection with a place of public religious worship (in this case St. James' Church); thirdly, they must be used for the purposes of the organisation responsible for the conduct of public religious worship in St. James' Church.
So much is not disputed, I now come to each test in turn.
Church Hall or similar building
There is no definition of 'church hall' and therefore I think it is necessary to rely on the ordinary meaning or understanding of these words. This must vary as to sect, religion, locality and era. At this stage, therefore, the test is a broad one to identify the type of premises under consideration. It could exclude for example a church school, as in Levene but could include a church hostel as in Hampsher. The primary consideration is not the architectural features of the premises (see Holborn) although these should not be excluded from consideration particularly as to the internal layout of the premises and their fitness for use for certain purposes and whether indeed there is a hall. It seems to me that the principle consideration in all previous decisions has been the use of the premises and I would follow that practice.
In the present case the premises are a modern single storey building purpose built as a hall, with ancillary accommodation, for use as a community centre. In design and layout they may be said to be not dissimilar from a working mens club or social centre forming part of an industrial complex or a community centre or indeed a modern church hall. What distinguishes them as a church hall is that they were purpose built by the church, on church land, adjoining the Parish Church, for use by the members of that parish and others as a community centre. On these facts in my view the premises are a church hall and it is unnecessary to consider the alternative as to whether they are a similar building.
Use in connection with any such place of public religious worship
This test is not qualified by any such words as wholly, mainly or substantially and it is not disputed in this case that as the premises are used in connection with St. James' Church to more than a minimal extent they qualify under the second test.
So used for the purposes of the organisation responsible for the conduct of public religious worship in that place
It seems to me that the expression 'used for the purposes of' means that prima facie one has to consider who is the rateable occupier.
The four ingredients of rateable occupation as per the learned authors of Ryde on Rating 13th Edition at page 27 are
"first, there must be actual occupation, or possession; secondly, it must be exclusive for the particular purpose of the possessor; thirdly, the possession must be of some value of benefit to the possessor; and fourthly, the possession must not be for too transient a period".
I think it is the first two ingredients that require detailed consideration in the present case. On the evidence it seems to me that there are two principle uses of the premises, one by the church directly for church purposes connected with the religious instruction or welfare, the other by the club in connection with the social aspect of the parish.
The parish priest's powers to control the use of the premises for any purpose are absolute, but legal control is not sufficient to establish rateable occupation; there must also be control in fact.
In fact the parish priest has not needed to exercise his draconian powers because the affairs of the centre are run on democratic lines and in accordance with the needs of the church. The parish priest holds the keys to the premises. He employs the permanent staff. He is entitled to receive the turnover but in fact receives the net profit after expenses have been paid. He co signs all cheques. He influences the way in which the club conducts its affairs and he regularly visits the hall when club and other activities are in progress.
It seems to me that the Roman Catholic Church through the parish priest has not only legal control of the occupation but also in fact operates a control sufficient to establish that the church retains exclusive occupation of the premises and is indeed the rateable occupier.
Having so decided it is then necessary to establish whether that use is for the purposes of the organisation responsible for the conduct of public religious worship in the parish church. On the evidence I have heard I am satisfied that the occupation of the appeal premises by the church, directly for church purposes, is a significant use and is sufficient to establish that the premises are used for the purposes of the organisation responsible for the conduct of public religious worship in St. James' Church. It is therefore unnecessary for me to decide that the use of the premises by the club is for the purposes of the church but I would have so decided in any event. It seems to me that the objects of the club set out in its rules and as exercised and practised are to enable the social activities of the parish to be conducted in a manner fitting to the purposes of the church. No doubt dancing, singing, drinking and gambling were at one time universally regarded as acts of evil and in certain quarters still are. In that light it might be difficult to see how the purposes of the church can be furthered in such an atmosphere, but it is clear that in the parish of St. James' there is a modern, and perhaps more enlightened, view as to the conduct of community social gatherings that are not in conflict with the purposes of the church.
For these reasons I find that the appeal premises come within Section 39(2)(b) of the General Rate Act 1967. However, as the premises are in part, albeit a very small part, let out for use otherwise than as a church hall it falls to be assessed under Section 39(3) of that Act. It is agreed between the parties that notwithstanding that fact the premises do not cease to be wholly exempt from rating.
Therefore the appeal succeeds. I direct that the valuation list be amended so as to record that the Club and Premises are exempt from rating
References : [1952] 2 QB 55; 116 J.P. 168; 96 S.J. 165; [1952] 1 All ER 601; 45 R. 7 I.T. 166; 50 L.G.R. 286; [102 LJ 500; 116 J.P.J. 420], CA
Lands Tribunal
This is an appeal by the valuation officer authorised by the Commissioners of Inland Revenue to act as the valuation officer in relation to the list for the rating area of the Downham Market Urban District Council. The council axe the owners of a playing field situated in Lynn Road, Downham Market.
The land which is now the playing field was acquired at the end of the recent war as a war memorial. The decision to acquire it was made at a public meeting at which it was proposed that a suitable form of memorial would be a recreation ground for the use of the public, part of which would be laid out as a garden of remembrance. Subscriptions were called for and with the aid of a grant from the Ministry of Education a sum of £6,000 was raised.
The question then had to be decided as to who should own the land, and after some discussion it was conveyed to the council by a conveyance dated the 31st December, 1946. This was a direct conveyance from the previous owners of the land, Radio Garage Co. Ltd., to the council at a price of £1,000.
The land is described as
" freehold pasture land known as 'The Cricket Field' situate in Downham Market and containing seven acres, three roods and thirty seven perches (more or less) being No. 183 and part of No. 16 on the Ordnance Survey map (2nd ed., 1905) of the parish of Downham Market bounded on the North by Mill Lane and on the East by the main road from Downham Market to King's Lynn."
The conveyance contains the following provision:
"3. The Local Authority hereby declare that they will hold the premises hereby conveyed upon the trusts following that is to say upon trust for the perpetual use thereof by the public for the purposes of exercise and recreation pursuant to the provisions of the Open Spaces Act, 1906."
The management of the ground is in the hands of the council through a playing fields committee. The principal games played are football, cricket and tennis. There is a putting green which is falling out of use and a space set apart for a children's playing field. A garden of remembrance adjoins the ground in a separate enclosure.
Football and cricket are arranged under an agreement dated the 6th February, 1951, between an organisation known as the Federation of Downham Market Football and Cricket Clubs and the council. This agreement recites that
" The council, having vested in them a field known as the war memorial playing field, hereby grant the federation permission to use the cricket and football pitches and dressing rooms on the said field for organised matches in accordance with a list of fixtures to be submitted to and approved by the council for a period of two and a half years, commencing on the 1st February in the year 1951 and terminating on the 31st July in the year 1953."
In consideration of this the federation agree to pay a rent of £85 a year and they
"may close the entrance to the field on such dates as are set out in the list of fixtures for the purpose of making a charge for admission to the field and may also make collection on the field on these dates, the closing of the entrance to be subject however to granting right of access to users of the tennis courts, putting green and any other amenities provided by the council on the field."
There are provisions for the use of the pitches on Sundays and the federation appears to have the right to sub let and there are other provisions as to the use of the ground for practice, for the fixing of a barrier round the football pitch, for the proper use of the ground and for the maintenance of order, etc.
There are two tennis courts with nine clubs using them during the week. The only buildings on the land are a timber pavilion and a small shed where a motor tractor and other things are kept for use on the ground. There is also a car park for which there is no charge to patrons of the football and cricket grounds.
The expenses of keeping up the ground, including the wages of a groundsman permanently employed, exceed the total amount received for the use of the football and cricket pitches and the tennis courts. The excess is paid out of the rates, the intention being to restrict the amount of this excess to what can be covered by a rate of 4d. or 5d. in the £.
The grounds of appeal were that the decision of the local valuation court was wrong and that the hereditament is in the rateable occupation of the Downham Market Urban District Council and that the assessment of £10 gross value, £9 rateable, value, should be restored to the valuation list. It is contended on behalf of the council that, under the terms of the conveyance of the 31st December, 1946, quoted above, the land is "struck with sterility" in that it is declared to be held in trust for the perpetual use thereof by the public for the purposes of exercise and recreation pursuant to the provisions of the Open Spaces Act, 1906.
Counsel for the valuation officer suggested that the reference to the Open Spaces Act, 1906, must be read in conjunction with the sections of the Local Government Act, 1933, which give to local authorities the power to appropriate for any purpose land which is no longer required for the purposes for which it was originally hold or to let or sell land which they own. It must, however, be observed that, particularly in appropriating land for a new purpose, such appropriation shall be subject to any covenant or restriction affecting the use of the land, and further, by s. 179 (d) of the 1933 Act, it is expressly provided that nothing in the Act shall authorise the disposal of land by a local authority in breach of any trust, covenant or agreement binding upon the authority. Apart from these limitations I cannot think that there is any justification in extending the reference to the Open Spaces Act in the conveyance of the land by bringing in the provisions of the 1933 Act referred to. I can find nothing in the Open Spaces Act except the power conferred on the local authority to accept this land as an open space and in accepting it they have expressly undertaken to keep it for the perpetual use thereof by the public for the purposes of exercise and recreation.
The facts of this case appear to place it somewhere between cases such as the Brockwell Park case, the Alexandra Park or Manchester Case and Liverpool Corporation v. West Derby Assessment Committee, where the local authorities were held to be not in rateable occupation, and cases such as London Playing Fields Society. v. South West Essex Assessment Committee, the Soane's Museum case, the Dunfermline case and the Bowes Museum caseas decided by this tribunal, where the trustees in each case were held to be in beneficial occupation.
From consideration of these cases the first thing that emerges is that a statutory duty to acquire land and use it for the purposes of providing an open space is a strong element in deciding that the authority acting under such statutory duty is not in beneficial occupation, and that where a hereditament is occupied under the provisions of a private trust the trustees are in occupation for the purposes of the trust, whether or not these purposes are for the benefit of the public, and that therefore the trustees are in beneficial occupation.
As I see the facts in this case, Downham Market Urban District Council do not occupy this land in consequence of or for the purpose of carrying out any duty imposed upon them by statute, or otherwise ; they merely accepted the land as an open space. The essential point, however, is that in doing so (as I have already said) they declared that they would hold it for the perpetual use of the public. The Oxford Dictionary defines the word "perpetual" as "lasting or destined to last for ever" or "that serves, is applicable, or remains valid for all time to come or for an unlimited time." It is difficult to think otherwise than that by the use of this word it was intended to sterilise this land for any purpose other than use as an open space for the use of the people of Downham Market. I have no doubt in my own mind but that the council have no beneficial occupation, the land has been only committed to their keeping, they are merely custodians and trustees for the public. See Lord Halsbury in the Brockwell Park case ([1897] A.C. 630).
The money for this scheme was raised from the public at large. They were not a few private individuals creating a private trust for some public purpose.
Having said this, I possibly ought to say that I have not overlooked the agreement with the Federation of Cricket and Football Clubs and the charges which are made for admission. I regard this as a purely administrative method for regulating the use of the grounds. It is clear that it was never the intention that the charges which are allowed for admission from time to time and the payments made by the federation and the tennis clubs would be anything more than a means of controlling the use of the grounds, and the public would have a right to complain if they were put so high as to cause the council to make a profit.
I therefore decide that the Downham Market Urban District Council are not in beneficial occupation of the premises, which in the circumstances of their present ownership and use are not in my opinion of the nature of lands, tenements, hereditaments or property which are or may become liable to any rate, and I confirm
References: [1988] RA 53
Lands Tribunal
This is a rating appeal which raises an issue of considerable practical importance in the law of rating valuation. The appeal is brought by the valuation officer against a decision of the East Sussex Valuation Tribunal issued on 30 April 1993 in respect of an office building Anston House at 137/139 Preston Road Brighton. The Valuation Tribunal reduced the assessment for this hereditament Bon, £272,000 to £11,751 with effect from 1 April 1990. The reduced assessment represents £11,750 as the agreed value of car parking spaces, and a nominal £1 for the building
By order of the Tribunal dated 20 June 1997 made by consent, the following point of law was ordered to be determined at a preliminary hearing-
"Whether It is to be assumed for the purposes of para 2(1) of Schedule 6 to the Local Government finance Act 1988 (hereinafter called the 1988 Act):
(a) that the hereditament should be valued as it physically was on the material date, take into account any disrepair then existing; or
(b) that any disrepair which was in existence at the material day had in fact been remedied by the hypothetical landlord save only for any disrepair which falls to be excluded from that assumption by virtue of the economic test referred to in Saunders v. Malby (VO) [1976] RA 109 and Civil Aviation Authority v. Langford and Camden London Borough [1980] RA 369, 257 EG 273, CA; (1978) 247 EG 957, 1019; [1979] JPL 316, Lands Tribunal".
Paragraph 2(1) of Schedule 6 of the 1988 Act provides-
"2(1 ) The rateable value of a non-domestic hereditament.. shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year if the tenant undertook to pay all usual tenants rata; and sexes and to bear the costs of the repairs and insurance and the other experts" (if any) necessary to maintain the hereditament in a state to command that rent '
It appears that this is the first time since the passing of the 1988 Act that the issue raised in this appeal has come before the Lands Tribunal for determination. The parties agreed a comprehensive statement of fact which I can summarise for present purposes as follows:
(1) The appeal hereditament is situated in Presson Road, Brighton, which is part of the A23 London to Brighton Truck road. It is about one mile north of the Brighton Town Centre.
(2) The hereditament consists of a 1964/5 speculatively built office block constructed of brick with concrete Doors under a flat roof. The building is T shaped and on a sloping site It has nine storey at the front and seven storeys at the rear and a basement. The building has a central service core, two passenger lifts and an external service lift. All three lifts were out of service at the material date. There is a car park at the front and sides of the building There are agreed plans of the hereditament.
(3) The respondent company is and at all material times was the freehold owner of the hereditament. The building was first occupied in 1966 and became vacant in 1987. It has remained empty since that time.
(4) The material date is agreed to be 21 September 1990 when the respondent's agents served a proposal to reduce the assessment of £272,000 rateable value to a nominal £1 rateable value untie effect from 1 April 1990 (the effective day).
(5) It is agreed that at the material date Anston House was suffering from disrepair. Repairs were required in order to put the property into & condition to command annual rent of £272,000.
(6) There is disagreement as to the physical state of the building at the material date, and thus as to the nature and extent of the repairs then required. It is however. agreed that the works (which the valuation officer contends are repairs) required to put the property into a condition to command a rent of £272,000 would cost not less dun £300,000; the respondent believes the actual cost would be figure access of £300,000.
(7) The appellant valuation officer accepts that if it cannot be assumed that these deficiencies have been remedied, then the rateable value as determined by the Valuation Tribunal is correct and the appeal should be dismissed.
(8) The hereditament was entered in the Rating List at 1 April 1990 as "offices, car park and premises",' at rateable value £272,000. As stated above the respondent's agent served a proposal on 21 September 1990 to reduce that assessment to rateable value £1.00 with effect from 1 April 1990 and that the entry in the Rating List be amended to '"vacant offices and premises". The valuation officer being of the opinion that this proposal was not well founded, it was referred as an appeal to the East Sussex Valuation Tribunal. The appeal was heard on 16 February 1993 and the decision of the valuation tribunal was issued on 30 April 1993. Notice of appeal to the Lands Tribunal was given on 18 May 1993
At the hearing before me the appellant valuation officer was represented by Mr David Holgate QC and the respondent company was represented by Mr Richard Glover of counsel. Both counsel presented written skeleton submissions which I found most helpful. It was agreed that I would not be assisted by an inspection of the premises.
Mr Holgate opening the case stated that the contention of the valuation officer was represented by the second alternative. He referred to the summary of case law appearing in Ryde on Rating E294 - 297 as establishing four propositions namely-
(1) The rebus sic stantibus rule does not apply to defects due to ordinary disrepair,
(2) The cases in which that exception was established arose "largely" in the context of assessment to gross value under the General Rate Act 1967.
(3) Those principles nevertheless "are equally applicable when, as now, the obligation to repair falls upon the tenant", (4) The assumption that the landlord is to be taken to have carried out the necessary repairs does not apply if the cost of such repairs would be out of all proportion to the value of the property, so that a reasonable landlord would not do them but would instead accept a lower rent
Mr Holgate reviewed the relevant legislative history, referring first to the Rating & Valuation Act 1925. Under section 22(1)(a) the majority of hereditaments including houses buildings and land were assessed to gross value, meaning that under the hypothetical tenancy the landlord bore the costs of repairs. A statutory deduction was then made in accordance with the second schedule to ascertain the net annual value (NAV). Under section 22(1)(b) all other hereditaments were assessed direct to NAV, on the basis that the tenant bore the cost of repairs and insurance etc
The Valuation for Rating Act 1953 section 2 had provided that the gross value of dwelling and garages was to be taken as the rental value under a hypothetical letting as at 30 June 1939 with the landlord responsible for repairs etc, or (if lower) the gross value at the date of valuation for the new valuation list. The statute required the assumption to be made that the hereditament was subsisting on 30 June 1939 in the state in which it actually was at the date of valuation, and similarly the locality as respects other premises, transport facilities etc were the same in 1939 as at the time of valuation.
Mr Holgate then referred to section 5 of the Rating & Valuation (Miscellaneous Provisions) Act 1955 and to section 19 of the General Rate Act 1967t, the effect of which was to define rateable value was to define NAV, which in the case of house and non-industrial buildings was to be assessed by having reference to the statutory deduction from gross value. Gross value was defined by reference to a hypothetical letting where the landlord bears the cost of repairs and insurance etc. Other hereditaments were to be assessed directly to NAV with the assumption that the hypothetical tenant bore the cost of repairs, insurance etc.
Under the Local Government Planning and Land Act 1980 section 29, the assessment to gross value with a deduction to determine NAV was confined to dwelling house and private garages and storage.
Mr Holgate finally referred to section 56 and Schedule 6 of the Local Government Finance Act 1988 (the 1988 Act) which has the effect of valuing non-domestic hereditaments directly to a rental value under a hypothetical tenancy which assumes that the tenant bears the cost of repairs, insurance etc. He drew particular attention to para 2(5) and (7) of Schedule 6, which requires that certain physical factors "shall be taken to be as they are assumed to be on the day on which the list must be compiled"'. Those factors include the physical state or physical environment of the hereditament, the mode or category of occupation. the physical state of the locality, and the use or occupation of other premises in the locality.
Against that legislative background Mr Holgate referred to the authorities commencing with Wexler v. Playle VO [1960] 1 QB 217(CA) a decision of the Court of Appeal upon the construction of section 2(1) - (3) of the 1955 Act. He analysed the report of the case in detail submitting first that the court's doubt as to whether the word "state" in section 2(3) included the state of repair and as to whether the phrases in section 2(2) "necessary to maintain the hereditament in a state to command the rent" referred to "the cost of repairs and insurance" or only to "the other expenses", were not decisive and were obiter dicta.
Secondly he submitted that the true ratio rested on the formula that what was to be assessed was the rent at which the hereditament "might reasonably have been expected .... to let" between a landlord and a tenant acting reasonably. On that basis the Court of Appeal held that the hypothetical landlord acting reasonably would carry out repairs prior to commencement of the tenancy, not by virtue of his repairing covenant or statutory obligation. Thus the decision did not depend on the fact that the hereditament was assessed to gross value rather than direct to NAV, where the tenant is assumed to be liable to repairs.
In Saunders v. Maltby (VO) [1976] RA 109, a case relating to a dwelling house assessed to gross value, the Court of Appeal considered Wexler v. Playle VO, holding that the explanation of that case was that a hypothetical landlord would do such repairs as it was economically sensible for him to do; accordingly the decision did not rest simply on the scope of the landlord's covenant. It was necessary to cost the repairs and to determine whether the expenditure was such that "it would be out of all sense to do the repairs" - per Lord Denning MR. If so, the hypothetical landlord would let at a low rent. The case was remitted to the Lands Tribunal on that basis.
Mr Holgate referred to Foote v. Gibson (VO) (unreported - LT ref. LVC/725/1980) as an instance of this principle in practice. The Lands Tribunal (Mr C R Mallett FRICS) held the cost of repairs to be such in relation to the prospective rent that the reasonable hypothetical landlord would carry them out in order to obtain the rent
He referred next to Camden LBC v. CAA [1980] RA 369, the Space House case. The Lands Tribunal had applied Wexler by assuming that works of "repair" were carried out at the valuation date, but held that other works were not repairs but substantial structural defects which could not be ignored under the rebus sic stantibus principle. The building was unlettable. This decision was upheld by the Court of Appeal. There were other instances where the Wexler approach was applied in the case of hereditaments assessable directly to NAV under the pre-1988 legislation. See Myddleton v. Charles (VO) (1958) 51 R & 1T 106; Birchenwood Gas & Coke Co v. Hampshire (VO) (1959) 52 R & 1T 226; Nicholson v. Allsop (VO)(1971) 17 RRC 143.
Mr Holgate quoted the dictum of Scott LJ in Robinson Brewers v. Houghton & Chester Le Street Assessment Committee [1937] 2 KB 445 at 469 - "It is the duty of the valuer to take into consideration every intrinsic quality and every intrinsic circumstance which tends to push the rental value up or down ..." He submitted that a repairing covenant embraced such items of work which do not involve giving a landlord or a tenant something wholly different from the demise see Ravenseft Properties v. Davstone [1980] QB 12 at 21. Works which go beyond the bounds of repair as so defined are not "repairs". Thus an assumption that repairs have been carried out does not alter the fundamental intrinsic nature of the hereditament. In reality therefore the principle in Wexler does no violence to the rebus principle, or no violence of any consequence. In this context Mr Holgate also referred to passages in the speeches of Lord Pearce and Lord Wilberforce in Dawkins v. Ash Bros & Heaton [1969] 2 AC 366
Mr Holgate submitted that in any letting the landlord would seek to obtain the best available economic returns. If it is sensible to repair before letting on order to maintain the rental value, it is reasonable to assume the landlord will do so. Both Wexler and Saunders v. Maltby simply give effect to that economic fact of life The advantage of this approach is that it enables all properties to be assessed on a common basis, namely that they are assumed to be in reasonable repair irrespective of the precise stage in the individual cycle of repair. To require all assessments to be on the basis of the actual state of repair for each building would impose a large burden on valuation officers, valuers, and tribunals throughout the country. Mr Holgate pointed to the scale of the valuation exercise and that almost by definition the Lands Tribunal would see only the marginal cases. There was no reason to suppose Parliament intended that evidence on the state of repair, the cause of disrepair, the nature and cost of remedial work should be necessary, and not only for the individual hereditament but also for relevant comparable. He referred to the principle of statutory construction that where Parliament uses in an Act a legal term which has received judicial interpretation, it must be assumed that the term is used in the same sense unless a contrary indication appears - see Craies on Statute Law (7th Edition) at page 167. Mr Holgate submitted that this principle applies to the use of the phrase "might reasonably be expected to let" in the 1988 Act Schedule 6. The draftsman must be assumed to be aware of such decisions as Wexler
Schedule 6 had adopted the former NAV formula, where the tenant is assumed liable for repairs and insurance, because that was the basis on which comparable evidence for non-domestic purposes is most likely to be available - see Hansard extract (15 May 1980 col. 1115) He submitted that it was not intended to change the approach in the Wexler line of authority, and no "contrary contention" was shown. Thus it is to be assumed that a reasonable landlord will carry out economically sensible repairs as before the hypothetical tenancy starts
Mr Richard Glover on behalf of the ratepayer referred to the rebus sic stantibus rule, as defended by Lord Wilberforce in Dawkins v. Ash Bros and Heaton and by Scott LJ in the Robinson Bros case and Lord Maughan in Townley Mill Ltd v. Oldham Assessment Committee [1937] AC 419 at page 6/7. The general principle is that a hereditament is to be valued as "warts and all" in the physical state in which it is found on the material date. This general rule was recognised in para 2(5) and (7) of schedule 6. The deficiencies in this particular hereditament which he pointed out affect the physical state and enjoyment of the premises to the tune of rateable value £260,249, clearly fell within the wording in para 2(7)(a) as "matters affecting the physical state or physical enjoyment of the hereditament It followed that the hereditament was to be valued on the basis that its physical state including al the advantages ant disadvantages) is as it is taken to have been on the material day, as to which the facts are in substance agreed.
Mr Glover submitted that the decision in Wexler v. Playle VO and subsequent cases depended on the fact that the repairing obligation was on the landlord, and thus the tenant could require the landlord to put the hereditament into a reasonable state before the tenancy commenced. He referred to passages in each of the judgments in Wexler. and summarised the effect of the decision of the Court of Appeal as
(a) the repairing obligation is to keep the hereditament in a state of good and reasonable repair: and
(b) as that obligation was in that case on the landlord, one assumed that the landlord would comply with his obligation and put the hereditament into such a state.
Mr Glover said thatSaunders v. Maltby proceeded on a similar basis - see per Goff LJ 19 RRC 33 at pp 40-41.
In the present case the obligation to repair is on the tenant and applying the same analysis will produce a different remit. If the tenant's repairing obligation is to put the hereditament in repair, that will reduce his rental bid. He would not pay the same for a hereditament in a poor state of repair as he would for a hereditament in good repair. This was so even if the obligation on the tenant were no more onerous than to maintain the hereditament m the mason" poor state of repair. The rental bid would be even less if the tenant took on the obligation to put and keep the hereditament in good repair and to use part or all of the term for that purpose.
Mr Glover referred to Snowman Ltd v McLean (VO) 251 EG 859. This was a case where the valuation was on the basis that the tenant bore the repairing obligation The Tribunal rejected an argument of the valuation officer based on Wexler v. Playle VO and Saunders v. Maltbythat visible defects court be assumed to have been remedied by the outgoing tenant, and accepted that these defects would reduce the hypothetical tenant's bid. He referred also to Myddleton v. Charles (VO) the sporting rights case, pointing out that this decision did not depend on the hypothesis that the landlord had remedied defects of repair prior to commencement of the tenancy.
The decision of the Court of Appeal in Camden v. CAA (the Space House case) also meant that of necessity the state of repair came within the rebus principle.
Mr Glover submitted that the transfer of the repairing obligation to the tenant under the 1988 Act inevitably meant that the state of repair must affect the tenant's bid. The 'physical state or condition" where referred to in Schedule 6 clearly included the state of repair.
He said that Mr Holgate had emphasised the phrase "shall be taken to be as they" are assumed to be in para 2(6) and was used in respect of all the items referred to in para 2(7). Mr Glover submitted that it was obvious from the nature of the matters to be considered that the assumption would rat on evidence, and there was no basis in the statutory provisions for making any assumption as to the physical state of the hereditament otherwise than on the basis of evidence
On analysis of Wexler v. Playle VO Mr Glover submitted that the case was not a justification for assuming in negotiation that the hereditament is in a fictitious state of repair. The case proceeded on the basis that the hereditament was offered by the landlord in its exiting state of repair; that the terms of the offer included acceptance by the landlord of the obligation to put and keep it in repair. On that basis the tenant would require the landlord to accept the obligation and would pay the market rental on the assumption that the landlord did fulfil the obligation. There was no justification in case law nor In statute for any other assumption.
In the present case, following the statutory transfer of the obligation to repair, the hypothetical negotiation required a different analysis, namely:
(a) the hereditament is in an existing state of poor repair and offered by the landlord in that state;
(b) the landlord does not offer to put or keep in repair, but offers a letting requiring the tenant to bear the obligation to repair, and
(c) the parties act reasonably
Upon that analysis the valuation officer conceded that the tenant would only offer £1. On the other hand Mr Holgate's analysis required the assumption that the landlord never offers to let the hereditament in its existing state of repair. This assumption contrasted sharply with the views expressed by all the judges in Wexler v. Playle VO;and in Saunders v. Maltby.
Accordingly he submitted that the statutory obligation imposed on the hypothetical landlord in the gross value cases was crucial to the decision.. The statutory obligation remained crucial, but it had now been transferred from the landlord to the tenant. Mr Glover referred also to:
Camden v. CAA [1979] RA 1 (LT) and
Snowman Ltd v McLean (VO) 251 EG 859
and pointed out that Myddleton v. Charles& Birchenwood Gas Ltd. v. Hampshire to which Mr Holgate had referred preceded Wexler v. Playle VO. The Birchenwood Gas case rested on a valuation by the contractor test. Neither case was authority against his submission.
As to the argument advanced by Mr Holgate on practicality, Mr Glover contended that if his analysis was correct, it was not for the Lands Tribunal to alter the law in the interest of convenience. But in any event the valuation officer's submission was over dramatic and his fears misplaced. For many years a valuation to NAV had required the valuer to have regard to the existing stale of a hereditament, and only in a minority of cases had the particular detailed state of repair had a material affect on rental value. The market was not as sensitive as had been suggested, and differential rates would apply only where the market would recognise marked differences of repair.. In the existing situation, the market reflected differences such as the presence or absence of central heating, but where nuances of repair had no effect on rents, there was no effect on rateable values. Where rental evidence demonstrated allowances for the state of repair, then the valuation officer was bound to make such allowances This was no different from what the Court of Appeal said had to be done in Saunders v. Maltby. The facts of Wexler v. Playle VO were wildly different because of the need to refer back to 1939 values
In reply, Mr Holgate said it was assumed, without conceding the point, that the word '"state" in para 2(7) of Schedule 6 included the state of repair of the hereditament. The same assumption was made by the Court of Appeal in Wexler. The effect of that assumption was only to take the starting point as 1 April 1990 instead of paying regard to the condition of the hereditament at 1 April 1988. As in Wexler, where the 1957 dilapidations could be assumed to exist in 1957 dilapidations in the present case the reasonable hypothetical landlord could be assumed to remedy wants of repair as at 1 April 1990.
The reasoning of the Court of Appeal in Wexler hinged on the phrase "might reasonably have been expected to let"; the same phrase was used in Schedule 6 para 2(1) and there was no material distinction between the 1953 Act and the 1988 Act which could assist the respondent. The insertion in the 1988 Act of the phrase "as they are assumed to be" only emphasised in the valuation officer's favour that assumptions may be made and one was not confined to consideration of the actual facts.
The principle derived from Saunders v. Maltby is that if the cost of repairs is out of all proportion to the value of the house, the landlord will not do them but instead will take a lower rent. He submitted that the reasoning in that case and in Wexler was not based on the liability of the landlord to comply with his repairing covenant, but with the steps which the reasonable hypothetical landlord will take before letting the premises Those steps taken or not taken in order to let the hereditament were unaffected by the transfer of repairing liability in the statutory hypothesis.
As to the rebus principle, Mr Holgate referred to the Robinson Bros case and submitted that in determining what is logically relevant to the valuation, account could only be taken of the intrinsic characteristics of the hereditament and not extrinsic qualities. In a valuation to gross value, Wexler and Saunders could only be correct on the basis that economically remedial disrepair is not an intrinsic characteristic. The provisions of subpara (5)-(7) in Schedule 6 did not provide a complete definition of the rebus principle. Otherwise, for example, account would have to be taken of decorative condition.
Mr Holgate accepted that Wexler and Saunders both remained good law. It remained necessary to distinguish between extrinsic and intrinsic factors. Where the state of repair is so bad that it is not worth the landlord's while to remedy it in order to let, then that is "intrinsic". The hereditament is "branded" as Lord Pearce put it in Dawkins v. Ash, and in that condition the tenant will pay the lower rent. That distinction between extrinsic and intrinsic factors was rational if the disregard of want of repair is confined to the situation prior to the hypothetical letting. Thus it was immaterial whether the burden of repair fell on the landlord or on the tenant. The landlord skill would obtain the higher rental bid by carrying out repairs before letting.
There was a requirement of uniformity between ratepayers. This requirement was best served by disregard of ordinary want of repair. In the real world disrepair was cyclical. To relate disrepair to value was arbitrary and fixed in tune. There may be a need to consider evidence of repair un some extreme case, but the respondent's argument would require an arbitrary assessment to be made in all cases. If there was any ambiguity it was right to look at the practical consequences.
Decision
This appeal concerns a vacant office block in Brighton but the decision may be of widespread significance in valuation for rating. It is agreed that at the material date for valuation purposes in September 1990, the building was vacant and in disrepair. The parties are not agreed as to the extent of disrepair, nor as to what would be required to put the building in good repair nor as to the costs of any necessary works. Furthermore, although reference was made in the course of argument to a distinction between "ordinary want of repair" and "structural defects", there are no facts agreed or proved as to whether the state of the building is a consequence of ordinary disrepair or structural defects or indeed both.
It is against that background that I approach the question of law which the parties themselves formulated for preliminary decision. If the property is to be valued as it physically existed on the material date, taking account of the disrepair then existing, the appellant valuation officer concedes that the rateable value is nominal. If on the other hand, it is to be assumed that existing disrepair would be remedied by the hypothetical landlord prior to the material date, then there remain the questions:
(a) whether the disrepair was "ordinary want of repair" or defects of a structural nature; and
(b) whether it was economically reasonable for the landlord to put the building in repair in order to let it at a more than nominal rent.
It seems to me that the basic question in this case may be posed thus: whether the decisions of the Court of Appeal in Wexler v. Playle VO (1960) and Saunders v. Maltby (1976), both of which cases concerned hereditaments which required to be assessed to gross value, i.e. on the assumption that the hypothetical landlord bore the burden of repairs, are affected by the transfer of the assumed repairing liability to the tenant under the 1988 Act?
Wexler v. Playle VO [1960] 1 QB 217 concerned a flat which required to be valued to gross value under the Valuation for Rating Act 1953, which involved a reference back to the rent "which might reasonably have been expected" in June 1939. Saunders v. Maltby [1976] 109 was concerned a dilapidated house to be assessed to gross value under the General Rate Act 1967 and was a case in which the Court of Appeal explained and applied Wexler v. Playle VO.
Mr Holgate subjected the judgments in these cases to a detailed and subtle analysis, but I am in no doubt as to what they decided. The principle is perhaps most plainly expressed in Wexler v. Playle VOby Morris LJ at page 235:
"I think we must bear in mind the opening words of subsection 2 "the said rent is that as which the hereditament in question might reasonably have been expected ...to let . There is therefore introduced what might be expected and what might reasonably be expected .... It seems to me that the section is contemplating that the landlord will do repairs, ant it must be remembered that if a landlord is to maintain premises in or to keep premises in repair, he has the obligation to put premises in repair. So it seems to me, if one postulates that a hypothetical landlord and a hypothetical tenant went into a flat which had the defects so which I have referred .. and if we are considering what might reasonably have been expected by way of rent. I would say that it would be such rent as would be payable on the basis that the landlord would then do the necessary repairs to make the flat reasonably habitable and would do such later repairs as would be reasonable in all the circumstances."
The same principle is referred to by Willmer LJ at page 239:
"For my part I should have thought it is clear that subsection 2 is to be construed on the basis of what normally does happen in everyday life. I infer that from the incorporation of the word "reasonably'' at the beginning of subsection 2. The: subsection speaks of the rent which might reasonably have been expected. That imports the notion of a reasonable landlord and a reasonable tenant, behaving reasonably and making a reasonable a arrangement If that is the right approach, then I entirely agree ... that one would expect a reasonable landlord and a reasonable tenant when contracting for a tenancy if it appeared that there were readily remediable defects such as those we have in this case, to proceed on the basis that the landlord's covenant to repair would include an obligation not only to keep the premises in repair but to put the premises in repair. That seems to me the common sense application of the subsection"
In Saunders v. Maltby, the case was remitted to the Lands Tribunal to consider whether the extent of the dilapidation was such that it would be uneconomic for the hypothetical reasonable landlord to carry out repairs It was explained that the obligation on the landlord which had been discussed in Wexler v. Playle VO was not an absolute obligation to put the premises in repair regardless of the relationship between the cost of repair and the rental value of the premises. Goff LJ said a: [1976] RA 114
"In my judgement the hypothetical landlord is one who undertakes some liability to do repairs and that imports an obligation to put the premises into such a state as accords with the ambit of his liability to do repairs. In my judgement however it is not an unqualified liability to do all repairs. The question is what is the extent of the obligation which ought to be imputed to the hypothetical landlord? ... when I look at the decision (of the Lands Tribunal) it seems to me with respect ... plain that the member has misdirected himself because he has treated the liability to repair as being unqualified and requiring the hypothetical landlord to repair everything capable of being repaired ... I agree ... that the matter should be remitted for the member to reconsider the position and to consider what extent of liability to repair it would be economically reasonable to attribute to the hypothetical landlord in all the circumstances of this case.. .".
Mr Holgate has submitted that the ratio decidendi in both these cases did not depend on the fact that the hereditament was to be valued on a gross value basis but on the basis that a hypothetical landlord acting reasonably would carry out necessary repairs to the extent that such repairs were economically reasonable or sensible, prior to commencement of the tenancy in order to secure a reasonable rent. In the light of the judgments I have just referred to. I am unable to accept that submission. As it seems to me, all the judgements in the two eases proceeded from a starting point that the statute required the assumption to be made shat the hypothetical landlord undertook to bear the cost of repairs, including the cost of putting the premises in reasonable repair.
The same starting point, i.e. the statutory assumption that the cost of repairs is to be borne by the landlord appears to me to underlie the decision of the Lands Tribunal in the later case of CAA v. Langford (VO) and Camden Borough Council [1979] RA 1 ( the Space House case). This is apparent from the decision of Mr J H Emlyn Jones FRICS at page 26. Similarly this is clearly the basis for the judgement of the Court of Appeal dismissing an appeal from Mr Emlyn Jones' decision. See [1980] RA 369, and in particular the judgement of Everleigh LJ, who in reference to the statutory formula in section 19 of the General Rate Act 1967 said at page 378
"... That section requires assessment to be made on the basis that the landlord is responsible for repairs, and it is assumed that he will do them and that the tenant will be content to pay the rent that the premises will in consequence command. Therefore the fact that repair will be required will not affect the assessment so as to produce a lower rent. See Wexler v. Playle VO"
What, then, is the consequence of the "transfer" of repairing obligations, effected by the 1988 Act? Para 2(1) of Schedule 6 now provides that the rateable value of a non-domestic hereditament shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to lee from year to year "If the tenant undertook to pay all usual tenant's rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command that rent".
Mr Holgate's submission in short is that the principle expressed in Wexler and in Saunders remains intact, that it is to be assumed that such repairs as are economically reasonable will be carried out prior to the hypothetical letting. Mr Glover contends that the transfer of the repairs burden to the tenant produces the need for a different analysis. The rebus sic stantibus rule requires the hereditament to be valued in its existing state, as he put it "warts and all". The hereditament is in an existing state of poor repair. The landlord is not assumed to offer to put it In good repair or keep it in repair, but is assumed to offer a letting imposing on the tenant the obligation to put and keep it in repair. In that situation with the parties acting reasonably, the poor state of repair would inevitably affect the tenant's rental bid. In this particular case, the valuation officer concedes that if that analysis is correct, a deal would be struck at a nominal £1.
Mr Glover illustrated the point by referring to the Tribunal's decision in Snowman Ltd v McLean (VO) 251 EG 859, a case of a factory which by virtue of section 19(3) of the General Rate Act 1967 fell so be assessed direct to NAV, i.e. assuming the tenant to bear the cost of repairs etc The member (Mr Eric Strathon FRICS) said in the course of his judgement (p861):
".... The hypothetical tenant who sees the defects, including the floor in a state of heave, would have no doubt that in making his bid of rent he should allow for repairs above the normal cost of repairs in factories without defects . . these are matters which the hypothetical tenant would consider when measuring his bid of rent against the known level of rents of factories which are not so affected by physical defects.".
In my judgement, Mr Glover's submission is correct. I can find no justification in the present statutory provisions for the assumption that a landlord will put premises into repair before negotiating the hypothetical tenancy which is the current basis of valuation. Mr Holgate suggests that the justification ties in the phrase "might reasonably be expected to let ..." with emphasis on the word reasonably. With respect, that seems to me to extend the meaning of the word "reasonably" to an unreasonable degree, and to add an implied hypothesis to the clearly expressed hypothesis in para 2(1).
Nor do I find justification for the assumption that the landlord will carry out repairs prior to letting in the authorities to which I have been referred. As l indicated earlier; in my opinion the decisions in Wexler v. Playle VO and Saunders v. Maltby rested fairly and squarely on the statutory assumption then in force in respect of dwelling houses, that the obligation to repair fell on the landlord.
AS it appears to me therefore, the rebus sic stantibus rule requires that if the existing state of repair is such as to affect the rental value of the hereditament to the hypothetical tenant on whom the repairing obligation will fall, then that effect is to be taken into account.
Mr Holgate resists this conclusion by inviting consideration of the practical consequences The advantage of assuming that all economically reasonable repairs have been carried out prior to the hypothetical letting is to ensure a high degree of uniformity and ease of valuation. To take account of the actual state of repair of each hereditament would impose a huge burden on valuers, and a burden which in his submission Parliament never intended to impose
In response Mr Glover said in effect that it was not for the Tribunal to alter the law in the interests of administrative convenience, and that In any event the fears expressed by the valuation officer were exaggerated and far-fetched.
I agree with Mr Glover. It is necessary to recall the oft-quoted judgement of Scott LJ in Robinson Bros v. Houghton and Chester Le Street Assessment Committee [1937] 2 KB 445, in which he set out the basic propositions at page 468. So far as relevant to the present case, they are:
"`(1) The hereditament to be valued .... is always the actual house or other property for the occupation of which the occupier is to be rated, and the hereditament is to be valued is it in fact as it is - rebus sic stantibus.
and (5) in weighing up the evidence bearing upon value, it is the duty of the valuer to take into consideration every intrinsic quality and every intrinsic circumstance which tends to push the rental value either up or down . .."
To these basic propositions, which lie at the heart of valuation for rating, must be added the statutory assumptions as to the nature of the hypothetical tenancy now contained in Schedule 6 of the 1988 Act, including the tenant's obligation to repair imposed by para 2(1) and the further assumption to be made under para 7 as to the physical state of the hereditament, the mode of occupation, the physical state of the locality, etc.
Taking all these relevant factors into account leads to the inevitable: conclusion in my judgement, that the hereditament must be valued as it exists on the material date, including such want of repair as affects its rental value. If that valuation is difficult and inconvenient to make, that is a matter for the legislative and not for this Tribunal.
However, I also agree with Mr Glover that the huge burden which this construction is said to impose Is more apparent than real. The present law of rating requires all non-domestic hereditaments to be separately and individually assessed. although there are various proposals for reform presently in the air. In practice, of course, there are large numbers of similar hereditament for which an average level of rental value can be established. Perhaps the most obvious example is the zoning method is invariably adopted for the rating valuation of shops in a town centre. If the shops are identical, then subject to possible locational differences, they will bear a similar value. Nevertheless, it is commonplace in this situation for the valuers to recognise individual differences insofar as they affect value, for example an inconvenient shape, the presence or absence of a return frontage, the presence or absence of a loading bay, or of air-conditioning etc. It does not seem to me that disrepair would present any greater difficulty. Minor defects, such as cracked windows or stained wallpaper, seem unlikely to affect a rental bid. whereas a serious state of disrepair may well do so.
In this context. I beat in mind that Mr Emlyn Jones in the course of his decision in the Space House case - see [1979] RA 1 page 24 said :-
" . . What happens in everyday life? The carrying out of repairs would normally be done by a landlord before a tenant went into occupation so at the time when the premises become occupied it is to be assumed that the repairs have been done. The same principle has been applied by the Lands Tribunal in a number of cases but I think it is right to say that they have all been concerned with dwelling houses If such repairs were not assumed to have been done, and valuations were made taking into account the actual state of repair, then the situation would arise where the gross value of properties would fluctuate from year as the state of repair got worse or was put right; and this in practice would lead to insuperable difficulties. So the principle is that a constant state of reasonable repair is to be assumed.'.
As previously discussed however, this was a case in which the actual assessment was to gross value, and Mr Emlyn Jones' remarks were specifically directed to dwelling houses requiring the same assumptions as to repairing obligations.
I bear in mind also that in the course of argument in Wexler v. Playle VO Harman LJ is recorded as asking (page 225) "... a ratepayer could steal a march on his fellow ratepayers by having his property in a bad state of repair at the time of valuation. If my view of the law is correct, it may well follow that two otherwise identical hereditaments will bear different rateable values according to their state of repair. This may cause difficulty for the valuer, but I do not regard it as necessarily "stealing a march". The valuation is of course confined to non domestic property, and if an occupier chooses to carry on business in premises so decrepit as to affect the rental value, he may properly be compensated for the discomfort of his occupation by a reduction in rateable value.
For these reasons, I conclude that the preliminary issue must be decided in favour of the respondent ratepayer, although I would qualify the declaration which is sought, to read as follows:
"It is to be assumed for the purposes of para 2(1) of Schedule 6 of the Local Government Finance Act 1988 that the hereditament should be valued as it physically was on the material date, taking into account any disrepair then existing, so far only as such disrepair affected the rental value of the hereditament".
In view of the conclusion made on behalf of the appellant valuation officer as recorder above in paragraph 7 of the agreed facts, it appears to me that this decision on the preliminary issue effectively disposes of the appeal. In accordance with Rule 43(2) of the Lands Tribunal Rules 1996 I therefore order that the preliminary hearing be treated as the hearing of the appeal. The appeal shall be dismissed and the entry in the Valuation List affirmed as "Offices, Premises and car park RV £11,751".
This decision determines the substantive issues raised between the parties, and the Tribunals award is final. The parties are invited to make such submissions as they are advised as to the costs of the hearing, and a letter accompanies this decision as to the procedure for submissions in writing The Tribunal will, in due course, incorporate an order as to costs in an addendum to this decision. Rights of appeal under section 3(4) of the Lands Tribunal Act 1949 and Rules of the Supreme Court Order 61 will not accrue until the decision has been thus completed
PRINCIPLES OF RATEABLE OCCUPATION
PROTOCOL FOR RESOLUTION OF DISPUTES ABOUT OCCUPATION OF PREMISES