Respondent owner of unoccupied non-domestic property – Non-payment of rates – Justices finding premises exempt from liability to pay as a “qualifying industrial hereditament” – Appellants appealing – Whether justices misdirected in law – Regulations 2(2)(f) and 2(5)(b)(ii) of Non Domestic Rating and Valuation Regulation (Unoccupied Property) Regulations 1989 – Appeal dismissed
Bellway Homes Ltd (the respondent) owned the former sorting office in Borough High Street, London. It acquired the premises after they ceased to be used by the Post Office. The appellants, as billing authority for the London Borough of Southwark, brought proceedings against the respondent for non-payment of sums owed under the Non Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1990. The respondent claimed relief from collection of unoccupied rates by virtue of section 45 of the Local Government Finance Act 1988 and Regulation 2(2)(f) of the Non Domestic Rating and Valuation Regulation (Unoccupied Property) Regulations 1989. The justices found that the property was exempt because it was a “qualifying industrial hereditament” within the meaning of Regulation 2(2)(f) of the 1989 Regulations.
Regulation 2(5)(b) defined the term “qualifying industrial hereditament” as “any hereditament other than a retail hereditament in relation to which all buildings comprised in the hereditament are… (ii) constructed or adapted for one or more of the following purposes… (a) the manufacture, repair or adaptation of goods or materials, or the subjection of goods or materials to any process; (b) storage (including the storage or handling of goods in the course of their distribution)”.
The appellants challenged the justices’ decision by way of case stated. The issue was whether the activities carried on at the property while it was a sorting office fell within Regulation 2(5)(b)(ii). The appellants submitted that the activities failed to satisfy the criteria in either Regulation 2(5)(b)(ii)(a) or (b) because: (i) mail could not properly be said to be “goods”; (ii) the sorting and franking of such mail could not properly be said to have been the “subjection of goods or materials to any process”; and (iii) the presence of mail at the premises could not properly have been described as “storage”. The Post Office, as former owner of the premises, appeared as an interested party.
Held: The appeal was dismissed.
(1) The wording of Regulation 2(5) was widely drawn and it offended the law of interpretation to give it a narrower meaning. It was absurd to have an article, for example a magazine, that changed in nature and ceased to become “goods” when dealt with at the post office but which became “goods” again once delivered to a household. “Goods”, therefore, do include mail.
(2) Regulations 2(5)(b)(ii)(a) and (b) had to be read together. On the facts found by the justices, packages were franked, divided into geographical area and contained. All that amounted to the subjection of goods to a process.
(3) It was difficult to say, as far as letters were concerned, that they were “stored”, but the word “storage” did not stand alone. Whatever else the post office did, they handled goods in the course of distribution, either mechanically or manually.
Guy Roots QC and Richard Wald (instructed by the solicitor to the Southwark London Borough Council) appeared for the appellants; David Mole QC (instructed by JP Scrafton) appeared for the respondent; Martin Edwards (instructed by the solicitor to the Post Office) appeared for the interested party.
Sarah Addenbrooke, barrister
