Distress for rates–Appeal from Divisional Court–Preliminary question as to Court of Appeal’s jurisdiction–Jurisdiction accepted–Not a ‘criminal cause or matter’–Doubt set at rest–Substance of appeal whether it is a defence to application for distress warrant that ratepayer was in occupation of part only of hereditament–Correct principle is that distress warrant should not be issued if description in valuation list cannot be satisfied without inclusion of property which person rated does not occupy–Cases reviewed–Appeal from Divisional Court allowed
This was an
appeal from a decision of the Queen’s Bench Divisional Court allowing an appeal
from Hampstead magistrates, who had refused to authorise the issue of a
distress warrant on a complaint laid by Camden Borough Council against the
present appellant, Mr Theodore Herwald. The case concerned the non-payment of
the general rate in respect of premises at 63 Loveridge Road, London NW6. The
Divisional Court had remitted the case to the justices with a direction to
authorise the issue of the warrant.
Sir Peter
Rawlinson QC MP and Desmond Keane (instructed by Walford & Co) appeared on
behalf of the appellant; Guy Roots (instructed by Francis Nickson, Camden
Borough Council) represented the respondent authority.
Giving the
judgment of the court at the invitation of Megaw LJ, BROWNE LJ said: This is an
appeal by Mr Herwald from a decision of the Divisional Court of the Queen’s
Bench Division given on April 8 1976 and reported in [1977] 1 WLR 100. The
Divisional Court allowed an appeal by way of case stated from a decision of the
Hampstead Magistrates’ Court and refused leave to appeal, but leave was given
by this court on March 28 1977.
The case
relates to distress for rates. On March 13 1975 the Camden Borough Council laid
a complaint in the magistrates’ court against Mr Herwald for a summons for
nonpayment of the general rate in respect of premises at 63 Loveridge Road,
London NW6, for the period from October 1 1972 to March 31 1975, amounting to a
total of £1,019.80. On May 1 1975, the magistrates heard the complaint and
refused to authorise issue of a distress warrant. The Divisional Court, having
allowed the appeal, remitted the case to the justices with a direction to
authorise the issue of a distress warrant.
When the
appeal came on in this court, the court raised the question whether we had
jurisdiction to hear it, in view of the decision of this court (consisting of
Lord Esher MR, Kay LJ and A L Smith LJ) in Seaman v Burley [1896]
2 QB 344. It was held in that case that there was no appeal to this court from
a decision of a Divisional Court on a case stated by justices relating to the
grant of a distress warrant to enforce a poor rate under a local Act, because
it was an appeal in a ‘criminal cause or matter’ within section 47 of the
Judicature Act 1873, inasmuch as the proceedings before the magistrates might
end in imprisonment (see now section 31 (1)(a) of the Supreme Court of
Judicature (Consolidation) Act 1925 and section 1 (1) (a) of the Administration
of Justice Act 1960). Sir Peter Rawlinson, for Mr Herwald, wished us to deal
with the case; and Mr Roots for the Camden Borough Council did not take any
objection to our jurisdiction, and indeed advanced a helpful argument in
support of it.
The statutory
provisions as to distress for the general rate are now contained in Part VI of
the General Rate Act 1967, beginning with section 96 (1).
Section 96 (1)
provides that
. . . 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, subject to and in accordance with the provisions of this Part of
this Act, be enforced by distress and sale of his goods and chattels under
warrant issued by a magistrates’ court; and, if there is insufficient distress,
he may be liable to imprisonment under the provisions of this Part of this Act
in that behalf.
Section 97
(1):
The
proceedings for the issue of a warrant of distress under this Part of this Act
may be instituted by making complaint before
the complaint to appear before a magistrates’ court to show why he has not paid
the rate specified in the complaint.
Section 98:
The justices may
state a case under the Magistrates’ Courts Act 1952 when called upon to issue a
warrant of distress under this Part of this Act.
Section 99
(1):
A warrant of
distress under this Part of this Act may be directed to the rating authority,
to the constables of the police area in which the warrant is issued and to such
other persons, if any, as the magistrates’ court issuing the warrant may think
fit, and the warrant shall authorise the persons to whom it is directed to levy
the amount which the person against whom the warrant is issued is liable to pay
by distress and sale of his goods and chattels.
Section 102
(1):
If the person
charged with the execution of a warrant of distress for levying a sum to which
some other person has been rated makes a return to the magistrates’ court that
he could find no goods or chattels (or no sufficient goods or chattels) on
which to levy the sums directed to be levied under the warrant on that other
person’s goods and chattels, a magistrates’ court may, if it thinks fit, and
subject to the provisions of section 103 of this Act, issue a warrant of
commitment against that other person.
Section 102
(5):
The order in
the warrant of commitment shall be that the said person be imprisoned for a
time therein specified but not exceeding three months, unless the sums
mentioned in the warrant shall be sooner paid. . . .
and the
sub-section goes on to provide for a remission of the term of imprisonment
proportionate to the amount of any later payment.
Section 103
(1):
Section 102
of this Act shall have effect subject to and in accordance with the following
provisions: (a) on the application for the issue of a warrant for the
commitment of any person, the magistrates’ court shall make inquiry in his
presence as to whether his failure to pay the sum to which he was rated and in
respect of which the warrant of distress was issued was due either to his wilful
refusal or to his culpable neglect; (b) if the magistrates’ court is of opinion
that the failure of the said person to pay the said sum was not due either to
his wilful refusal or to his culpable neglect, it shall not issue the warrant.
Section 103 (2):
Where on the
application no warrant of commitment is issued, the magistrates’ court may
remit the payment of any sum to which the application relates, or of any part
of that sum.
Seaman v Burley was decided on the provisions of a local Act
relating to the parish of Paddington (5 George IV, cap cxx (vi). Section cxx of
that Act contained provisions generally corresponding with those of Part VI of
the 1967 Act, with one important exception: it contained no provision
corresponding to section 103.
In Ryde on
Rating, 13 ed p 878, the authority of Seaman v Burley in the
present context is doubted. In two later cases this court has heard and decided
appeals from the Divisional Court relating to distress for rates, though it
does not appear that in either of them Seaman v Burley was cited
or any point taken as to jurisdiction (see Associated Cinema Properties Ltd
v Hampstead Borough Council [1944] 1 KB 412 and Bexley Congregational
Church Treasurer v Bexley London Borough Council [1972] 2 QB 222). In
Re McGreavy [1950] Ch 269 this court disagreed with what it regarded as an obiter
dictum of Lord Esher in Seaman’s case (see p 279-280), and in China
v Harrow UDC [1954] 1 QB 178 the Divisional Court (we think) impliedly
distinguished Seaman, which was cited in argument. But we do not think
we need refer further to those cases, because two years after Seaman v Burley
was decided it was distinguished by this court on a ground which in our
judgment equally distinguishes it from the present case. In Southwark and
Vauxhall Water Co v The Hampton UDC [1899] 1 QB 273 it was held that
an application to a court of summary jurisdiction for an order to enforce a
general district rate under the Public Health Act 1875 was not a ‘criminal
cause or matter’ and that an appeal lay to this court from a decision of the
Divisional Court on a case stated. The leading judgment was given by A L Smith
LJ, who had been a party to the decision in Seaman v Burley, and
Rigby LJ and Collins LJ concurred. The ground on which Seaman’s case was
distinguished was that in that case the Summary Jurisdiction Act 1879 did not
apply but in the Southwark and Vauxhall Water Co case it did. The 1879
Act contained provisions in section 35 the effect of which was, in our view,
substantially the same as the effect of the provisions of section 103 (1) of
the 1967 Act, and it was held that the proceedings were therefore not a
‘criminal cause or matter.’ The
proceedings in the present case are, therefore, in our view, equally not a
‘criminal cause or matter.’ This distinction
also avoids the startling conclusion that every judgment summons in a county
court under Order 25 rule 33 of the County Court Rules and section 5 of the
Debtors Act 1869 is a ‘criminal cause or matter.’ In our judgment, this court has jurisdiction
to hear this appeal. We hope that our decision will end the uncertainty
referred to in Ryde.
We come,
therefore, to the substance of the appeal. It is well established that an
application for a distress warrant to enforce payment of rates can only be resisted
on certain limited grounds. It is also well established that one of such
grounds is that the defendant is not in occupation of the hereditament in
respect of which it is sought to rate him. The question in this case is
whether, and if so in what circumstances, it is a defence for him to show that
he is only in occupation of part of that hereditament.
The case
stated, having found that the relevant rates were made, published and demanded,
finds the following facts:
Paragraph
4(ii):
That the
valuation list shows 63 Loveridge Road as a single hereditament as a workshop
and store.
Subparagraph
(iii):
That Mr
Stephenson, rates inspector, London Borough of Camden, visited 63 Loveridge
Road on several occasions, the first time being on March 11 1974.
Subparagraph
(iv):
That Mr
Herwald had been a subtenant of a Mr Jellineck from 1960 until six or seven
years ago and then of a Miss Marcotics to whom he had paid a portion of the
total rent and rates.
Subparagraph
(v):
That during
Miss Marcotics’ lifetime he had occupied certain parts only of 63 Loveridge
Road, namely an office on the first floor of the house, with use of the
kitchen, and area marked ‘Factory A’ (see attached rough sketch plan), and that
subsequent to her death he continued to occupy the same parts of the premises
as he had always occupied.
The sketch
plan attached to the case and the legend on it show that 63 Loveridge Road
comprises a house of three floors consisting of a shop and office on the ground
floor, four rooms on the first floor (including a kitchen) and four rooms on
the second floor; a one-storey factory (Factory A); a two-storey factory
(Factory B); and two yards separating the buildings. The case contains no
findings about the use made by Mr Herwald of the parts which he occupies, nor
as to the use or occupation (if any) of the other parts. Sir Peter Rawlinson
emphasised that the effect of the findings was that during the lifetime of Miss
Marcotics Mr Herwald only paid (to her) the rates in respect of the parts he
occupied; that after her death he continued to occupy the ‘same parts of the
premises as he had always occupied’; and that he was now being called upon by
the rating authority to pay the rates on the whole.
The conclusion
of the justices and their question to the court were as follows:
Paragraph 5:
We were of
opinion that as Mr Herwald, the respondent, had at all times occupied only
certain parts of 63 Loveridge Road, he would not be liable for the rates for
the whole premises and accordingly refuse to authorise issue of a distress
warrant.
Question: The question for the opinion of the High Court is whether it is
correct that Mr Herwald is liable only for rates in respect of that part of the
property in which he has been found to be in sole occupation when that part of
the property is contained in the valuation list only as part of a single
hereditament.
In view of
some criticisms of the Camden Borough Council which were made or implied during
the argument and of the finding in paragraph 4 (iii) of the case stated, we
think we should emphasise the division of responsibilities in rating matters
which is now embodied in the General Rate Act 1967. We think this division of
responsibilities and procedures is also important in relation to the substance
of this case. Mr Roots gave us an interesting and helpful summary of the
history of the development of rating procedure from the Poor Relief Act 1601 to
the Lands Tribunal Act 1949. The scheme of the 1967 Act (re-enacting earlier
legislation) is a division between responsibility for assessment or valuation
and responsibility for collection. Valuation is the responsibility of valuation
officers appointed by the Inland Revenue and collection is the responsibility
of the rating authorities. The provisions as to valuation lists and the duties
of valuation officers are contained in Part V of the Act. It is the duty of
valuation officers to prepare a valuation list for each rating area (section 67
(1)) and to insert in the list the prescribed particulars ‘with respect to
every hereditament in the rating area and the value thereof’ (section 67 (2)).
By section 67 (6) the valuation list is made ‘conclusive evidence for the
purposes of the levying of [the] rate of the value of the several hereditaments
included in the list.’ It is not made
conclusive evidence of anything else, but it is obvious that before making a
valuation of any hereditament the valuation officer must decide what the
hereditament is which he is valuing. The identification of hereditaments is an
essential part of the process of valuation and so within the province of the
valuation officer (see the definition of ‘hereditament’ in section 115 (1) of
the Act). Section 69 and the following sections contain provisions for the
alteration of the valuation list by means of proposals and for appeals to local
valuation courts and to the Lands Tribunal if there are objections to a
proposal. If the occupier of part of premises included in the list as a single
hereditament thinks that his part should be shown as a separate hereditament,
he can and should make a proposal for the alteration of the list under section
69 (1) (a) or (c) or both. We were told that since the hearing in the
Divisional Court this has been done and that 63 Loveridge Road is now shown in
the list as two hereditaments. When a proposal takes effect, its effect relates
back to the beginning of the rating period in which it was made (section 79),
but the rates claimed in this case are in respect of earlier periods.
Collection of the rate is the responsibility of the rating authorities. They
have nothing to do with assessment or valuation nor with the identification or
definition of hereditaments. We think that this is emphasised by their duty
under section 85 (1), which is only to give information to the valuation
officer. By section 2 rating authorities are under a mandatory duty to make and
levy the general rate, and by section 2 (4) (b) the general rate ‘shall be made
and levied in accordance with the valuation list in force for the time being. .
. .’ So long as the entry in the
valuation list remained unaltered, it was therefore the duty of the Camden
Borough Council to levy the rates in respect of 63 Loveridge Road in accordance
with the list. The rating authority had no power to split up the hereditament
or apportion the rates. We agree with the Divisional Court that Mr Herwald’s
proper remedy was to make a proposal for the alteration of the list (see [1977]
1 WLR at p 104 (B-C)).
But this is
not the end of the matter. The foundation of Sir Peter Rawlinson’s argument was
the incontrovertible proposition that liability to pay rates depends on the
occupation of land (or certain other types of hereditament); a person is liable
to be rated in respect of his occupation of land. He referred us to section 16
of the 1967 Act, to Allchurch v Hendon Union Assessment Committee
[1891] 2 QB 436, and to Westminster City Council v Southern Railway
Co Ltd [1936] AC 511, especially Lord Russell of Killowen at p 529. He
submitted that: (a) Mr Herwald is not liable to be rated in respect of land of
which he is not in occupation; (b) on the findings of fact he was not in
occupation of part of this hereditament; (c) no rate can lawfully be levied in
respect of the part of which he is not in occupation; (d) therefore, no
distress warrant can lawfully be issued for rates which include rates on the
part he does not occupy.
As we have
said, there is no doubt that on an application for a distress warrant it is a
defence for the defendant to show that he is not in occupation of the
hereditament at all (see, for example, Associated Cinema Properties Ltd
v Hampstead Borough Council [1944] KB 412). But where the defence is
that the defendant is only in occupation of part of the hereditament the
position is different. The rating authority relied on the decision of the
Divisional Court in Manchester Overseers v Headlam (1888) 21 QBD
96, and the Divisional Court in the present case accepted their submission and
directed the distress warrant to issue. If we may respectfully say so, we think
that the effect of that decision was stated with complete accuracy in the
judgment of Robert Goff J, with which the Lord Chief Justice and O’Connor J
agreed. I quote from [1977] 1 WLR begining at p 102 (H):
It is right
that a person is only liable to be rated in respect of property of which he is
the occupier: see section 16 of the General Rate Act 1967. But it does not
follow that, merely because he can show that he does not in fact occupy part of
premises in respect of which a rate has been made, a distress warrant should
not be issued. To resist the issue of a warrant, he must show that the
description of the rated property in the valuation list includes on its face
property which he does not occupy. The principle was stated by this court in Overseers
of the Poor of Manchester v Headlam and London and North Western Railway
Co (1888) 21 QBD 96, at p 98 in a passage which has since been frequently
cited and applied: ‘. . . if one entire assessment be made in terms upon
property which he does occupy, and upon other property which he does not
occupy, so that upon the true state of facts being ascertained it is impossible
to satisfy the description in the rate book without including property which he
does not occupy, the rate will be bad and ought not to be enforced.’
That is the
end of the quotation from Headlam. Robert Goff J goes on:
In that case,
property occupied by the railway company had been assessed as ‘offices and land
with rails,’ but in assessing the amount of the rate the overseers had included
certain buildings which were not occupied by the company. It was held that,
since the property in fact occupied by the company satisfied the description in
the rate book, the rate was good on the face of it and a distress warrant must
be issued. The proper remedy of the company in such circumstances was to appeal
against the assessment; not having appealed, they could not resist the issue of
a warrant. By way of contrast, in Langford v Cole (1910) 102 LT
808, where a single assessment of poor rate was made on property described in
the rate book as ‘mansion house and grounds’ and it was established that the
mansion house itself was unoccupied at the date when the rate was made, it was
held that the rate made in respect of the whole property could not be enforced
and that a distress warrant should not therefore be issued.
The position
is therefore as follows. If the person rated is in occupation of premises which
fulfil the description in the valuation list, that is sufficient for the issue
of a warrant: but if the description in the valuation list cannot be satisfied
without includ-
enforced against him and a distress warrant should not be issued.
Applying that
test, the Divisional Court held that the part occupied by Mr Herwald did fulfil
the description in the valuation list and that non-occupation of even a
substantial part did not prevent him from being liable for the rate in respect
of the whole: accordingly, he could not resist the issue of a distress warrant
(see p 104 (A-C)).
Sir Peter
Rawlinson submitted (i) that we should overrule Headlam and the later
cases which have followed and applied it; (ii) alternatively, that Headlam
should not be rigidly applied to all cases but only to ‘trivial matters,’ (iii)
in the further alternative, that even if the principle of Headlam should
be applied, the Divisional Court was wrong in holding that the part occupied by
Mr Herwald fulfilled the description in the valuation list.
As to (i), Sir
Peter submitted that the decision in Headlam was inconsistent with the
fundamental principle that liability to be rated depends on the occupation of
land and with the decision of the Court of Appeal three years later in Allchurch
v Hendon Union Assessment Committee. Headlam is not binding on
us, and Mr Roots did not feel able to submit that the decision of the Exchequer
Chamber in Crease v Sawle (1842) 2 QB 862 was binding upon us
because of later changes in procedure. But Headlam has stood for 90
years, and was followed and applied in at least the three later cases referred
to in the judgment of the Divisional Court, in 1910, 1922 and 1956: we should
therefore be very slow to overrule it. But, in our judgment, it is not
inconsistent with the general principle on which Sir Peter relies. We agree
with Mr Roots that the question in this case relates to procedure and
jurisdiction rather than to liability; so it did in Headlam, where the
proper remedy would have been to appeal against the rate. Allchurch v Hendon
Union Assessment Committee is not, in our view, inconsistent with Headlam,
because Allchurch related to the assessment process (under the procedure
then applicable) and not to the collection process; it was concerned with the
process now governed by Part V of the 1967 Act. On an application for a
distress warrant the magistrates have no jurisdiction to alter the valuation
list or to apportion the rates on any such basis. It does not appear to have
been suggested in any of the later cases in which Headlam has been
applied that there was anything in Allchurch which threw any doubt on
it. We therefore reject Sir Peter’s first submission as to Headlam. Nor
can we see any reason to limit that decision to ‘trivial matters.’ No such suggestion seems to have been made in
any of the later cases.
But we accept
Sir Peter’s third submission that, applying the principle of Headlam,
these rates cannot be enforced against Mr Herwald. The description in the
valuation list at the relevant times was ‘a workshop and store.’ ‘Factory A,’ which he occupies, can fairly be
described as a ‘workshop,’ but on the findings of fact he does not occupy
anything which can be described as ‘store.’
Further, he does occupy the office in the house, which is not covered by
the description in the list. We doubt whether we are entitled to take into
account the later alteration in the list, but it is interesting to note that we
were told that 63 Loveridge Road is now entered as two hereditaments, the part
occupied by Mr Herwald described as ‘Factory and Office’ and the rest as
‘Stores and premises–void.’ We do not
find any help in the case on which the Divisional Court relied–Vernon v Castle
(1922) 127 LT 748; it seems to us that each case must depend on its own facts
and on the construction of the particular entry in the list.
The appeal
will therefore be allowed. The question stated in the case is not the right
question; on our decision, the position is not that Mr Herwald is liable only
for rates in respect of the part of the property which he occupied, but that he
is not liable for any part of the rates claimed. The actual decision of the
magistrates in refusing to authorise issue of a distress warrant was, however,
right.
The appeal
was allowed with costs in the Court of Appeal and below. Legal aid taxation
ordered, the appellant being legally aided.
