Rates–Unoccupied hereditaments–General Rate Act 1967, Schedule 1, para 2(a) and (b)–Appeal by ratepayer company from decision of Court of Appeal allowing an appeal from a decision of Woolf J (as he then was) in favour of the company–Appellants claimed that the effect of planning conditions making the use of the premises for offices a breach of condition entitled them to exemption from liability to pay rates–They submitted that the occupation of the hereditaments as offices was the subject of a relevant ‘prohibition’ under para (a) or (b) of Schedule 1–From this the appellants argued that, as the description of a hereditament in the valuation list was an essential element in its identity, the occupation of the hereditament for a purpose other than offices amounted to the occupation of a different hereditament from that entered in the valuation list–No liability for rates could arise on this argument until a new entry was substituted applying an appropriate description to this new hereditament–Held, rejecting this submission, that the ‘hereditament’ referred to in para 2(a) and (b) of Schedule 1 was a unit of property sufficiently identified by an entry in the valuation list without reference to its description or the purpose for which the hereditament might lawfully be occupied–The appellants were not, therefore, prohibited from occupying the hereditaments in question nor were the hereditaments kept vacant by action taken by the local authority–The appellants were therefore liable for the disputed rates–Appeal dismissed.
The following cases are referred to in this report.
Camden London Borough Council v Herwald [1978] QB 626; [1978] 3 WLR 47; [1978] 2 All ER 880; [1978] EGD 860; (1978) 246 EG 823, [1978] 1 EGLR 107, CA; reversing [1977] 1 WLR 100, DC
Langford v Cole (1910) 102 LT 808
Overseers of the Poor of Manchester v Headlam and London & North Western Railway Co (1888) 21 QBD 96, HL
Ravenseft Properties Ltd v Newham London Borough Council [1976] QB 464; [1976] 2 WLR 131; [1976] 1 All ER 580; [1976] EGD 662; (1975) 237 EG 35, [1976] 1 EGLR 109, CA
This was an appeal by Hailbury Investments Ltd from a decision of the Court of Appeal reversing a decision of Woolf J who had reversed a decision of the stipendiary magistrate in favour of the rating authority, Westminster City Council. The issue was as to the appellants’ liability to pay rates in respect of unoccupied property at Albert Court, Prince Consort Road, London SW7.
The decision of the Court of Appeal is reported at [1985] 1 EGLR 148; (1984) 273 EG 773.
Charles Fay (instructed by Asher Fishman & Co) appeared on behalf of the appellants; M A B Burke-Gaffney QC and Clive Newberry (instructed by City Solicitor, Westminster) represented the respondents.
In his speech, LORD BRIDGE OF HARWICH said: The issue in this appeal is whether the appellants were liable to pay rates in respect of certain units of unoccupied property for the year 1978-79 and part of the year 1979-80. The respondents (‘the rating authority’), as rating authority for the City of Westminster, applied in the Horseferry Road Magistrates’ Court for the issue of distress warrants in respect of the disputed rates and were successful. On appeal by case stated to the Divisional Court, Woolf J reversed the decision of the stipendiary magistrate. The decision of the Divisional Court was in turn reversed by the Court of Appeal (Eveleigh and Stephen Brown LJJ and Sir David Cairns). The appellants now appeal by leave of your Lordships’ House.
Liability to pay rates in respect of unoccupied property arises under the provisions of Schedule 1 to the General Rate Act 1967. Para 1(1) provides:
Where, in the case of any rating area in which, by virtue of a resolution under section 17 of this Act, this Schedule is in operation, any relevant hereditament in that area is unoccupied for a continuous period exceeding three months, the owner shall, subject to the provisions of this Schedule, be rated in respect of that hereditament for any relevant period of vacancy; and the provisions of this Act shall apply accordingly as if the hereditament were occupied during that relevant period of vacancy by the owner.
The Schedule is in operation in the City of Westminster. It is accepted that this provision makes the appellants liable to pay the disputed rates unless they are exempted by para 2, which provides, so far as relevant:
No rates shall be payable under paragraph 1 of this Schedule in respect of a hereditament for . . . any period during which — (a) the owner is prohibited by law from occupying the hereditament or allowing it to be occupied; (b) the hereditament is kept vacant by reason of action taken by or on behalf of the Crown or any local or public authority with a view to prohibiting the occupation of the hereditament or to acquiring it; . . .
Each of the hereditaments in respect of which the disputed rates are claimed is described in the valuation list in force for the years in question in terms which include the word ‘offices’ to categorise the premises and, save for a reference in one case to a ‘caretaker’s flat,’ none of the descriptions is apt to refer to residential property. At the material time, as the case stated finds, each of the hereditaments in question was kept vacant by reason of a planning condition purporting to prohibit its use for office purposes. The condition had been imposed on the grant of permission for development which had not yet been implemented. One of the hereditaments was also affected by a planning condition imposed on an earlier grant of temporary permission for office use which had been implemented and which had expired in 1972. That condition required discontinuance of the office use in 1972. Use of the hereditament for office purposes after 1972 would have been a breach of that condition. There are no findings of fact in the case stated relating to the physical condition of the relevant premises at the material time. The case has been argued throughout on the footing that there was no impediment to their occupation for residential purposes. The proposition which the appellants must establish to succeed is that the effect of the planning conditions referred to in relation to hereditaments described in the valuation list in force at the material time as ‘offices’ is to entitle the owner of the hereditaments to exemption from liability to pay rates under para 2(a) or (b) of Schedule 1 to the Act of 1967.
Before one reaches the main issue, the appellants confront formidable difficulties in showing, by reference to the provisions of the Town and Country Planning Act 1971, that the occupation of the hereditaments as offices was the subject of a relevant ‘prohibition’ within the meaning of para 2(a) and (b). To succeed under (a) they would have to show that the owner of a hereditament who could only occupy it as offices in breach of a planning condition was ‘prohibited by law’ from so occupying it. To succeed under (b) they would have to show that the imposition of a planning condition on the grant of permission for development of which, if and when the development was carried out, it would be a breach to use a hereditament for office purposes amounted to action taken by a local authority ‘with a view to prohibiting the occupation of the hereditament’ as offices. These aspects of the case give rise to difficult issues of construction and of planning law. For my part, like the Court of Appeal, I am content to leave them unresolved and to assume in the appellants’ favour that the existence of the planning conditions which have been imposed enabled the appellants to claim either that they had been prohibited by law from occupying, or that action had been taken by the local planning authority with a view to prohibiting the occupation of, any of the hereditaments in question as offices.
Starting from the basis of such an assumption, the contention |page:175| advanced for the appellants may be shortly summarised. It is said that the description of a hereditament shown in the valuation list is an essential element in the identity of that hereditament; from this it follows that occupation of the physical entity described as offices in the valuation list for any purpose other than as offices is the occupation of a different hereditament from that to which the entry in the valuation list relates. Before any liability to pay rates in respect of that new and different hereditament can arise, it is for the rating authority to take steps to secure an alteration of the entry in the valuation list or, more accurately, the deletion of the existing entry and the substitution of a new entry applying words of description to the new hereditament which are apt to apply to the use for which the new hereditament is or may lawfully be occupied. To this the rating authority reply that the hereditament to which any entry in the valuation list relates is, in the case of a corporeal hereditament, simply the physical entity comprised in any unit of property identified by the description and other particulars appearing in that entry. It matters not that the description in the valuation list is no longer appropriate accurately to describe the use for which that unit of property is or may lawfully be occupied. If it is the same physical entity, it remains the same hereditament. If it may lawfully be occupied for any purpose, there is no prohibition of occupation of the hereditament to which para 2(a) or (b) is capable of applying so as to exempt the owner from liability for rates to which he is otherwise subject in respect of any period during which the hereditament is unoccupied.
The resolution of the issue to which these rival contentions give rise depends on the true construction of the Act of 1967. By section 115(1) ‘hereditament’ is defined as meaning:
property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list.
I shall refer to this as ‘the general definition.’ Liability to pay rates in respect of unoccupied property arises only in the case of a ‘relevant hereditament’, which is defined by para 15 of Schedule 1 as meaning:
any hereditament consisting of, or of part of, a house, shop, office, factory, mill or other building whatsoever, together with any garden, yard, court or other land ordinarily used or intended for use for the purposes of the building or part.
I shall refer to this as ‘the Schedule 1 definition.’
The general definition must be understood in the light of sections 16 and 67 of the Act, which provide, so far as presently material:
16. Subject to the provisions of this Act, every occupier of property of any of the following descriptions, namely — (a) lands; (b) houses; . . ., shall be liable to be assessed to rates in respect of the hereditament or hereditaments comprising that property according to the rateable value or respective rateable values of that hereditament or those hereditaments determined in accordance with the provisions of this Act.
67(1) For the purposes of rates, there shall be maintained for each rating area a valuation list prepared, and from time to time caused to be altered, in accordance with the provisions of this Part of this Act by the valuation officer. (2) Subject to the provisions of this Act, there shall be inserted in the valuation list such particulars as may be prescribed — (a) with respect to every hereditament in the rating area and the value thereof; . . .
Particulars required to be inserted in the valuation list are prescribed by the Valuations List Rules 1972 (SI 1972 no 1612). As one would expect, entries in the list are required to be made in accordance with forms scheduled to the rules and in relation to each hereditament entries are required to be made under the following headings: ‘Description’, ‘Address’, ‘Gross value’ and ‘Rateable value’. Save in certain special cases, not presently relevant, the rules make no provision as to what the entry under the heading ‘Description’ is to contain. Thus, although the use of the phrase ‘unit of property’ in the general definition seems to give strong support to the contention for the rating authority, the qualifying words ‘which is, or would fall to be, shown as a separate item in the valuation list’ prevent that phrase from having conclusive effect and in the absence of any direct indication elsewhere in the Act or rules made under it as to the significance of the description of a hereditament used in relation to an item in the valuation list, the general definition, by itself, fails to resolve the issue.
The Schedule 1 definition, in referring to different descriptions of building to define the limited species of the genus hereditament in respect of which the unoccupied rate is to be payable, may seem to give some support to the appellants’ contention, but is again, as it seems to me, quite inconclusive.
The resolution of the issue is to be found, in my opinion, in certain provisions relating to the preparation and alteration of valuation lists. Section 68(1) of the Act of 1967 required new valuation lists to be ‘prepared and made by the valuation officer so as to come into force on April 1 1973 and each fifth year thereafter.’ The fact that this statutory programme was not adhered to in the event is irrelevant to the point at issue. The valuation officer is required by section 68(2) to sign the new valuation list and transmit it to the rating authority in advance of the date when it is to come into force, normally by the end of the preceding year. Obviously the field work of inspecting and valuing individual properties will have been done at various dates before that. To ensure that the list is as far as possible up to date at the moment when it comes into force, section 68(3) and (4) then provide:
(3) Where, after the valuation officer has transmitted the list to the rating authority, but before the date on which the list is to come into force, it appears to him that, by reason of a material change of circumstances which has occurred since the time of valuation, the list needs to be altered in any respect, he shall cause the list to be altered accordingly before that date. (4) In subsection (3) of this section, the expression ‘material change of circumstances’ means a change of circumstances which consists of — (a) the coming into occupation of a newly erected or newly constructed hereditament or of a hereditament which has been out of occupation on account of structural alterations; or (b) a change in the value of a hereditament caused by the making of structural alterations or by the total or partial destruction of any building or other erection by fire or any other physical cause; or (c) the happening of any event whereby a hereditament or part of a hereditament becomes, or ceases to be, not liable to be rated; or (d) a change in the extent to which any railway or canal premises within the meaning of section 32 of this Act are occupied for non-rateable purposes within the meaning of that section; or (e) property previously rated as a single hereditament becoming liable to be rated in parts; or (f) property previously rated in parts becoming liable to be rated as a single hereditament; or (g) a hereditament becoming or ceasing to be — (i) a dwelling-house; or (ii) a private garage or private storage premises within the meaning of Schedule 11 to this Act; or (h) a hereditament being, in accordance with Schedule 13 to this Act, used to a greater or lesser extent for the purposes of a private dwelling or private dwellings, and the expression ‘the time of valuation’, in relation to a change of circumstances, means the time by reference to which the valuation officer prepared so much of the list as is affected by that change of circumstances.
I find significance in what is omitted from, as well as what is contained in, this list of what will amount to material changes of circumstances. With the exception of paras (d), (g) and (h), no paragraph suggests that a mere change in use or mode of occupation will amount to a material change of circumstances. If the appellants’ contention were right, one would expect a general paragraph to that effect, since a change of use effecting a change in the appropriate description to be applied to a hereditament results, according to the appellants’ contention, in the disappearance of the old hereditament and the creation of a new one.
Paras (d), (g) and (h) are special cases. Para (d) is not presently relevant, but paras (g) and (h) are of particular significance. ‘Dwelling-house’ is defined in section 115(1) as meaning:
a hereditament which, in accordance with Schedule 13 to this Act, is used wholly for the purposes of a private dwelling or private dwellings.
Whether or not a hereditament is a dwelling-house as defined is of importance in relation to the application of sections 58 to 62 which grant certain special reliefs to the occupiers of dwelling-houses. I need not examine in detail the elaborate provisions of Schedule 13, which set out various circumstances in which a hereditament is to be deemed, according to the extent of its use for various purposes, either to be or not to be ‘used wholly for the purposes of a private dwelling or private dwellings’ so as to bring it within the definition of dwelling-house. There thus appears to be a substantial overlap between paras (g) (i) and (h) of section 68(4). Be that as it may, the language of both paragraphs and of Schedule 13 seems to me quite inconsistent with the view that a hereditament changes its identity when by reason of a change in the manner of its use it becomes or ceases to be a dwelling-house as defined.
Section 69, which introduces the fasciculus of sections headed ‘Alterations of current valuation list’, provides as follows:
(1) Subject to subsection (6) of this section, any person (including a rating authority) who is aggrieved — (a) by the inclusion of any hereditament in the valuation list; or (b) by any value ascribed in the list to a hereditament or by any other statement made or omitted to be made in the list with respect to a |page:176| hereditament; or (c) in the case of a building or portion of a building occupied in parts, by the valuation in the list of that building or portion of a building as a single hereditament, may at any time make a proposal for the alteration of the list so far as it relates to that hereditament.
Here it seems to me that the words in para (b) ‘any other statement made or omitted to be made in the list with respect to a hereditament’ are apt to embrace whatever is included in or omitted from the entry in the valuation list under the heading ‘Description’ and it must follow that the subsection contemplates that an alteration of the description will not alter the identity of ‘that hereditament’.
A proposal for alteration of the valuation list may be made under section 69(1) at any time during the currency of the list. Where a proposal to alter the valuation of a hereditament shown in the list or to include a new hereditament in the list is made some years after the particular list came into force, this gives rise to a problem familiar to all rating valuers. A general appreciation of values in a rating area can only be reflected in the valuation list when a new list comes into force. Thus, if a hereditament were to be valued, pursuant to a proposal made in, say, 1977, by reference to 1977 values rather than to the level of values prevailing when the 1973 list was prepared, this could produce unfairness as between one ratepayer and another. The Act of 1967 sets out to provide a solution to this problem in section 20 and, using the familiar jargon of rating valuation, aptly gives the section the side note ‘Valuation according to tone of list’. Section 20(1) provides:
For the purposes of any alteration of a valuation list to be made under Part V of this Act in respect of a hereditament in pursuance of a proposal, the value or altered value to be ascribed to the hereditament under section 19 of this Act shall not exceed the value which would have been ascribed thereto in that list if the hereditament had been subsisting throughout the year before that in which the valuation list came into force, on the assumptions that at the time by reference to which that value would have been ascertained — (a) the hereditament was in the same state as at the time of valuation and any relevant factors (as defined by subsection (2) of this section) were those subsisting at the last-mentioned time; and (b) the locality in which the hereditament is situated was in the same state, so far as concerns the other premises situated in that locality and the occupation and use of those premises, the transport services and other facilities available in the locality, and other matters affecting the amenities of the locality, as at the time of valuation.
Among the ‘relevant factors’ enumerated by subsection (2) is ‘(a) the mode or category of occupation of the hereditament’ and by subsection (3) the ‘time of valuation’ is defined as meaning:
the time by reference to which the valuation of a hereditament would have fallen to be ascertained if this section had not been enacted.
To illustrate the operation of these provisions I take the example of a house formerly shown in the valuation list as a single hereditament. It is converted into two flats which, being in separate occupation, require separate entries in the valuation list. Proposals to alter the list accordingly are made in the rating year 1977-78. The ceiling value for each new hereditament is to be the value which would have been appropriate in the 1973 valuation list, ie a value assessed by reference to the level of values prevailing before April 1 1973, on the assumption that each hereditament and its relevant surroundings subsisted throughout the year to April 1 1973 in the same state as on the date of the proposal to enter the new hereditament in the list and on the further assumption that ‘the mode or category of occupation of the hereditament’ in 1972-73 was also as it is on the later date. If each of the two new hereditaments at the date of the proposal to alter the valuation list was occupied as a residential flat, each will be valued as such. But if one of the new hereditaments is occupied as offices, although it is the same hereditament, it will attract a different, and no doubt higher, value.
It seems to me that the inclusion of ‘the mode or category of occupation of the hereditament’ as a ‘relevant factor’ for the purposes of section 20, especially when contrasted with the absence of any analogous general reference to a change of use as a ‘material change of circumstances’ under section 69 (save in the special cases to which section 69(4)(d), (g) and (h) refer) is another powerful pointer to the conclusion that the purpose for which a hereditament is occupied is relevant to the valuation but not to the identity of the hereditament.
The appellants complain that it does an injustice to the owner of an unoccupied hereditament which can only be lawfully occupied for residential purposes if ‘hereditament’ in para 2(a) and (b) of Schedule 1 is construed as referring to the physical unit of property identified in the valuation list without regard to the description of the hereditament which categorises it as non-residential property. It was contended in the courts below that this imposed liability on the owner to pay rates at a higher rate poundage than if the hereditament were described as residential. It was, however, conceded in your Lordships’ House that this was a false point. The lower rate poundage paid by occupiers of dwelling-houses results from the provisions of section 48 of the Act, the purpose of which is sufficiently indicated by the side note: ‘Reduction of rates on dwellings by reference to domestic element of rate support grants.’ By para 1(2) of Schedule 1 the amount of rates payable by the owner in respect of an unoccupied hereditament is to be one-half of the amount which would be payable if he were in occupation of it, but the subpara specifically provides that ‘no reduction shall be made under section 48 of this Act in respect of any rates so payable’.
However, this aspect of the appellants’ complaint may be put in an alternative way, in that the hereditaments in question clearly attracted a higher rateable value as offices than they would have done as residential property. But the answer to this point is that, in such a case, the remedy is in the hands of the owner of the unoccupied property. If a hereditament has been described and valued as offices in the current valuation list, but ceases to be occupied as offices because that use has been prohibited by law, and the only lawful use is residential, the owner has ample opportunity during the period of three months which must elapse before a relevant period of vacancy begins to propose an alteration to the valuation list. The result will be an alteration of the entry relating to the hereditament in which the new rateable value will reflect its letting value for residential use and the new rateable value will take effect retrospectively from the beginning of the rating year in which the proposal was made: section 79(1).
Your Lordships were referred to a number of authorities. I confess that I did not derive any great help from them since, as I have already indicated, I regard the point at issue as purely one of statutory construction which has not previously been considered. There are, however, two cases to which I must refer. Woolf J founded his conclusion in favour of the appellants, to some extent at least, on some observations of my own in the Court of Appeal in Ravenseft Properties Ltd v Newham London Borough Council [1976] QB 464. That case was concerned with the construction of para 8 of Schedule 1 which operates to determine the date of completion of a newly erected building on which in turn depends the date when the owner will become liable to pay rates under Schedule 1 if the new building remains unoccupied for more than three months after its completion. Para 8(1) provides:
Where a rating authority are of opinion — (a) that the erection of a building within their area has been completed; or (b) that the work remaining to be done on a building within their area is such that the erection of the building can reasonably be expected to be completed within three months, and that the building is, or when completed will be, comprised in a relevant hereditament, the authority may serve on the owner of the building a notice (hereafter in this paragraph referred to as ‘a completion notice’) stating that the erection of the building is to be treated for the purposes of this Schedule as completed on the date of service of the notice or on such later date as may be specified by the notice.
By para 8(4) the recipient of a completion notice has the right to appeal against it to the county court if he quarrels with the date of completion of the building specified in the notice. The case of Ravenseft arose from such an appeal. The issue was whether a newly erected office block was on the date specified in the completion notice served by the rating authority a completed building. The main structure was then completed, but the building had no interior partitioning and no telephone installation and the installation of electrical wiring and points was incomplete. As it stood, the building was incapable of occupation as offices. In my judgment, after referring to the Schedule 1 definition of ‘relevant hereditament’, I said, at p 478:
Bearing in mind that, under the law as it stood for centuries before unoccupied property became capable of rating, occupation was always the test of liability, I should, if I were construing this provision without having regard to its wider context, say without hesitation that what was contemplated was that the building should be completed so as to be capable of occupation for the appropriate purpose of the particular hereditament, that is, as a house, shop, office etc. If the building lacks features which before it can be occupied will have to be provided and when provided will form part of the occupied hereditament and form the basis of the valuation of that hereditament, then I
would take the view, unless constrained to the contrary, that that building was not within the meaning of the relevant provision a completed building.
I do not resile from what I there said. In the case of a new, purpose-built building, the question when it is complete as a relevant hereditament, in the sense of being fit for occupation, is quite properly to be answered with regard to the purpose for which it is designed to be used. But I do not, with respect, think that this throws any significant light on the entirely different question whether a hereditament comprised in an existing building changes its identity whenever there is a change in the purpose for which it is used.
In the argument before your Lordships, the authority most relied on by Mr Fay, for the appellants, was Camden London Borough Council v Herwald [1978] QB 626. The question in that case was whether the defendant was liable to pay rates in respect of a hereditament of which he occupied only a part. The Court of Appeal held that he was not, reversing the decision of the Divisional Court [1977] 1 WLR 100. It seems to me that the difference between the Divisional Court and the Court of Appeal in that case turned not at all on any question of principle but rather on the question what was the result of applying a simple and well established principle to the complex and somewhat obscure facts of the particular case. So far as the principle is concerned, I find it accurately stated in the following passage in the judgment of the Divisional Court delivered by Robert Goff J, at pp 102-103:
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, 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.’ 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 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 including property which the person rated does not occupy, the rate cannot be enforced against him and a distress warrant should not be issued.
It would serve no purpose to examine the facts in the case of Herwald. I need express no concluded view as to whether the Divisional Court or the Court of Appeal were right in the conclusion they reached, though I am inclined to prefer the reasoning of the Divisional Court. The judgment of the Court of Appeal certainly provides no foundation for any proposition of law at variance with the passage I have cited from the judgment of the Divisional Court.
What Mr Fay seeks to extract from the case is the proposition that, if a person is in occupation of premises for a purpose which does not fulfil the description of the only hereditament in the valuation list which is capable of relating to those premises, he is not liable for rates. This is said to follow logically from the words, at p 103: ‘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: . . .’ Even if that half sentence is read entirely out of context, I doubt if it serves Mr Fay’s purpose. But if one reads the passage as a whole it is perfectly clear that it is concerned only with liability to rates arising from partial occupation of a hereditament. No doubt the principle is well settled that if a mixed hereditament comprising property of different kinds is described in the valuation list by reference to different elements, the occupier of part only of the hereditament who can show that a substantial element of the hereditament as so described is not occupied by him will not be liable for rates in respect of the hereditament as a whole and thus will escape liability altogether until the valuation list is altered to identify and describe as a separate hereditament the property which he does occupy. But this principle has no application to a hereditament which is fully occupied, nor is it concerned in any way with the question whether the purpose of the occupation does or does not correspond with the description of the hereditament in the valuation list.
For the reasons I have given I conclude that, on the true construction of the Act of 1967, ‘the hereditament’ referred to in para 2(a) and (b) of Schedule 1 applies to a unit of property which is sufficiently identified by an entry in the valuation list whether or not the description of the hereditament in that entry appropriately describes the purpose for which the hereditament may lawfully be occupied. It follows that the appellants were not at the material time prohibited from occupying the hereditaments in question, nor were they kept vacant by reason of action taken by any local authority with a view to prohibiting their occupation. The appellants are liable for the disputed rates.
I reach this conclusion without regret. Problems of enforcement in planning law have shown how easily material changes of use may escape the attention of local authorities. If the appellants’ contention were right, any change of use of premises might result in the creation of a new hereditament in respect of which the occupier could only be made liable for rates by an alteration of the valuation list. This would introduce a novel and, to my mind, surprising doctrine into rating law. The application of the doctrine would give rise to difficult questions as to the precise degree of correspondence between the description of the hereditament and the purpose for which it was in fact occupied which was necessary to an effective entry in the valuation list. I cannot see that any legitimate interest of ratepayers requires the protection of such a doctrine. But it would, on the other hand, create obvious difficulty for rating authorities.
I would dismiss the appeal.
LORDS BRANDON OF OAKBROOK, GRIFFITHS, MACKAY OF CLASHFERN and ACKNER agreed with the speech of Lord Bridge of Harwich in dismissing the appeal and did not add anything further
