Rating–Appeal against issue of distress warrant–Effect of closing order in respect of basement of the hereditament–Submission by ratepayers that they were not in occupation of basement as they were prohibited by closing order from using it–Submission rejected–Occupation is a question of fact and it was clear that a closing order does not as a matter of law automatically end occupation–There was no finding of fact in the case stated, but it was understood that tenants had continued to live in the basement for some months after the closing order and into the relevant rating period–Appeal against distress warrant dismissed
The appeal was
by Benwell Mansions Ltd against an order for the issue of a distress warrant in
respect of unpaid rates made by E G MacDermott, a Metropolitan stipendiary
magistrate, sitting at Horseferry Road. The premises in question were at 41
Gloucester Place, W1, and the complaint was made by Westminster City Council.
E Bailey
(instructed by Arthur W Kemp) appeared on behalf of the appellants; J
Winegarten (instructed by the Solicitor, Westminster City Council) represented
the respondent council.
Giving
judgment, ORMROD LJ said: This is an appeal by way of case stated by Benwell
Mansions Ltd against an order made by Mr MacDermott, stipendiary magistrate,
sitting at Horseferry Road, ordering the issue of a distress warrant in respect
of unpaid rates on a complaint by the City of Westminster.
The relevant
facts are very short. The appellants purchased or acquired the premises at 41
Gloucester Place W1 in August 1977. On February 9 1978, not having paid the
rates which were due on the premises of £933.21, a complaint was laid
by the local authority before the magistrates asking for the usual distress
warrant to enforce payment. The period in respect of which the rates were due
was August 16 1977 to March 31 1978. The hereditament for rating purposes was
entered in the valuation list in these terms: ‘Flatlets and Premises (less
Ground Floor (front)) at 41 Gloucester Place W1.’ There is no doubt that from the time they
acquired the premises, for the purpose of rates the appellants were occupying
that property.
However, a
closing order had been made in respect of the basement of these premises by the
local authority under the Housing Act 1957, section 18, on April 13 1977. The
effect of that closing order was to prohibit the use of the basement for any
purpose other than a purpose approved by the local authority. As a matter of
fact, although this does not appear in the case, the lease under which the
appellants held the premises contained a restriction as to user, limited to
residential purposes only.
The point
which Mr Bailey has taken, and the point which the appellants took in the court
below, was this. They say first that they were not in occupation of the
basement, because as a result of the closing order they were prohibited from
using it. That being so, they say, they were not in occupation of the
hereditament as described in the valuation list, and consequently they were not
liable to any sum by way of rates. The argument on the other side is that they
were in occupation notwithstanding the closing order, and that in any event the
description in the valuation list is apt to cover the premises, even though
they were not using or in occupation of the basement, and consequently the
order was rightly made.
The point
arises from a decision of the Court of Appeal in Camden London Borough
Council v Herwald [1978] QB 626. The problem is there set out very
clearly. The point of that case is this. A ratepayer has two possible
alternative remedies. He can always apply for or make a proposal for an
amendment of the description in the valuation list and consequently a change in
the valuation upon that alteration. Or he can show, if he can, that the
description of the premises of the hereditament in the valuation list is wrong
so far as his occupation is concerned. Sitting in this court Robert Goff J put
the position very clearly in the passage which is quoted by Browne LJ in giving
the judgment of the Court of Appeal in the Herwald case. That passage is
to be found at p 642 and reads thus:
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.
Mr Winegarten
on behalf of the City of Westminster submits in the first place that the
description in the valuation list is in rather general terms and so is apt to
include occupation by the appellants, whether or not that occupation includes
the basement. For my part I would accept that first submission.
The second
point upon which Mr Bailey for the appellants must succeed, if he is to
succeed, is to show that the appellants were not at the relevant time in
occupation of the basement as a matter of law, because there is no finding of
fact in the case. The point of law which he relies upon is that the closing
order prohibits the use of the premises except for a purpose approved by the
local authority. He says that under the terms of the lease his clients are not
allowed to use the basement for any purpose other than residential, and they
are prohibited from using it for residential purposes by the closing order. So,
he says, they are not in occupation of the basement at all.
That view does
not appeal to me and I think that is wrong. It seems to me that this is a
question of fact. We are told by Mr Winegarten that notwithstanding the closing
order in this case, the tenants in the basement continued to live there for
quite some months and into the rating period with which we are concerned. Mr
Winegarten makes the point, which seems to me to be a good one, that whether or
not people continued to be occupying the basement is a matter of fact which may
expose the owner of the premises to the liability of a fine for allowing them
to be there, but it is clear that a closing order in law does not ipso facto
end occupation. That deals with Mr Bailey’s second point.
In my judgment
the appeal fails on both limbs and I would dismiss the appeal.
Agreeing,
McNEILL J said: I agree. I would only add, with respect, that I, too, find the
passage which my Lord has cited from the judgment of Robert Goff J in Camden
London Borough Council v Herwald a most helpful guide to my approach
to this problem. Although the decision of the Divisional Court in that case was
reversed in the Court of Appeal, it was reversed on the facts. Browne LJ makes
it clear at p 643D as follows: ‘It seems to us that each case must depend on
its own facts and on the construction of the particular entry in the list.’ On the facts of this case therefore the
situation as found, and as developed by further submissions in this court, set
against the entry in the valuation list shows no such difference as would
entitle this court to hold that the premises did not fulfil the description in
the valuation list.
Indeed if the
argument were pursued to its conclusion on the basis on which Browne LJ dealt
with the matter in Herwald, a conclusion for which Mr Bailey
contends–which is not that no rate is chargeable in respect of the unused
basement, but that no rate is chargeable in respect of the hereditament as a
whole–it seems to me that that is a conclusion which requires a very strong
finding of fact in favour of an occupier.
Criticism was
made of the way in which the question was posed in the stated case. It would, I
think, be right to say that the real question for our consideration would be,
if I amend the question and put it more narrowly in the context of this case,
in these terms: Does an occupier remain liable for rates in respect of a listed
hereditament when, in consequence of a closing order, he no longer physically
occupies a part of that hereditament? To
that question I would answer ‘Yes.’ On the
facts of this case the appellants remain in rateable occupation of the listed
hereditament.
The appeal
was dismissed with costs.
