The House of Lords has followed the Court of Appeal and the High Court in backing a double rating assessment of the occupants of two power stations, ruling that the situation was not irrational.
The case centred upon Powergen’s disposal of the power station at Fiddler’s Cherry, Cheshire, and of Ferrybridge C in Yorkshire.
Edison acquired 199-year leases of the power stations, and Powergen, by a clause in the agreement, was entitled to indemnity from Edison in respect of non-domestic rates payable for the period 1999 to 2000.
While Powergen was designated for central rating in respect of the two power stations, Edison, which was not designated under the Local Government Act 1988 for the purpose of central rating, came under local list provisions.
When Powergen ceased to occupy the premises, it claimed sums paid as non-domestic rates in respect of the period 1999 to 2000, following Edison’s occupation.
The local councils sought local non-domestic rates from the time that Edison took up occupation, and the central valuation officer refused to amend the central rating list that would have entitled Edison to a refund.
In the High Court, Edison branded the situation as one of unlawful double taxation and claimed that it was irrational.
However, the High Court refused permission for judicial review, holding that the situation was both rational and lawful under the provisions of the 1988 Act.
The Court of Appeal backed that verdict in July 2001, and now, by a 3:2 majority, Edison has also won the backing of the House of Lords.
Lord Millett, agreeing with Lord Hoffmann and Lord Scott that the appeal should be dismissed, said: “I agree that, in the present case, there was an element of double recovery in that the Secretary of State received payments by reference to the same element of value during the same period from both Powergen and Edison, but I do not consider that this was unfair or unreasonable.
“It is not just a question of swings and roundabouts, although this goes a long way to alleviate any unfairness.
“It is rather that the element of double recovery arose as a result of the provision for annual adjustment, which was an appropriate and long-established feature common to the various systems under which public utilities, including the electricity generating industry, were rated for many years prior to 1988.”
Edison First Power Ltd v The Secretary of State for the Environment, Transport and the Regions House of Lords (Lords Bingham, Steyn, Hoffmann, Millett and Scott) 10 April 2003.
References: PLS News 11/4/03
