Listed building — Liability for non-domestic rates — Building comprising two hereditaments — Whether claimant building owner entitled to exemption from rates in respect of unoccupied hereditament — Magistrates holding exemption applying only where entire building unoccupied — Appeal allowed
The claimant owned a building that was listed under the provisions of the Town and Country Planning Act 1971. The building comprised two hereditaments, the first consisting of the basement and ground floors and the other comprising the first and second floors. The lower unit was occupied by a tenant, and non-domestic rates were paid in respect of that unit. However, the claimant refused to pay non-domestic rates to the defendant council in respect of the unoccupied first- and second-floor unit, contending that it was exempt by virtue of regulations 2(2)(a) and 2(2)(d) of the Non-Domestic (Unoccupied Property) Regulations 1989. It relied upon regulation 2(2)(a) as providing that a hereditament could consist of a part of a building and upon regulation 2(2)(d), which had the effect that no liability to rates arose where a hereditament was “included in a list complied under section 54 of [the 1971] Act.”
The defendants initiated a complaint against the claimant in the magistrates’ court, contending that the claimant was liable to pay non-domestic rates of £373.79 on the first- and second-floor unit in respect of a three-month period. They argued that the unit was not exempt since: (i) that hereditament, as opposed to the building as a whole, did not appear in the register of listed buildings; and (ii) in any event, the exemption applied only where a building comprised a single hereditament and where the entirety was unoccupied. Finding in favour of the defendants, the magistrates held that the claimant had misinterpreted regulation 2(2)(a), which did no more than define a non-domestic hereditament to include a part of a building, and did not have the effect that a hereditament was itself listed simply because it formed part of a listed building.
The claimant appealed by way of case stated. The question for the court was whether an unoccupied hereditament, which was situated within a listed building containing a second hereditament that was occupied, was exempt from paying non-domestic rates.
Held: The claim was allowed.
The case turned on the meaning of the word “included” in regulation 2(2)(d); the question was whether that meant that a hereditament had to be named in the list to qualify for exemption or whether it was sufficient for it to be included within a building that was listed. Since the statutory provisions were ambiguous, it was permissible to have regard to policy considerations and to take the interpretation that produced a reasonable result. Given that only a building, and not a hereditament as such, could be listed under the 1971 Act, the 1989 Regulations could not mean that the hereditament had to be listed in order to qualify for an exemption. The regulations should be given a more liberal interpretation, such that where an unoccupied hereditament was wholly included within a building that was listed, exemption from non-domestic rates would follow: Debenhams plc v Westminster City Council [1987] 1 EGLR 248 applied.
Gary Cowen (instructed by Worthingtons, of Folkestone) appeared for the claimant; Timothy Mould QC (instructed by the legal department of Thanet District Council) appeared for the defendants.
Sally Dobson, barrister
