Warehouse — Meaning of actual occupation — General Rate Act 1967 (now repealed) — Whether owner was occupier within meaning of Act — Premises available for use at short notice — Intention to use for business purposes — Not actually so used — Magistrates holding that owner in rateable occupation — High Court upholding that decision — Appeal allowed — No evidence of actual use
On June 17 1989 Abbey Self Storage (Abbey), took possession of premises at Forth Street, Newcastle upon Tyne. It provided self-contained storage space for both domestic and commercial customers in industrial, lockable, storage cubicles. Abbey also offered industrial and storage space to let. Customers hired self-storage cubicles under a licence agreement and were required to: move goods in and out of the cubicles themselves; provide their own padlock and key; and purchase their own insurance cover. During business hours customers could access their units as often as they wished without charge. They were required to sign a register on entry and exit for security reasons. Abbey reserved the right to access any cubicle at all times and for all purposes, under the licence agreement.
For rating purposes the building was divided into seven separate hereditaments. One comprised the car parking area on the roof. The various units were separated by solid-block walls. A dispute arose over a claim for rates in respect of three of the hereditaments. Abbey denied liability for rates because the areas in question were not being used by them for business purposes. The magistrates found that the Abbey was in rateable occupation.
The High Court upheld that view on the basis that the areas were readily available for occupation at short notice should there be customers who wished to occupy them and there was an intention to use them for that purpose. Abbey appealed to the Court of Appeal.
Held The appeal was allowed.
1. There were four ingredients of rateable occupation: there must be actual occupation; it must be exclusive for the purposes of the occupier; it must be beneficial; and it must not be too transient.
2. There was no occupation in the context of rating unless some use was made of the hereditament in the course of the relevant year. Use was not a word of precise meaning but in general it conveyed the idea of enjoyment derived by the user from the corpus of the object enjoyed: see Arbuckle Smith & Co v Greenock Corporation [1960] AC 813.
3. In this case there was no finding that, at any material time, the appellant had any physical presence in any of the three hereditaments or was in any way actually using them.
4. Although the magistrates found that the appellant intended to use the hereditaments should customers need them at short notice, a mere intention to occupy did not constitute rateable occupation: see Hampstead Metropolitan Borough v Associated Cinema Properties [1944] 1 All ER 436.
George Bartlett QC and Christopher Boyle (instructed by McKenna & Co) appeared for the appellant; Nigel Macleod QC and Christopher Lewsley (instructed by the solicitor to the city council) appeared for the respondents.
