Unoccupied hereditament — Rating of unoccupied hereditaments in force — Claim for reduction or remission of rates on ground of hardship — Case stated — Appeal by rating authority allowed
The respondents are the owners of hereditaments at Kirkgate, Wakefield; the appellants are the rating authority, who have applied Schedule 1 to the General Rate Act 1967 to the area and, thereby, are entitled to levy rates on unoccupied hereditaments. In October 1987 the respondents were successful in their application, under para 3A of the Schedule, to have the rates reduced to 25% on certain of their hereditaments which were then unoccupied. The respondents are a small family company and most of their income is derived from rents. In 1987 they had had difficulty in finding tenants for the hereditaments in question.
The rating authority appealed from the decision of His Honour Judge Hutchinson QC (sitting in the Wakefield Crown Court) (October 9 1987) contending that he had erred in his construction of the provisions of para 3A of the Schedule: ” … a rating authority shall have power to reduce or remit the payment of any rates … if they consider that the payment would cause hardship to the person liable for those rates”.
Held The appeal was allowed.
1. The corporate veil could not be lifted; the identity of the shareholders and the absence of any hardship to them was irrelevant: R v Liverpool City Council, ex parte Caplin (1984) 272 EG 1075.
2. For the purposes of para 3A of Schedule 1 to the 1967 Act, there is a definition of “hardship” in Re Windsor Securities Ltd (1978) 250 EG 57 at p 155: “The question whether payment would cause hardship … has to be resolved in the light of commonsense having regard to all the circumstances. Hardship is different from poverty …”. A substantial detriment does not necessarily amount to hardship; the test might be whether a company can absorb a loss caused by having to pay rates. The fact that times were abnormal and the respondent company was unable to relet its properties through no fault of its own was not the same as hardship. A reduction of income does not necessarily constitute hardship, and accordingly, in relation to the sums involved and the income of the respondents, there was no hardship.
John H Muir (instructed by the solicitor to the City of Wakefield Metropolitan District Council) appeared for the appellants; and John Collins (instructed by Conway Kremer & Co, of Leeds) appeared for the respondents.
