Rateable occupation – Unoccupied hereditament – Unpaid rates – Respondent rating authority demanding unoccupied non-domestic rates from appellant – Appellant claiming exemption on ground of occupation being prohibited by law – District judge upholding demand – Appellant appealing by way of case stated — Whether appellant being entitled to exemption – Appeal dismissed
The appellant was the owner of two properties in Gloucester which appeared in the rating valuation list as office premises and comprised three and five storeys respectively. They were constructed of concrete and steel with wall cladding and flat roofs. The properties were unoccupied either by the owners themselves or by tenants during the years 2011, 2012 and 2013. The respondent local authority made an unoccupied, non-domestic rate demand for each of those years in the total sum of £365,835. The appellant sought exemption on the ground that non-occupation was the result of dilapidations, caused at least in part by vandalism; the state of the properties was such that occupation was prohibited by law. The respondents refused the exemption and applied to the district judge for a liability order pursuant to regulation 12 of the Non-Domestic Rating (Collection and Enforcement) Local Lists Regulations 1989 (SI 1989/1058).
The judge rejected the appellant’s argument that the properties were exempt. The appellant appealed to the High Court by way of case stated. The questions for the court were: (i) whether, in the absence of a statutory provision or valid statutory notice directly prohibiting occupation, the court was correct to determine that, both the fact that the properties were constructed as offices and in disrepair, and the evidence that occupation of the properties for office use would not comply with health and safety legislation, were insufficient grounds to support a conclusion that the properties were prohibited by law from being occupied within regulation 4(c) of the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 (SI 2008/386) and (ii) alternatively, whether on finding that there was no prohibition in law on occupying part of the properties for storage use and in the light of evidence that areas of the properties could form an internal store, the court could determine that the possibility of storage alone meant that occupation of the properties were not prohibited by law within regulation 4(c), or whether the court should first have considered whether the areas in question could be defined as separate parts of the properties.
Held: The appeal was dismissed.
(1) The burden was upon the owner to establish the exemption. The starkness of the term “prohibited by law from occupying” pointed to a strict interpretation. Parliament, when granting the exemption in regulation 4(c), and its predecessors, would not have intended that owners should establish an exemption merely by inactivity resulting in the dilapidation of the building, except in cases of necessity. Regulation 4(a) provided the owner with exemption from unoccupied rates for three months and regulation 4(b) with an exemption for six months. It was improbable that Parliament intended the building owner to be exempted from unoccupied rates altogether in consequence its own failure to carry out necessary maintenance and repair unless expressly or by necessary implication occupation was prohibited by law. It was not enough for the owner to establish that if he occupied the property or allowed it to be occupied for a particular purpose he would render himself liable to prosecution under the health and safety legislation. He had to show that the law prohibited occupation, either because the law said he must not occupy in the circumstances as they currently prevailed, or that the necessary effect of a prohibition or enforcement notice was to prohibit him from occupation: Tower Hamlets London Borough Council v St Katherine-by-the-Tower Ltd [1982] 2 EGLR 49; (1982) 264 EG 529 and Regent Lion Properties Ltd v Westminster City Council [1990] 2 EGLR 175; (1990) 39 EG 57 applied. Easiwork Homes Ltd v Redbridge London Borough Council [1970] 2 QB 406 considered.
(2) The health and safety legislation did not prohibit occupation and the risk of breach of the legislation if the premises were, without more, occupied did not suffice to exempt the owner An assumption that occupation, of itself, would amount to the commission of a criminal offence was not justified. The duties were in the main owed by an employer towards his employees and visitors to the workplace. The owner could not lease the premises to an employer without taking such measures as were reasonable for a building owner to take to ensure that the workplace would be safe. The obligation of the owner, as an employer, to remedy the condition of the property or as a landlord to require the tenant, as an employer, to do so did not constitute a prohibition of occupation by law. Occupation of the properties would not of itself constitute an offence under section 33 of the Health and Safety at Work etc Act 1974; neither did section 33 expressly or by implication prohibit occupation.
(3) Since the district judge had made no finding on the issue whether occupation of the properties specifically for storage would disentitle the appellant’s claim for exemption, it was not appropriate for the court to express a concluded opinion upon that issue. Accordingly, for reasons which differed from those of the judge, he had been correct in law and the first question would be answered in the affirmative.
Daniel Kolinsky (instructed by Clarke Mairs LLP, of Newcastle upon Tyne) appeared for the appellant; Jenny Wigley (instructed by Bevan Brittan LLP) appeared for the respondents.
Eileen O’Grady, barrister
