Rating — Unoccupied property rate — Exemptions — General Rate Act 1967, section 17 and Schedule 1 — Whether occupation of hereditament prohibited by law — Whether hereditament kept vacant by reason of action taken by local authority — Para 2(a) and (b) of Schedule 1 — Appeal by case stated from decision of metropolitan stipendiary magistrate upholding complaint by rating authority and ordering issue of distress warrants in respect of alleged unpaid unoccupied property rates
hereditament in question was situated in an area of the City of Westminster
which was the subject of a resolution under section 17 of the 1967 Act imposing
an unoccupied property rate, fixed in fact at 100% of the occupied rate — The
appellant ratepayers, a property company, had planning permission for a large
development on which constructional work had begun, but it was overtaken by the
development on the site of an air terminal for Pan American Airways, to which a
sublease from the appellants and a limited planning permission had been granted
— The difficulty about unoccupied property rates arose after Pan American had
vacated the premises — The appellants, as the leasehold reversioners, had paid
the unoccupied rate from April 1 1982 to March 31 1984 — They then refused to
pay it on the ground that they were exempted under Schedule 1, para 2(a) and
(b), to the 1967 Act — Westminster City Council on March 30 1984 required the
appellants to cease work on the refurbishment of the hereditament because of
the danger from brown asbestos — Remedial work to remove this danger was
completed on May 21 1985
claimed that on April 1 1984 two events occurred which suspended their
liability to pay the unoccupied rate and brought them within the exemptions in
para 2 of Schedule 1 — The first event was the expiry of the planning
permission granted to Pan American; the absence of planning consent, it was
submitted, amounted to a prohibition by law within para 2(a) — The second event
was the discovery of the dangerous brown asbestos, followed by the city
council’s prohibition notice requiring the discontinuance of the refurbishment
works in the building until the danger was removed — It was submitted that this
was a prohibition by law within the meaning of para 2(a) and a direction that
the hereditament should be ‘kept vacant’ within the meaning of para 2(b)
held that, although the limited and temporary planning permission granted to
Pan American had expired, the earlier permission granted to the appellants had
survived — It was thus unnecessary to decide whether the absence of planning
consent would have meant that the owners would have been prohibited by law from
occupying the hereditament — The appellants thus failed on their first
submission — On the second, however, the effect of the brown asbestos, they
succeeded under both para 2(a) and para 2(b) — An attempt by the respondents to
distinguish a requirement under the Health and Safety at Work etc Act 1974 from
such an order as a closing order under the Housing Acts was rejected — Hence
the magistrate was wrong in deciding that the appellants were not exempt from
the unoccupied property rate for the period from April 1 1984 to May 21 1985 —
The appellants were, of course, subject to the normal incidence of the unoccupied
rate after the latter date
The following
cases are referred to in this report.
Arbuckle
Smith & Co Ltd v Greenock Corporation
[1960] AC 813; [1960] 2 WLR 435; [1960] 1 All ER 568; (1960) 58 LGR 155; 6 RRC
95; 53 R&IT 182, HL
Easiwork
Homes Ltd v Redbridge London Borough Council
[1970] 2 QB 406; [1970] 2 WLR 1199; [1970] 2 All ER 635; (1970) 68 LGR 653, DC
Laing
(John) & Son Ltd v Kingswood Assessment
Committee [1949] 1 KB 344; [1949] 1 All ER 224; (1949) 65 TLR 80; 47 LGR
64; 42 R&IT 15, CA
Pilkington v Secretary of State for the Environment [1973] 1 WLR 1527;
[1974] 1 All ER 283; (1973) 72 LGR 303; 26 P&CR 508; [1974] EGD 787; 230 EG
1737, DC
Pioneer
Aggregates (UK) Ltd v Secretary of State for the
Environment [1985] AC 132; [1984] 3 WLR 32; [1984] 2 All ER 358; (1984) 82
LGR 488; 48 P&CR 95; [1984] EGD 1094; 272 EG 425, [1984] 2 EGLR 183; [1984]
JPL 651, HL
Tower
Hamlets London Borough Council v St Katharine by
the Tower Ltd (1982) 80 LGR 843; [1982] EGD 1132; 264 EG 52, [1982] 2 EGLR
49; [1982] RA 261
This was an
appeal by case stated by Regent Lion Properties Ltd from the decision of the
metropolitan stipendiary magistrate, Sir Bryan Roberts, on a complaint by the
respondents, Westminster City Council, alleging the non-payment of unoccupied
property rates in respect of the hereditament at 2/26 Semley Place, London SW1.
The magistrate had ordered the issue of the distress warrant applied for by the
respondents.
Guy Roots QC
(instructed by Hamlin Slowe) appeared on behalf of the appellants; Richard Hone
and Gordon Catford (instructed by the solicitor to Westminster City Council)
represented the respondents.
Giving the
first judgment at the invitation of Stocker LJ, ROCH J said: This is an
appeal by way of case stated from the written decision of the metropolitan
stipendiary magistrate, Sir Bryan Roberts, given on May 4 1988.
The history of
these proceedings is that on May 7 1988 a complaint was preferred by the
respondents, the Westminster City Council, that the appellants, Regent Lion
Properties Ltd, were ‘a person duly rated and assessed to the general rate for
the periods April 1 1984 to March 31 1985 and April 1 1985 to March 31 1986 in
the sum of £45,026.34 in respect of a hereditament situated at 2/26 Semley
Place, London SW1, which remained unpaid’.
At the hearing
before the magistrate the complaint was amended with the agreement of both
parties to the lesser sum of £38,888.55 in respect of the shorter period of
April 1 1984 to December 25 1985.
The complaint
was heard by the magistrate on November 26 1987, February 15 1988 and April 7
1988.
On May 4 1988,
the magistrate ordered the issue of the distress
The appellants
appealed by way of case stated, the case being dated October 5 1988. The
written decision was incorporated as part of the case stated.
The
metropolitan stipendiary magistrate found the following facts proved and agreed
between the parties:
(a) The rated hereditament with which the application
was concerned formed part of a building development on land owned in leasehold
by the appellants since at least the early 1960s. It is situated in an area of
the City of Westminster to which in February 1968 the Council, by a resolution
under section 17 of the General Rate Act 1967, applied statutory provisions
whereby a relevant hereditament unoccupied for more than three months attracted
rate liability as though it was occupied. By further resolution under paragraph
1 of Schedule 1 to the Act the Council determined that the unoccupied rate
would be 100% of the occupied rate.
(b) On 2nd October 1964 the appellants obtained
outline planning permission from the then LCC to develop the land by building
on it a multi-purpose complex to include residential flats, shops, a petrol
station and a public car park.
(c) On 19th January 1966 the appellants received
planning consent from the Westminster City Council, the present respondents, to
implement this outline planning permission in accordance with plans approved by
the Council, embracing the constituent elements of the proposed complex
comprising the flats, shops, car park and petrol station. Statutory provisions
which subsequently were embodied in paragraph 19 of Schedule 24 to the Town and
Country Planning Act 1971 in effect required this planning consent to lapse if
implementation of it was not commenced before 1st April 1974.
(d) Under these plans approved by the Council, it
was the element of the 12 proposed shops which was to occupy the area of the complex
which subsequently became the hereditament, and in April and May 1966 relevant
correspondence took place between the appellants and their architect regarding
the implementation of this aspect of the development.
(e) Some time between the beginning of 1966 and
May 1967 the appellants began constructional work on the site in implementation
of the approved development. In respect of the shop element of the complex only
the outer structural walls of the entire shop and appurtenant basement area
were constructed and neither the shells of the individual shop units nor the
internal staircases thereof were built.
(f) In 1968 the implementation of this planned
complex was overtaken by a new development. The proximity of the site to what
was then the major air terminal of the British Overseas Airways Corporation in
Buckingham Palace Road attracted the interest of the Pan American Airways
Corporation, who wished to provide separate air terminal facilities for their
own passengers. Pan American negotiated with the appellants a sub-lease of that
part of the complex which had been planned to become the 12 shops, and obtained
from the Westminster City Council planning permission to develop it instead as
an air terminal.
(g) This permission was initially given to Pan
American for a limited period of 14 years, from 25th March 1968 to 31st March
1982, and on 5th November 1981 it was extended to terminate on 31st March 1984.
This extension was specifically expressed to be a planning permission personal
to Pan American for a limited period, and not to run with the land.
(h) Throughout the Pan American period, the
hereditament concerned was entered in the Valuation List as an air terminal and
was assessed for rates accordingly. No change was made in this entry in the
Valuation List when the Pan American lease terminated, and this remained the
position throughout the period with which the present complaint was concerned.
(i) Although the sub-lease granted to Pan
American Airways was originally one for 21 years commencing on 1st April 1968,
in the event Pan American vacated the premises on 24th November 1981, and paid
the unoccupied property rate from 25th February 1982 until 31st March 1982,
having in terms of the sub-lease terminated it with effect from that date.
(j) From 1st April 1982, the appellants as the
reversionary lease-holders paid the rates upon the hereditament as unoccupied
premises until 31st March 1984. Thereafter they declined to do so on the
grounds that they were exempted from liability, with the result that the
present proceedings were commenced for enforcement of payment up to 25th
December 1985, when the hereditament became the subject of a sub-lease to a
company operating the premises as a snooker club.
(k) Following vacation by Pan American Airways, the
appellants sought to require that company to return the hereditament to the
shell condition in which the hereditament was when Pan American Airways leased
it. Pan American Airways disputed that the lease required it to do so,
whereupon the appellants commenced the said work with the intention of claiming
the cost thereof from Pan American Airways.
(l) A notice issued by the Council under the
Health and Safety at Work etc Act 1974, dated 30th March 1984, required the
appellant to cease forthwith the said refurbishment of the said hereditament
until specified remedial work had been carried out, on the ground that brown
asbestos was present. The said remedial work was completed on 21st May 1985.
In respect of
an issue of fact which was disputed between the parties, I further found on the
evidence that before the expiration of the statutory limitation period provided
for in paragraph 19 of Schedule 24 to the Town and Country Planning Act 1971
which would otherwise have terminated the relevant consent, had the latter been
confined solely to the shop element of the planned complex, the appellants had
begun the implementation of that element within the hereditament in accordance
with the planning consent granted to them on 19th January 1966.
The case
stated then sets out at para 5 the submissions made to the magistrate by the
appellants. The first and second of those submissions were not pursued before
this court by the appellants in this appeal. At para 6 of the case stated are
set out the arguments advanced by the respondents before the magistrate and
then at para 8 the magistrate expressed his opinion in these terms:
(a) Being the leasehold owners of the
hereditament concerned to which the unoccupied rating provisions of the General
Rate Act 1967 had been applied, the appellants were liable for the rates
claimed unless they could bring themselves within an exception provided for in
paragraph 2(a) or (b) of Schedule 1 to the said Act.
(b) The service of the Health and Safety at Work
notice dated 31st March 1984 did not constitute action taken with a view to
prohibiting the occupation of the hereditament.
(c) On its true construction the planning consent
granted to the appellants on 19th January 1966 did not comprise more than one
permission.
(d) Even if the permission in respect of the shop
element of the approved development could be construed as a separate planning
permission, it had not lapsed under the provision of paragraph 19 of Schedule
24 to the 1971 Act, because implementation of it had been commenced before the
expiry of the limitation period provided for in that paragraph.
(e) The implementation of the planning consent
granted to Pan American Airways on 25th March 1968 did not extinguish pro tanto
the permission granted to the appellants on 19th January 1966.
(f) Following the expiry on 31st March 1984 of
the second air terminal permission, the appellants could accordingly lawfully
have developed and occupied the hereditament in accordance with the terms of
the 1966 planning consent.
(g) In any event, the existence or otherwise of
an extant planning consent in respect of the hereditament during the period
concerned was irrelevant to a claim of exemption from rating liability based
upon an alleged prohibition of occupation, since upon a proper construction of
the provisions of the Town and Country Planning Act 1971 lack of any consent to
develop or use land required thereunder did not constitute a prohibition by law
of occupation of land.
The magistrate
stated his conclusion in para 9 of the case stated in these terms:
Accordingly,
I was of the view that the appellants could not bring themselves within the
exceptions to liability contained in paragraph 2(a) or 2(b) of
Schedule 1 to the General Rate Act 1967, and that they were therefore liable
for the payment of rates as claimed. I therefore ordered the issue of the
appropriate Distress Warrant applied for.
A local rating
authority has a mandatory duty to make and levy the general rate for its area,
in accordance with the valuation list in force for the time being, under
section 2(4) of the General Rate Act 1967.
Section 67(6)
provides that:
Subject to
subsection (7) of this section, the valuation list . . . shall be conclusive
evidence for the purposes of the levying of that rate of the values of the several
hereditaments included in the list.
A hereditament
is defined by section 115 of that Act, unless the context otherwise requires,
as:
property
which is or may become liable to a rate, being a unit of such property which
is, or would fall to be, shown as a separate item in the valuation list.
Westminster
City Council, the respondents, had passed a resolution in February 1968 under
section 17 of the 1967 Act to bring Schedule 1 to the Act into operation in its
rating area: therefore, the liability to pay rates in respect of unoccupied
hereditaments existed in the respondents’ rating area.
The
hereditament known as 2/26 Semley Place, ie the basement and ground floor, was
in the rateable occupation of Pan American from March 23 1968 to November 21
1981. Pan American used that hereditament as an air terminal. It appeared in
the local valuation list as an air terminal. Pan American paid the rates in
respect of that hereditament between those dates.
Pan American
paid no rates in respect of that hereditament from November 21 1981 until
February 25 1982, because of the terms of Schedule 1 to the 1967 Act, which
provides that where a relevant hereditament, which includes any hereditament
consisting of any building whatsoever, is unoccupied, the owner shall, subject
to the provisions of the Schedule, be rated in respect of that hereditament for
any relevant period of vacancy, and the provisions of the Act shall apply as if
the hereditament were occupied during that relevant period of vacancy.
The relevant
period of vacancy, according to para 15 of Schedule 1, starts with the
unoccupied rating day and the same paragraph
standard period of three months from the day the hereditament becomes unoccupied.
It is
instructive to notice that the relevant period of vacancy ends on the day
preceding that on which the hereditament next becomes occupied or ceases to
exist. Instructive because occupied must mean ‘occupied’ in the special sense
given to that word in the law on rating. Consequently, unoccupied must be the
converse of ‘occupied’ in that special sense.
On February 25
1982, the relevant period of vacancy started, with regard to the hereditament.
Pan American were then ‘the owners’ within the meaning of Schedule 1 and
consequently paid the rates due in respect of the premises. Pan American paid
the rates for a very short period because on March 31 1982 they terminated the
sublease which they had taken from the appellants and the appellants became the
owners of the hereditament within the terms of Schedule 1 to the Act. The
appellants paid the rates up until March 31 1984, ie for two years, although
the premises remained unoccupied, because none of the exemptions in para 2 of
Schedule 1 applied.
Para 2 of the
Schedule begins:
No rates
shall be payable under paragraph 1 of this Schedule in respect of a
hereditament for, or for any part of the standard period beginning with the day
following the end of, any period during which . . .
and then sets
out some six events. Thus para 2 contemplates that a hereditament may be
unoccupied and rates due in respect of it and then an event can occur which
terminates or suspends for a time the owner’s obligation to pay rates in
respect of the hereditament under para 1 of the Schedule.
The appellants
claim that on April 1 1984 two events occurred which suspended their existing
obligation under para 1 of Schedule 1 to the Act to pay rates in respect of
this unoccupied hereditament.
Before
considering those two events, the meaning of ‘occupation’ in the law of rating
may be stated. It has four ingredients according to the Court of Appeal in John
Laing & Sons Ltd v Kingswood Assessment Committee [1949] 1 KB
344, namely (1) there must be actual occupation, (2) it must be exclusive for
the particular purpose of the occupier, (3) the occupation must be of some
value and benefit to the occupier, and (4) the occupation must not be for too
transient a period. The House of Lords in Arbuckle Smith & Co Ltd v Greenock
Corporation [1960] AC 813, a decision in a Scottish appeal, in which their
lordships proceeded on the basis that the law of England and the law of
Scotland were the same on the question of rateable occupation, decided that the
owner of premises who carried out work of conversion on his premises to make
the premises suitable for carrying on a business when the alterations are
completed (in this case the work was converting a warehouse to make it suitable
for use as a bonded warehouse) is not in rateable occupation of the hereditament
while the work of conversion is being executed.
Thus rateable
occupation is quite distinct from legal possession and from the concept of
occupation for the purpose of the occupier’s liability in the law of tort.
One decision
on the meaning of the word ‘unoccupied’ in Schedule 1 requires notice. That is
the decision of the Divisional Court in Easiwork Homes Ltd v Redbridge
London Borough Council [1970] 2 QB 406, namely that there was no implied
condition in Schedule 1 to the Act that a hereditament unoccupied for longer
than three months was capable of occupation before rates were payable under
para 1 of Schedule 1 and section 17 of the Act; that para 2 of Schedule 1
provides all the exemptions from liability to pay rates for hereditaments which
are unoccupied. The exemptions there provided are for hereditaments subject to
a legal disability and not for those which are physically unoccupiable. As the
magistrate pointed out in his written decision, the remedy for the owner where
the hereditament is physically unoccupiable is to apply for a reduction in the
rateable value entered in the valuation list.
The first
event on which the appellants rely was the expiry on March 31 1984 of the
planning permission as extended granted to Pan American. Thereafter, say the
appellants, there was no planning permission with regard to these premises and
the absence of a planning consent amounts to a prohibition in law within the
meaning of para 2(a) of Schedule 1. The respondents submit (1) that the
absence of a planning consent does not amount to a prohibition in law to
rateable occupation of the premises and (2) that there was, in any event, a
planning consent extant for this hereditament, namely the original planning
consent of January 1966 granted to the appellants which the appellants had, so
the magistrate found, started to implement some time between June 1966 and May
1967 and prior to April 1 1974 (the date on which the permission would have
lapsed if the development had not been commenced).
The appellants
reply to that second submission by the respondents that the planning consent of
January 19 1966 would, if completed, have created 12 rateable hereditaments and
not the one which was later included in the rating list and that therefore
there never has been a planning consent for the rateable hereditament in
question other than the one which was personal to Pan American and which
expired on March 31 1984.
The second
event was the discovery of brown asbestos in the building. The appellants had
claimed that Pan American were under an obligation to return the premises to
the applicants as an empty shell, by reason of the terms of Pan American’s
sublease, and had tried to persuade Pan American to carry out the necessary
work. Pan American disputed that any such obligation existed and had refused to
do the work. The appellants had started to do the work with the intention of
claiming the cost from Pan American. During the course of the work loose
asbestos was found. On March 30 1984 a notice called a prohibition notice was
issued by the director of the respondents’ department of the environment. The
notice refers to section 4(1) and (2) of the Health and Safety at Work etc Act
1974 and was issued under section 22 of that Act. It prohibits the execution of
building refurbishment works in the basement and ground floor of Semley House,
Semley Place, London SW1 (ie 2/26 Semley Place). In its schedule it sets out in
detail what must be done before the work of refurbishment can continue.
The magistrate
found that the necessary works under that notice were completed on May 21 1985.
Mr Roots QC,
for the appellants, conceded that if he succeeds on this argument alone, then
the exemption to which the appellants will be entitled will have ended on May
21 1985.
I turn now to
Schedule 1, para 2(a) and (b) — the provisions on which the
appellants rely.
Para 2(a)
reads:
any period
during which the owner is prohibited by law from occupying the hereditament or
allowing it to be occupied;
Para 2(b)
reads:
any period
during which the hereditament is kept vacant by reason of action taken by or on
behalf of the Crown or any local or public authority with a view to prohibiting
the occupation of the hereditament or to acquiring it;
The first
question on the first ground of exemption relied upon by the respondents is
whether there was a planning consent for this hereditament. Clearly the
planning consent granted to Pan American had ceased to exist because the
condition in that consent as to time had taken effect and because the consent
was personal to Pan American, who had surrendered their interest in the
premises. Did the earlier planning consent obtained by the appellants
survive? Mr Roots submits that it did
not and relies on the decisions in Pilkington v Secretary of State
for the Environment [1973] 1 WLR 1527 — a case in the Divisional Court —
and in Pioneer Aggregates (UK) Ltd v Secretary of State for the
Environment [1985] AC 132*, and in particular that part of Lord Scarman’s
judgment on pp 144B-145C:
The third
class of case comes nearer to the facts and law of the present appeal. These
cases are concerned not with existing use rights but with two planning
permissions in respect of the same land. It is, of course, trite law that any
number of planning permissions can validly co-exist for the development of the
same land, even though they be mutually inconsistent. In this respect planning
permission reveals its true nature — a permission that certain rights of
ownership may be exercised but not a requirement that they must be.
But, what
happens where there are mutually inconsistent permissions (as there may well
be) and one of them is taken up and developed?
The answer is not to be found in the legislation. The first reported
case appears to have been Ellis v Worcestershire County Council
(1961) 12 P&CR 178, a decision of Mr Erskine Simes QC to which Lord Widgery
CJ referred with approval in what must now be regarded as the leading case on
the point, Pilkington v Secretary of State for the Environment
[1973] 1 WLR 1527.
Mr Erskine
Simes, in a passage which Lord Widgery CJ was later to describe as exactly
illustrating the principle, said, at p 183:
‘If permission
were granted for the erection of a dwelling house on a site showing one acre of
land as that to be occupied with the dwelling house, and subsequently
permission were applied for and granted for a dwelling house on a different
part of the same acre which was again shown as the area to be occupied with the
dwelling house, it would, in my judgment, be
two dwelling houses on the same acre of land. The owner of the land has
permission to build on either of the sites, but wherever he places his house it
must be occupied with the whole acre.’
Pilkington was a Divisional Court decision. It had been approved by the Court
of Appeal in Hoveringham Gravels Ltd v Chiltern District Council
(1977) 76 LGR 533. Its facts were that the owner of land was granted planning
permission to build a bungalow on part of the land, site ‘B’. It was a
condition of the permission that the bungalow should be the only house to be
built on the land. He built the bungalow. Later the owner discovered the
existence of an earlier permission to build a bungalow and garage on another
part of the same land, site ‘A’. That permission contemplated the use of the
rest of the land as a smallholding. He began to build the second bungalow, when
he was served with an enforcement notice alleging a breach of planning control.
The Divisional Court held that the two permissions could not stand in respect
of the same land, once the development sanctioned by the second permission had
been carried out. The effect of building on site ‘B’ was to make the
development authorised in the earlier permission incapable of implementation.
The bungalow built on site ‘B’ had destroyed the smallholding: and the erection
of two bungalows on the site had never been sanctioned. This was certainly a
common sense decision, and, in my judgment, correct in law. The Pilkington
problem is not dealt with in the planning legislation. It was, therefore,
necessary for the courts to formulate a rule which would strengthen the support
the planning control imposed by the legislation. And this is exactly what the Divisional
Court achieved. There is, or need be, no uncertainty arising from the
application of the rule. Both planning permissions will be on a public
register: examination of their terms combined with an inspection of the land
will suffice to reveal whether development has been carried out which renders
one or other of the planning permissions incapable of implementation.
*Editor’s
note: Also reported at (1984) 272 EG 425 at pp 428-429, [1984] 2 EGLR 183.
The test would
seem to be this, that a planning permission will cease to exist if the premises
are developed in a way that makes that permission incapable of implementation.
Applying that
test to the facts of this case, the implementation of the Pan American
permission did not so alter the premises as to make the implementation of the
earlier permission for the construction of 12 shops impossible. In the Pilkington
case the smallholding which was an integral part of the first planning consent
had ceased to exist because of the construction of the first bungalow on what
would have been the smallholding: thus the first planning consent ceased to
exist. Here no such event occurred.
Consequently,
in my judgment, the conclusion of the magistrate in para 8(g) of the
case stated was correct.
On the second
argument advanced on behalf of the appellants, namely that the 1966 planning
consent did not apply to this hereditament, in my judgment that is wrong as a
matter of fact. The January 1966 planning consent clearly applied to that space
occupied by the premises known as 2/26 Semley Place, the hereditament included
in the respondents’ valuation rating list. No doubt, once the hereditament was
converted into 12 shops and the shops were let, the hereditament would have
ceased to exist for rating purposes and 12 new and smaller hereditaments would
have been entered on the local valuation list. But until that time the
hereditament would have continued to exist for the purpose of Schedule 1 to the
1967 Act.
The provisions
of para 10 of Schedule 1, although not applying in this case, as no completion
notice was served on the appellants, are still indicative of what the law is
where, by reason of structural alteration of a building, a relevant
hereditament becomes different hereditaments and when liability for rates in
respect of the relevant hereditament ceases. The answer is ‘on the completion
of the structural alteration and not before’. As I read his judgment, Bridge J
(as he then was) reached the same view in the Easiwork Homes case (supra)
at p 416 D-G.
I do not find
it necessary to decide the third issue which arose out of the consideration of
this exemption, namely, whether in the absence of planning consent the owner is
prohibited by law from occupying the hereditament or allowing it to be
occupied. I would simply observe that it is inconceivable that the premises
would not have been granted planning permission for some commercial use by the
local planning authority in 1984. Indeed, ultimately they were given planning
consent to use the premises as a snooker hall. It was open to the appellants to
put them to a commercial use and, if served with an enforcement notice under
the town and country planning legislation, to appeal against the enforcement
notice on the ground that a planning permission for that use should be granted.
The appellants would have been able to continue that use, provided that it was
not in breach of other laws, until the determination of such an appeal, and
beyond if their appeal were successful. Such use would be lawful in the sense
that it would attract no legal sanction.
In those
circumstances, it seems to me that it can hardly be said that the planning
legislation prohibited the appellant from occupying their premises in the sense
that word has in the law of rating.
The second
event on which the appellants rely is the finding of brown asbestos at the
premises during the work of stripping the first and second floors to return
them to the shell that they were before they were fitted out to serve as an air
terminal, and the resultant service of the prohibition notice on March 30 1984.
The appellants argue that the terms of the Health and Safety at Work etc Act
1974 are such that the appellants, as the owners of the hereditament, were
prohibited by law from occupying the hereditament or allowing it to be
occupied. Alternatively, the issuing of the prohibition notice meant that nos
2/26 Semley Place were kept vacant from March 30 1984 to May 21 1985 by reason
of action by the local authority, namely the service of the prohibition notice,
with a view of prohibiting the occupation of the hereditament.
Mr Roots
submits that although the prohibition notice was served in relation to a
particular activity, namely the ‘execution of building refurbishment works’,
which is the form required by section 22 of the Act of 1974, the service of the
notice is evidence that at that date there was a state of affairs which
justified the local authority’s preventing any activity which was occurring at
that time in the premises until the danger from the brown asbestos had been
removed. The test of whether an owner is prohibited by law from occupying the
hereditament, ie having actual occupation which is of some value and benefit
and exclusive for the particular purposes of the occupier, suggested by Mr
Roots is ‘would a law-abiding owner consider himself prohibited from occupying
the premises until the work specified in the schedule to the notice was carried
out’?
Mr Roots
relies upon the decision of McCullough J in Tower Hamlets London Borough
Council v St Katharine by the Tower Ltd [1982] RA 261*, where at p
269 of the report McCullough J is reported as saying:
If I may
revert once more to the owner who puts his property into compliance with part 5
of the 1939 Act as quickly as possible and ask whether he, during the period
when he was doing this, was ‘prohibited by law from occupying the hereditament
or allowing it to be occupied’ I think that only one answer can be given,
namely, that he was so prohibited by the operation of s 34(4). To cast a
liability for the payment of such 1 rates on him would, in my judgment, do
greater violence to the language of para 2(a) than it would to exempt
from liability for the whole period of five years the owner posed in the
earlier example.
*Editor’s
note: Also reported at (1982) 264 EG 52, [1982] 2 EGLR 49.
The
respondents’ arguments on this issue are these:
(1) There is a difference between a prohibition
by law which is specific in its terms and a law which may involve a person
acting unlawfully in the sense of carrying on an activity without specific
permission.
(2) A prohibition against occupation is a state
of affairs that puts the property or hereditament under some legal disability
in distinction to the activities carried on within it.
In the case of
Easiwork Homes Ltd v Redbridge London Borough Council [1970] 2 QB
406 Bridge J, as he then was, said at p 415C:
First there
is provision in paragraph 2 of the Schedule for exemption from liability in a
large number of cases, details of which I need not go into; they are, to put
the matter quite generally, properties subject to some legal disability . . .
and the learned
judge gave as an example the terms of para 2(a). Mr Howe stresses the
phrase ‘properties subject to some legal disability’ in support of his
proposition.
Mr Howe seeks
to draw a distinction between a prohibition which strikes at the heart of the
property and prevents its being used in a particular way, such as a closing
order under the Housing Act, and other statutory provisions, such as the
provisions of the health and safety legislation, which do not in express terms
prohibit the occupation or use of the property.
Alternatively,
Mr Howe submits if the decision in the St Katharine case cannot be
distinguished in this way then the case was wrongly decided. In the present
case neither the notice nor the provisions of the 1974 Act go anywhere near
prohibiting the occupation of this hereditament. The finding of the magistrate
on this aspect of the case was correct in law and in fact.
In my
judgment, on this part of the case two questions had to be asked and answered:
first, were the appellants between March 30 1984 and May 21 1985 prohibited by
the health and safety at work legislation from occupying 2/26 Semley Place or
allowing that
period between March 30 1984 and May 21 1985 a period ‘during which nos 2/26
Semley Place were kept vacant by reason of the service by the respondents of
the notice of March 30 1984, that being an action by the respondents with a
view to prohibiting the occupation of the hereditament’? I would, therefore, respectfully follow the
approach adopted by McCullough J in the St Katharine case.
In answering
these questions, the court must have in mind the special meaning of
‘occupation’ for the purposes of the law of rating. It is not legal possession
or legal occupation. It involves actual occupation. It must be exclusive for
the particular purposes of the occupier and it must be of some benefit or value
to the occupier. It does not include occupation merely for works of
refurbishment or alteration necessary for and preparatory to the particular
purposes to which the occupier will put the building.
The answers to
the questions will depend on the facts of each case.
In the present
case, what was found in the building was loose, brown asbestos, a highly
hazardous substance involving grave danger to the health of anyone entering the
premises. Section 4(2) of the 1974 Act provides:
It shall be
the duty of each person who has, to any extent, control of premises . . . or
substance in such premises to take such measures as it is reasonable for a
person in his position to take to ensure, so far as is reasonably practicable,
that the premises . . . and any . . . substance in the premises . . . are safe
and without risks to health.
Section 18(4)
places on a local authority the duty to make adequate arrangements for the
enforcement within their area of the relevant statutory provisions. Section
19(1) enables a local authority to appoint inspectors. Section 20 gives powers
to such inspectors which include under section 20(2)(h):
In the case
of any . . . substance found in any premises which he has power to enter, being
. . . substance which appears to him to have caused or to be likely to cause
danger to health or safety, to cause it to be dismantled or subjected to any
process or test . . .
Section 22
enables an inspector to serve a prohibition notice on the person carrying out
or controlling the carrying out of activities on the premises. Section 22(3)(d)
provides that a prohibition notice
shall direct
that the activities to which the notice relates shall not be carried on . . .
unless the matters specified in the notice . . . have been remedied.
By section
33(1)(a) of the Act it is an offence for any person to fail to discharge
their duty under section 4(2) and by section 33(1)(e) it is an offence
for a person to contravene any requirement imposed by an inspector under
section 20.
In my
judgment, the duty imposed on the appellants by section 4(2) of the 1974 Act,
in the circumstances of this case, would have required the appellants to vacate
the premises had they been occupied in the rateable sense. Being unoccupied,
the measures which section 4(2) would have required the appellants to take in
discharge of their statutory duty would have included the exclusion of all
persons from the premises save those specially trained and equipped to deal
with brown asbestos until such time as the asbestos had been removed and the
premises made safe. Failure to do that would have involved a breach of
statutory duty. The appellants could not have actually occupied the premises
for any commercial purpose without being in breach of their duty under section
4(2) of the Act of 1974. Had they done so or allowed others to do so they
would, in my judgment, have been guilty of a criminal offence.
If I am right
about those matters then it is artificial and unreal to say that the appellants
were not prohibited by law from occupying the hereditament or allowing it to be
occupied, simply because the 1974 Act is not framed in terms that ‘the entry to
premises in which there is free asbestos is hereby prohibited’. The law should
and does require the courts to look at the reality of the situation which
existed on March 30 1984.
In my
judgment, the appellants are on equally strong ground under para 2(b) of
Schedule 1. The premises were kept vacant between March 30 1984 and May 21 1985
because of the prohibition notice served on March 30 1984.
There is no
question but that the service of the notice was action on behalf of the
respondent local authority. It sought to prohibit the execution of building
refurbishment works in the building unless and until the matters set out in the
schedule to the notice had been remedied. Para 3 of the schedule to the notice
begins: ‘before restoring the area affected to normal use carry out a programme
of environmental sampling . . .’. This wording is revealing because it shows
the inspector would not have allowed any normal use to be made of the premises
until the work listed in the schedule to the notice to remove the hazardous
asbestos and to verify that the atmosphere in the building was clear of
asbestos was completed.
It is true
that the activity prohibited on the face of the notice was ‘The execution of
building refurbishment works’ and that the notice did not prohibit in terms of
occupation or normal use of the premises or the putting of the premises to a
commercial use. But the reason for the notice being in that form was that
building refurbishment works were the only activity then taking place in the
premises. Had other activities been taking place in the premises in March 1984
it is certain that the inspector would have prohibited such other activities by
this notice.
The purpose of
the service of the notice was, therefore, to prohibit the occupation of the
premises and the premises were kept vacant save for those who had to enter to
carry out the remedial work scheduled in the notice as a result of the service
of the notice.
It may well be
that if an owner takes more than a reasonable period of time to carry out the
work necessary to remove a danger such as existed in the present case, a court
would find that after the expiration of such a period the hereditament is no
longer ‘kept vacant by reason of the action of the local authority’ but the
true cause of the building’s being kept vacant is the owner’s failure to remedy
the danger. Such an issue did not arise in this case because there was no
suggestion that the remedial work occupied an unreasonably long period.
Again, in my
judgment, the courts looked at the reality of the situation in the period
between March 30 1984 and May 21 1985. On the facts of this case I would find
the exemption under para 2(b) of Schedule 1 established. Consequently,
with some hesitation I disagree with the reasoning of the metropolitan
stipendiary magistrate expressed in para 18 of his written decision and with
the conclusion that he reached in para 8(b) of the written case.
I would answer
the question posed in the case stated in this way, that the metropolitan
stipendiary magistrate was wrong in law in concluding that the appellants were
not exempt from liability for the rate of the premises by virtue of paras 2(a)
and (b) of Schedule 1 to the General Rate Act 1967 for the period April
1 1984 to May 21 1985, but that the metropolitan stipendiary magistrate was
correct in law in concluding that the appellants were not exempt from liability
for the rate of the premises by virtue of those provisions in the 1967 Act in
respect of the period May 22 1985 to March 31 1986.
Agreeing, STOCKER
LJ said: I agree with the conclusion and reasoning of Roch J. I have
nothing to add to his detailed analysis of the arguments relating to the
questions whether planning permission survived the permission granted to Pan
American, and their occupation in accordance with such permission, or whether
there was any extant planning permission at the relevant date, or whether the
absence of planning consent, if established, indicated that the appellants were
prohibited by law from occupying the hereditament in the rating sense.
I agree with
Roch J that this appeal succeeds in part so far as it relates to the period
over which remedial measures were being carried out to eradicate danger from
loose asbestos and, as in so holding we are differing from the conclusion
expressed by the learned metropolitan stipendiary magistrate, I add some
observations of my own on this aspect of this appeal.
The
magistrate’s finding under 8(b) of the case stated that ‘the service of the
Health and Safety at Work notice dated 31st March 1984 did not constitute
action taken with a view to prohibiting the occupation of the hereditament’ is enlarged
by his reasoning in para 18 of his written decision. By that para he
distinguishes the notice in question from the prohibitory statutory provision
with which the case of Tower Hamlets London Borough Council v St
Katharine by the Tower Ltd [1982] RA 261 was concerned, where the relevant
statutory provision contained a prohibition against occupation, and the notice
in the instant case contained no such prohibition, and that accordingly the
exemption from rate liability created by paras 2(a) and (b) was
not relevant to the notice. He further was of the opinion that, since the
carrying on upon the premises of works of statutory repair and refurbishment
prior to beneficial occupation was not itself occupation for rating purposes,
the principle would apply also to works of carrying out those required by the
safety notice and thus the notice could not itself amount to a prohibition upon
occupation.
It seems to me
that some of the details of the notice must therefore be considered. It was
issued to prevent the carrying out of specific activities — painting and other
refurbishments — owing to the
associated dust and debris containing asbestos. Thus there was loose asbestos
in the atmosphere. At the time of the issue of the notice so far as the
evidence before us is concerned, the only activities being carried out were
those needed to return the hereditament to the condition and state in which it
was prior to its use as an air terminal and that no other forms of occupation
were, at the time, within the purview of the inspector. The schedule to the
notice which prescribes the works to be carried out before the prohibited
activities could be recommended in my view throws light on the extent of the
prohibition. It requires a ‘thorough survey and sampling’ of cladding and other
materials to determine the type and extent of the asbestos, such survey to be
carried out by responsible and experienced specialists. The removal of the
asbestos is to be carried out by similarly qualified persons. Details of the
extensive works to be carried out ‘before restoring the area to normal use’ are
specified, viz to carry out a programme of environmental sampling by
experienced specialists. The concentration of asbestos must not exceed 0.01
fibres per millilitre measured over a four-hour period.
It seems to me
quite clear that no beneficial occupation would be possible or practicable
until these works had been carried out and the area rendered clear of
significant asbestos fibres. In my view, it is inevitable from the extensive
nature of the sampling and remedial work required that had any beneficial
occupation of the premises occurred the notice would have been amended to cover
such beneficial occupation. Moreover, no beneficial occupation could take
place, whether by the appellants themselves or anyone else, without a breach by
the appellants of the provisions of section 4(2) of the Health and Safety at
Work etc Act unless, and until, such ‘measures as it is reasonable for a person
. . . to take . . . to ensure . . . that the premises are safe and without risk
to health’ have been carried out. This duty it seems to me could be discharged
only by carrying out the works prescribed in the respondents’ prohibition notice.
The effect of this notice was, as a matter of common sense and for all
practical purposes, a prohibition against any beneficial occupation of the
hereditament. Thus the fact that the notice itself is confined to the specific
activities being carried out at the date of its issue does not prevent what
seems to me to be an inevitable inference that all activities including any
physical presence were prohibited in fact once it had been served and loose
asbestos fibres found to be in the atmosphere.
We have been
told that the Tower Hamlets case may be the subject of an appeal and
that the respondents reserve their right to argue that it has been wrongly
decided. In my view, by parity of reasoning, section 4(2) of the Health and
Safety at Work etc Act has the same effect as section 34(4) of the London
Building Acts in the Tower Hamlets case even though section 4 of the
former Act contains no express prohibition against occupation as such.
In my view,
therefore, the effect of the service of the prohibition notice by the
respondents was to prohibit the occupation of the hereditament and thus it was
kept vacant by reason of action by, or on behalf of, the respondents and the
exemption from liability for unoccupied rates applied pursuant to the
provisions of para 2(b) of Schedule 1 to the General Rate Act 1967. I
consider that the exemptions under para 2(a) also applied.
For these
reasons and those given by Roch J I would hold that the appellants were exempt
from rates for the period April 1 1984 to May 21 1985.
I agree with
the answers given by Roch J to the questions posed in the case stated.
The
appellants were awarded 65% of the costs of the appeal and relieved of 65% of
the £5,000 costs they were ordered to pay in the magistrate’s court.
