General Rate Act 1967–Appeal from dismissal by justices of claim for unpaid rate surcharge on unused commercial building–Definition of ‘commercial building’–Justices’ ‘bewilderment’–Building not a commercial building, but a dwellinghouse–Appeal dismissed
This was an
appeal by way of case stated by justices sitting at Kensington on February 12
1976 when they dismissed a complaint preferred by the appellants, the Royal
Borough of Kensington and Chelsea, against the respondents, the Victoria Wine
Co Ltd, for non-payment of £852.42 rating surcharge made on premises comprising
the first, second and third floors of premises at 18 Notting Hill Gate, Notting
Hill, pursuant to section 17A of the General Rate Act 1967 (inserted by section
16 of the Local Government Act 1974).
Guy Roots
(instructed by A G M Ellery, Borough Solicitor) appeared for the appellant
local authority; J Grove (instructed by Lovell, White & King) represented
the respondents.
Giving
judgment, EVELEIGH J said that by section 17A(1) of the General Rate Act 1967
‘If for a continuous period exceeding six months a commercial building is not
used for the purpose for which it was constructed or has been adapted, its
owner shall pay in respect of that period (the ‘period of non-use’) a surcharge
additional to the rates. . . .’ Section
17B defined ‘commercial building’ as referring to a hereditament not being a
dwellinghouse. Section 115, the definition section, stated that
”dwellinghouse’ means a hereditament which, in accordance with Schedule 13 to
this Act, is used wholly for the purposes of a private dwelling or private
dwellings.’ Schedule 13, paragraph 2(1),
made reference to a building which was used for the letting of rooms: ‘If in
the case of a hereditament which is used for the letting of rooms singly for
residential purposes there is used for such lettings the whole, or
substantially the whole, of the available accommodation . . . that hereditament
shall be
dwellings. . . .’
The relevance
to the letting of single rooms emerged from the facts found by the justices.
They found that the building in the present case had not been used for a period
of six months; that it was built as a single dwellinghouse in about 1900; that
the interior state of repair and decoration was poor and that, in the condition
as they found it, there was no reason why it could not be used either as a
dwellinghouse or for the letting of rooms. The property had been purchased by
the respondents in 1974 when they became lessees. The ground floor was
separately occupied as a shop. The lease of the first, second and third floors
provided that the respondents should not underlet except with the agreement of
the landlords. In the course of its life the building had been used for the
purpose of letting single rooms. The date when that ceased was not known. At
the date the respondents took over the lease there were gas meters in each of
the rooms including the bathroom. Since taking over the respondents had, at all
times and in good faith, intended to carry out works necessary for the building
to be used as a dwellinghouse or two flats and they had done their best to
procure the carrying out of such works but, at the time of the hearing before
the justices, the designs and costs had not been finalised. On May 28 1975 the
respondents applied for, and were granted, planning permission for conversion
of the premises so as to form one one-bedroomed flat on the first floor and two
two-bedroomed flats on the other two floors.
In these
circumstances the justices had to consider whether it was a commercial building
and, on referring to the Act, they found themselves in difficulties. One could
summarise the effect of the Act in the following way: section 17A imposed a
surcharge upon commercial property which was not in use. Section 17B defined
‘commercial building’ as one which was not ‘a dwellinghouse.’ The definition section defined ‘dwellinghouse’
as in effect a house for dwelling in unless let in single rooms. One could
understand the bewilderment of the justices when they found they had to
determine whether to impose a surcharge on a building not in use and had to ask
themselves the question ‘what was it used for?’
It was not surprising
that the justices decided to have nothing to do with the statutory definition
but held, as a matter of commonsense, that the building was not commercial. But
the definition in the Act had to be complied with and the words had to be given
their proper meaning. The definition section was, in truth, describing the kind
of building concerned generally. Thus, the phrase ‘is used’ meant ‘existing for
the use.’ It did not mean that the use
was actually being carried on. The magistrates had come to the correct
decision. They had considered all the circumstances and there was ample
evidence to support their conclusion. The appeal should be dismissed.
LORD WIDGERY
CJ and WIEN J agreed and the appeal was dismissed with costs.
