Rating – Power station with onsite sports club building – Club using building rent-free – Club operated by committee in accordance with club rules – Building entered in rating list as separate hereditament – Whether building to be rated as part of electrical hereditament – Whether appellant power company or club in paramount occupation of building – Appeal dismissed
The appellant company owned a power station on a site that incorporated a sports club building that had been built in 1985 within the perimeter fence of the station. The building comprising a function room, sports facilities, a bar and a kitchen, replaced a temporary structure that had been sited outside the perimeter and in which the club had operated since the power station began operating in 1970. The building had its own car park, with entrances from the power station site and directly from the highway, and was surrounded by a security fence. The club had no formal tenancy or licence, but successive owners of the site had allowed the club to use the building rent free in accordance with the club rules. Power station employees could apply for membership and the club was managed by a committee. The successive owners of the power station provided the equipment for the gym, use of which was limited to those who had been approved by an occupational nurse and the power station management. The owners occasionally used the club premises for meetings. Each owner insured the building under its policy for the entire site and paid for utilities and repairs.
In 2005, in response to a proposal made by the respondent valuation officer, the Rating Tribunal decided that the sports club should be entered into the 2000 rating list as a separate hereditament valued at £42,375. The appellant, as the current owner of the site, appealed. It contended that the club should continue to be treated as part of the electricity hereditament because the building was, at the relevant date occupied by the appellant, which provided the building for the welfare of its employees, controlled it and occupied it for that purpose through the medium of the club. The respondent submitted that the club was an unincorporated association with a separate identity from that of the appellant and that it had the immediate and direct control of the building.
Decision: The appeal was dismissed.
The case turned on whether the company or the club was in paramount occupation of the building: Westminster City Council v Southern Railway Co Ltd [1936] AC 511 applied. In attributing to itself the purpose for which the building was occupied, the appellant was effectively contending that the club was acting as its agent. However, authority was against a claim of occupancy based upon agency. The question of who was in paramount occupation fell to be determined not by reference to the purpose of occupation but of who was in control: Solihull Corporation v Gas Council [1962] 1 WLR 583, Case (VO) v British Railways Board (1972) 223 EG 941 and Squibb (VO) v Vale of the White Horse District Council [1982] RA 271 applied.
On the evidence, the club was the paramount occupier of the premises at the relevant date. Although successive owners provided the premises free of charge, so that the club was a mere licensee, the club had enjoyed occupation for its own purposes for as long as the licence continued and had controlled the day-to-day use of the premises through its officers. The appellant’s and its predecessor’s intervention in the management of the club was infrequent and they had rarely used the premises for company-related meetings. The reason for locating the building within the perimeter of the power station site was not to give to successive companies control over who might use the premises or how they might be used. The degree of control exercised by those companies over the use of the gym was minimal with regard to the premises as a whole and the activities carried on there, which were otherwise controlled by the club. Consequently, the club, and not the appellant, occupied the hereditament.
Richard Glover (instructed by Ruddle Merz Ltd) appeared for the appellant; David Forsdick (instructed by the legal department of HM Revenue & Customs) appeared for the respondent.
Sally Dobson, barrister
