Saint Benedict’s Land Trust Ltd v King’s Lynn and West Norfolk Borough Council

Rating – Non-domestic rates – Case management – Defendant billing authority issuing summons in magistrates’ court seeking liability order against claimant for unpaid NDR – Claimant seeking declaratory relief against defendant in relation to entitlement to charitable relief – Defendant applying to strike out claim – Whether just to strike out claim – Whether proceedings stayed pending determination of magistrates’ court proceedings – Application dismissed In April and May 2023, the defendant billing authority issued demands for non-domestic rates (NDR) in respect of the hereditament known as Unit 5, Venus Court, Oldmeadow Road, Hardwick Industrial Estate, Kings Lynn, Norfolk. The demands were issued to the claimant as rateable occupier on the basis that it had entered into a “meanwhile” lease with the landlord on 3 January 2023. The defendant issued a summons in the magistrates’ court seeking a liability order against the claimant in respect of unpaid NDR for the hereditament for the relevant period (3 January 2023 to 31 March 2024). On the same date the defendant confirmed that it did not consider the claimant to be eligible for charitable relief from NDR. In September 2023, the defendant lodged a formal application with the defendant seeking charitable relief. In November 2023, the defendant set out in writing the reasons for refusing charitable relief. The hearing of the summons before the magistrates was adjourned and the trial was listed to be heard in summer 2025. In March 2024, the claimant issued a Part 8 claim seeking declaratory relief against the defendant in relation to its entitlement to charitable relief; and, more widely, as to the lawfulness of the conduct of rating authorities generally issuing summonses in relation to NDR. The defendant applied to strike out that claim. Held: The application was dismissed. (1) Liability for NDR under the Local Government Finance Act 1988 arose either pursuant to: section 43 of the 1988 Act, by virtue of being in rateable occupation; or section 45, by virtue of being the owner of a hereditament. Section 43(6), as in force during the relevant period, applied where: “on the day concerned (a) the ratepayer is a charity or trustees for a charity and the hereditament is wholly or mainly used for charitable purposes (whether of that charity or of that and other charities)”. Where a ratepayer fell within section 43(6)(a), their liability for NDR would be 20% of the total otherwise due. Save in the case of registered charities with the benefit of section 37(1) of the Charities Act 2011, whether the ratepayer was a charity would have to be determined by reference to its constitution and/or (if there was no constitution or the constitution was inconclusive) by a review of its activities and the purposes they served overall, including an assessment whether the public benefit requirement was satisfied: Merton London Borough Council v Nuffield Health [2023] EGLR 28 applied. Once satisfied that the ratepayer was a charity, the court had to determine as a matter of fact to what “main use” the hereditament was put and then determine whether that main use was in furtherance of (or was sufficiently closely connected with) the purposes of the charity ratepayer or of the ratepayer and other charities. (2) CPR 3.4(2)(b) provided that the court might strike out a statement of case if it appeared to the court that the statement of case was an abuse of the court’s process or was otherwise likely to obstruct the just disposal of the proceedings; or there had been a failure to comply with a rule, practice direction or court order. Under CPR 8.1(2), a claimant might, unless any enactment, rule or practice direction stated otherwise, use the Part 8 procedure where they sought the court’s decision on a question which was unlikely to involve a substantial dispute of fact. (3) In R (Public Health England) v Harlow District Council [2021] PLSCS 73; [2021] 4 WLR 65, the court set out a protocol for the resolution of disputes about the occupation of premises in the rating context  That protocol made clear the proceedings in the magistrates’ court should be pursued first. The subject matter of the first declaration in the Part 8 claim was undoubtedly coincident with the scope of the existing proceedings in the magistrates’ court.  The protocol in annex B to the Harlow decision strongly indicated that those proceedings should be dealt with first. The defendant was a public body and the first declaration sought amounted in effect to a complaint about its act or decision in refusing the defendant charitable relief in respect of the hereditament. Such an issue might be brought before the administrative court by way of proceedings for judicial review, subject to any procedural questions including timing. For the claimant to bring a Part 8 claim for a declaration as to its entitlement to charitable relief, in relation to its rateable occupation of the hereditament, was not of itself abusive. Entitlement to the relief was a private law matter. (4) In considering how to case manage the claim for the first declaration sought for discretionary declaratory relief, the court had to take account as a relevant factor the delay beyond the usual time limit for seeking judicial review. It should also take account that there was an alternative route to achieving the same result by succeeding in the defence to the summons in the magistrates’ court: Carter Commercial Developments v Bedford Borough Council [2001] EWHC Admin 669; [2001] PLSCS 186 considered. The existence of factual disputes including one that, if pursued, would require an amendment to the claim form if pursued, gave rise to the possibility that the Part 8 claim should, if not otherwise disposed of, be ordered to continue as if commenced by Part 7 with directions for pleadings. That did not amount to a failure to comply with CPR 8.1(2) which would warrant the proceedings being struck out; that would not be a proportionate remedy for a procedural failure which might be remedied. (5) The claimant had offered no cogent explanation for commencing the present proceedings in parallel to the magistrates’ court proceedings seven months after the commencement of those proceedings. The proper case management course was to direct that the present proceedings be stayed pending the determination of the magistrates’ court proceedings and the resolution of any appeal from that determination. It would then be for the claimant to consider whether to pursue the balance of the declaratory relief sought and, if so, to have the remaining issues in the present proceedings transferred to the Administrative Court. Neil Berragan (instructed by H&C Associates) appeared for the claimant; Alex Worthington (of Greenhalgh Kerr solicitors) appeared for the defendant. Eileen O’Grady, barrister Click here to read a transcript of Saint Benedict’s Land Trust Ltd v King’s Lynn and West Norfolk Borough Council