Residential property – Multiple occupation – Council tax – Appellants being registered owners of property – Appellants contending whole premises let to bona fide tenants under tenancy agreements making them liable for council tax – Respondents questioning genuineness of tenancy agreements – Tribunal concluding premises in multiple occupation and holding appellants responsible for council tax – Whether tribunal erring in law – Appeal dismissed
The appellants were the registered freehold owners of a property in Ilford, Essex. For the period from 1 January 2005 to 31 December 2010, the respondent local authority considered that the premises were in multiple occupation within Class C of regulation 2 of the Council Tax (Liability of Owners) Regulations 1992. Accordingly, they took the view that, by virtue of section 8 of the Local Government Finance Act 1992 and regulation 2A of the 1992 regulations, the appellants were liable for council tax in respect of the premises.
The appellants contended that the premises did not fall within Class C of regulation 2 at any material time. They argued that, throughout the relevant period, the whole of the premises were let to bona fide tenants who, by virtue of section 6 of the 1992 Act, were responsible for council tax. Further, even if the premises did fall within Class C, the appellants denied that they were responsible for council tax payments, relying upon documentation including copies of tenancy agreements for the seven calendar years in question. Each of those agreements was for an assured shorthold tenancy of the whole of the premises and named one or more persons as the tenant for each year. However, the respondents relied on documents which cast doubt upon the genuineness of the tenancy agreements.
The matter came before the Valuation Tribunal which concluded, on the evidence, that the premises did fall within Class C during the relevant years and were in multiple occupation so that the appellants were liable to pay the council tax due for the whole period.
The appellants appealed, arguing that the premises had never been in multiple occupation and that, for each of the relevant calendar years, the whole of the premises were let to the persons named in the tenancy agreements. The first appellant maintained that he had had no beneficial interest in the premises during the relevant period and could not be held liable for council tax. The second appellant acknowledged that he held a beneficial interest in the premises but argued that he should not be held liable for any council tax during the years in question since he had played very little, if any, part in the control or running of the premises.
Held: The appeal was dismissed.
(1) The starting point for the tribunal had been the tenancy agreements relied upon by the appellants. Upon the assumption that the agreements were genuine, they demonstrated conclusively that, during the relevant period, the whole of the premises had been let to named tenants so that they could not have been in multiple occupation during any part of the period. However, there could be no doubt that the evidence adduced on behalf of the respondents had cast considerable doubt upon the genuineness of the agreements. Accordingly, the tribunal had not erred in law when it decided that it should consider the genuineness of the tenancy agreements produced by the appellants given the evidence adduced by the respondents. Further, the tribunal had been entitled to conclude that it was not satisfied that the agreements were genuine in the face of the evidence which tended to prove the contrary. The tribunal had been faced with a conflict in the documentary evidence which was available and it had been necessary for the conflict to be resolved: Watts v Preston City Council [2009] EWHC 2179 (Admin) applied; UHU Property Trust v Lincoln City Council (3 March 2000) [2000] RA 419 and Naz v Redbridge London Borough Council [2013] EWHC 1268 (Admin) considered.
(2) The effect of section 8(3), (4) and (6) of the 1992 Act was that the owner of a house in multiple occupation should be liable to pay council tax unless the 1992 Regulations provided that a different person should be liable. By virtue of regulation 2A, the person liable to pay the council tax was the person who had a relevant material interest which was not subject to a relevant material interest inferior to it or, if there was no such person, the person who had a freehold interest in the whole or any part of the dwelling. The words “relevant material interest” meant a freehold or leasehold interest in the whole of the dwelling.
(3) The phrase freehold interest was a legal term of art, describing one of the two legal estates in real property. By defining ownership by reference to the person or persons holding the freehold estate in the relevant premises, Parliament had clearly intended that liability for council tax in respect of premises within Class C should fall upon the owner the legal estate in the premises i.e. the registered owner. If there was more than one such owner they were jointly and severally liable.
(4) In the present case, at all material times the appellants had a freehold interest in the whole of the dwelling and were named as joint registered proprietors in the Land Registry. As regards the first appellant, since there had been no relevant inferior interest at any material time, the person holding the freehold interest was the person liable to pay council tax. The fact that the second claimant had played a limited role in the running of the premises or in controlling how it was used was no basis for concluding that he was not liable for the council tax during the period in question. No authority had been produced to suggest that the freehold owner of premises was to be excused liability for council tax in respect of a house in multiple occupation simply because he had played little part in the running or control of the premises.
The appellants appeared in person; Jane Hodgson (instructed by Legal and Constitutional Services) appeared for the respondents.
Eileen O’Grady, barrister
Residential property – Multiple occupation – Council tax – Appellants being registered owners of property – Appellants contending whole premises let to bona fide tenants under tenancy agreements making them liable for council tax – Respondents questioning genuineness of tenancy agreements – Tribunal concluding premises in multiple occupation and holding appellants responsible for council tax – Whether tribunal erring in law – Appeal dismissedThe appellants were the registered freehold owners of a property in Ilford, Essex. For the period from 1 January 2005 to 31 December 2010, the respondent local authority considered that the premises were in multiple occupation within Class C of regulation 2 of the Council Tax (Liability of Owners) Regulations 1992. Accordingly, they took the view that, by virtue of section 8 of the Local Government Finance Act 1992 and regulation 2A of the 1992 regulations, the appellants were liable for council tax in respect of the premises.The appellants contended that the premises did not fall within Class C of regulation 2 at any material time. They argued that, throughout the relevant period, the whole of the premises were let to bona fide tenants who, by virtue of section 6 of the 1992 Act, were responsible for council tax. Further, even if the premises did fall within Class C, the appellants denied that they were responsible for council tax payments, relying upon documentation including copies of tenancy agreements for the seven calendar years in question. Each of those agreements was for an assured shorthold tenancy of the whole of the premises and named one or more persons as the tenant for each year. However, the respondents relied on documents which cast doubt upon the genuineness of the tenancy agreements.The matter came before the Valuation Tribunal which concluded, on the evidence, that the premises did fall within Class C during the relevant years and were in multiple occupation so that the appellants were liable to pay the council tax due for the whole period. The appellants appealed, arguing that the premises had never been in multiple occupation and that, for each of the relevant calendar years, the whole of the premises were let to the persons named in the tenancy agreements. The first appellant maintained that he had had no beneficial interest in the premises during the relevant period and could not be held liable for council tax. The second appellant acknowledged that he held a beneficial interest in the premises but argued that he should not be held liable for any council tax during the years in question since he had played very little, if any, part in the control or running of the premises. Held: The appeal was dismissed. (1) The starting point for the tribunal had been the tenancy agreements relied upon by the appellants. Upon the assumption that the agreements were genuine, they demonstrated conclusively that, during the relevant period, the whole of the premises had been let to named tenants so that they could not have been in multiple occupation during any part of the period. However, there could be no doubt that the evidence adduced on behalf of the respondents had cast considerable doubt upon the genuineness of the agreements. Accordingly, the tribunal had not erred in law when it decided that it should consider the genuineness of the tenancy agreements produced by the appellants given the evidence adduced by the respondents. Further, the tribunal had been entitled to conclude that it was not satisfied that the agreements were genuine in the face of the evidence which tended to prove the contrary. The tribunal had been faced with a conflict in the documentary evidence which was available and it had been necessary for the conflict to be resolved: Watts v Preston City Council [2009] EWHC 2179 (Admin) applied; UHU Property Trust v Lincoln City Council (3 March 2000) [2000] RA 419 and Naz v Redbridge London Borough Council [2013] EWHC 1268 (Admin) considered.(2) The effect of section 8(3), (4) and (6) of the 1992 Act was that the owner of a house in multiple occupation should be liable to pay council tax unless the 1992 Regulations provided that a different person should be liable. By virtue of regulation 2A, the person liable to pay the council tax was the person who had a relevant material interest which was not subject to a relevant material interest inferior to it or, if there was no such person, the person who had a freehold interest in the whole or any part of the dwelling. The words “relevant material interest” meant a freehold or leasehold interest in the whole of the dwelling.(3) The phrase freehold interest was a legal term of art, describing one of the two legal estates in real property. By defining ownership by reference to the person or persons holding the freehold estate in the relevant premises, Parliament had clearly intended that liability for council tax in respect of premises within Class C should fall upon the owner the legal estate in the premises i.e. the registered owner. If there was more than one such owner they were jointly and severally liable.(4) In the present case, at all material times the appellants had a freehold interest in the whole of the dwelling and were named as joint registered proprietors in the Land Registry. As regards the first appellant, since there had been no relevant inferior interest at any material time, the person holding the freehold interest was the person liable to pay council tax. The fact that the second claimant had played a limited role in the running of the premises or in controlling how it was used was no basis for concluding that he was not liable for the council tax during the period in question. No authority had been produced to suggest that the freehold owner of premises was to be excused liability for council tax in respect of a house in multiple occupation simply because he had played little part in the running or control of the premises. The appellants appeared in person; Jane Hodgson (instructed by Legal and Constitutional Services) appeared for the respondents.Eileen O’Grady, barrister
