Liability for general rates on factory premises during period when former employees had seized physical control and excluded liquidator of company–Whether company was in occupation–Analysis of ingredients of rateable occupation–Company not in occupation–Members of "work-in committee" in occupation–Some persons other than company in rateable occupation–Company not liable for rates during period in question–Borough’s appeal dismissed
This was an
appeal by the London Borough of Southwark against the decision of Slade J that
the Briant Colour Printing Co Ltd, which was in liquidation, was not liable for
£14,703 general rates in respect of a period during which former employees of
the company were in physical control of the factory premises in pursuance of a
"work-in." The borough claimed
that the rates constituted an expense properly payable by the liquidator in
priority to the claims of creditors.
W J Glover QC
and Viscount Colville (instructed by J B Parker, deputy town clerk and
solicitor, London Borough of Southwark) appeared on behalf of the appellants; D
J Nicholls QC and W A Blackburne (instructed by W F Prior & Co) represented
the respondents.
Giving
judgment, BUCKLEY LJ said: This is an appeal from the dismissal by Slade J of
an originating summons by which the present appellants sought a declaration
that a sum of £14,703.28, representing general rates of the London Borough of
Southwark on certain factory premises of the respondent company in the Old Kent
Road for the period from June 21 1972 to June 14 1973, is an expense properly
incurred by the liquidator of the company in the course of the winding-up of
the company, and that the sum in question is properly
of the company in the winding-up. The learned judge held that the company was
not rateable in respect of the factory, as I shall call it, during the period
referred to, and the rating authority appeals from his decision.
The company
carried on a printers’ business in the factory. On June 21 1972 a resolution
was passed for the voluntary winding-up of the company, and Mr Patrick
Granville White was appointed liquidator. He thereupon, on that day, gave
notice to all employees of the company determining their employment, and the
employees upon the same day entered into occupation of the factory adversely to
the company and its liquidator, and so remained until June 14 1973, when the
factory was sold, the sale being completed on that date. The liquidator, in his
first affidavit filed on behalf of the company, deposes to the fact that on
June 21 1972 the former employees seized physical control of the premises and
the plant and machinery there, and thereafter maintained control thereover by
means of a 24-hour shift system, calling themselves the "Briant Colour
Printing Joint Chapels Work-In."
The work-in was organised and directed by a committee calling itself the
"Joint Chapels Work-In Committee," to which I shall refer as
"the committee," and that, according to the liquidator’s affidavit,
was a committee elected by the ex-employees of the company. As I understand it,
the membership in fact consisted of the "fathers and mothers," so-called,
of the chapels of the unions connected with those who worked in the factory.
The liquidator goes on in his affidavit to say that the committee denied his
authority as liquidator and claimed that the factory was under workers’
control, and that during the relevant period the work-in occupants of the
premises, that is to say the former employees of the company, who were
occupying and working in the factory, undertook contracts and printing on their
own account and defrayed the resulting costs out of their own resources. None
of these activities, he says, was in any way undertaken with his permission or
with his connivance.
At the date of
the liquidation the company had work in hand, some completed and some
uncompleted, valued at approximately £20,000. Completion and delivery of this
work was desirable, both to realise the assets of the company and to prevent
claims in damages arising which might be set off against the debts owed to the
company by the customers in question. But the committee refused to complete the
work, or to deliver the completed work, except upon terms that the liquidator
should pay them 25 per cent of the total invoiced value of the work.
Consequently, in the interests of securing something from this work, the
liquidator was forced to agree to make payment of such an amount to the
committee; he so secured the release of the completed work and the completion
of the uncompleted work. That occupied about two weeks in the latter half of
July 1972. The proceeds of the goods so disposed of amounted to £15,600, part
of the £20,000 to which I referred earlier, and £3,900, a quarter of the
receipts, was paid to the committee in pursuance of the agreement into which
the liquidator had entered with them. But the balance of the orders which were
in hand at the date when the workers took possession of the factory was lost on
account, the liquidator says, of the unco-operative attitude of the committee
and the consequent failure to meet delivery dates.
When the
company went into liquidation it had in its possession certain art work,
transparencies and other items used in colour printing, which were not the
property of the company but the property of customers of the company. The
committee assumed control of these items and refused to release them, which
naturally caused the liquidator difficulties. On June 22 1972 the liquidator,
with his assistant, went to the factory, which was locked; he stated that he
wished to enter; he was refused entrance to the factory; he asked if those who
were in the factory were denying him access, and the chairman of the committee
said that they were. From that date until June 14 1973, the liquidator and his
agents were denied all access to the factory. He says that in consequence of
this the liquidation of the company has been substantially impeded; in
particular it had been his wish, and that of the committee of inspection in the
liquidation, that if possible the company’s premises should be disposed of as a
going concern. In a later affidavit he says that he did not really think that
he would be able to sell the premises as a going concern. I would infer from
the fact that he had dismissed all the staff but that the plant and machinery
were still in the factory that what the liquidator really had in mind was to
sell the factory with the plant and machinery in situ in the hope that somebody
would take it over, perhaps not technically as a going concern but as a factory
which could be put into immediate operation. He advertised the factory for sale
at some cost. Several approaches were made to him by prospective purchasers,
but he was unable to conclude the sale, largely, he says, because he was unable
to guarantee vacant possession on completion. For example, in December 1972 he
had an offer of £272,500 from a particular prospective purchaser, provided
vacant possession could be given, but this was withdrawn on account of his
inability to ensure that the purchasers would obtain vacant possession on
completion. The liquidator says that the sale of the factory was further
hindered by the refusal of the committee to allow certain prospective
purchasers to inspect the premises. The committee was anxious to ensure that
the factory would be acquired by somebody who would continue to employ the
existing work force; it would seem that they were unwilling to allow any
purchasers who did not answer to that description to have any facilities to see
the factory, nor would they have assisted in carrying out a sale to any such
purchaser.
The liquidator
goes on in his affidavit to say: "Although excluded from the factory
premises and impeded in the work of the liquidation as aforesaid I deliberately
refrained from instituting proceedings for possession until January 1973. This
decision was approved by my committee of inspection." He feared that proceedings for possession, if
commenced prematurely, would result in a violent confrontation between members
of the work-in (that is to say, the former employees, who were in occupation of
the factory) and their supporters on the one hand, and the police and the
liquidator’s agents on the other. He also feared that upon enforcing any order
for possession the plant and machinery in the factory might be damaged.
Eventually, in January 1973, he did launch proceedings for possession; he
obtained a judgment for possession, but in fact he never sought to enforce that
judgment because by that time a prospective purchaser had come upon the scene,
who did eventually buy the factory; he was a purchaser who was acceptable to
the committee and proposed to continue to employ the work force. The fact that
shortly after the purchase had been completed he dismissed all the work force
is not a matter which was foreseen, presumably, by those who were concerned in
the work-in. This purchaser entered into a contract to buy the factory and the
plant and machinery for £260,000 and the purchase was completed on June 14
1973, as from which date there is no dispute that it was the purchaser who was
liable for the rates upon the factory.
The liquidator
further states in his affidavit that the refusal of the committee to allow the
books and papers of the company to be taken from the factory created
unnecessary complication in the collection of the company’s book debts and the
completion of the invoicing of the work in progress. In order to obtain these books
and papers he had recourse to an application to the court for an order under
the Companies Act 1948, section 268, addressed to the chairman of the
committee. The chairman failed to comply with that order and
by the sale to the purchaser and need not be mentioned further. The liquidator
says that the work-in has led to a substantial loss on realisation of some
£40,000 to £65,000, and in the result the unsecured creditors, whose debts
total some £147,500, and many of whom are small traders, will receive nothing.
The committee failed, or refused, to co-operate in any way with the liquidator
until July 13 1972–that is to say, for upwards of three weeks after they first
occupied the factory–and it was only then, on July 13 1972, that an agreement
was reached whereby they agreed to hand over the completed but undelivered
work, and to complete the uncompleted work in progress.
In these
circumstances the question which arises is: who, if anyone, is liable for the
general rate upon the factory in respect of the period from June 21 1972 to
June 14 1973? The rate is charged by
section 16 of the General Rate Act 1967, which provides that "Subject to
the provisions of this Act, every occupier of property of any of the following
descriptions"–namely, lands, houses, coalmines and so forth; I need not
read them all–"shall be liable to be assessed to rates in respect of the
hereditament or hereditaments comprising that property according to the rateable
value or respective rateable values of that hereditament or those hereditaments
determined in accordance with the provisions of this Act." We are not concerned with section 17 of the
Act, which relates to rates in respect of unoccupied property. The Act contains
no definition of the word "occupier."
The appellants contend that a person may be an occupier within the
meaning of section 16, notwithstanding that he is not in actual occupation, if
he is the legal owner of the hereditament. In John Laing & Son Ltd v
Assessment Committee for the Kingswood Assessment Area [1949] 1 KB 344
Tucker LJ, at p 350, set out in his judgment certain ingredients which Mr
Michael Rowe, as he then was, had contended were the four necessary ingredients
of rateable occupation, in these terms: "First, there must be actual
occupation; secondly, that it must be exclusive for the particular purposes of
the possessor; thirdly, that the possession must be of some value or benefit to
the possessor; and fourthly, the possession must not be for too transient a
period." The appellants contend
that the company by its liquidator fulfils all of those four requirements. They
say that there was actual occupation by the company by reason of the fact that
the company’s plant and machinery remained in the factory where, even if there
had been no seizure of the factory by the work force, it is to be supposed that
the liquidator would have left the machinery and plant until sale. They say
that there was also actual occupation by the work force or by the committee,
but they dispute that that occupation was occupation of such a nature as would
make anyone other than the company liable to be rated in respect of the
factory.
In this
connection the appellants have relied upon three cases: Borwick v Southwark
Corporation [1909] 1 KB 78; Harter v Overseers of Salford
(1865) 6 B&S 591; and Associated Cinema Properties v Hampstead
Borough Council [1944] KB 412. In my judgment all those cases are
distinguishable on their facts from the present case, on grounds that I shall
shortly state. In Borwick v Southwark Corporation an
industrialist had acquired factory premises which he had fitted up to the
extent that those premises would be readily available for the transfer into
them of his plant and machinery, and of his manufacturing business, in the
event of an emergency. The factory was thus in the nature of a standby factory,
but it had no plant and machinery in it, except the necessary fixtures for the
ready establishment of the company’s plant and machinery, so that it could be
put into working operation. This was not a case in which there was any
competing use of the factory by anybody else; the premises were entirely under
the control of the owner, and were partially equipped. They were ready to be
used by the owner at any moment in the event of an emergency arising which
would make it desirable from his point of view to make use of them. The court
treated the question of occupation as a question of fact–that appears clearly
from the judgment of Bigham J–and they reached the conclusion that the owner
was in actual occupation of the standby factory. The benefit which he obtained
from it was of course the advantage of having available a standby factory to
which he could, at a moment’s notice, transfer his business. In Harter v
Overseers of Salford a mill business had been discontinued and the owner
had left the plant and machinery used in that business in the mill. Again,
there was no competing use of the premises by anyone other than the owner; the
premises were wholly under the control of the owner and it was held that the
owner was rateable in respect of the mill, not as a mill but as a warehouse
where he was storing his plant and machinery. The question in debate in that
case was really not one of occupation but whether the occupation was of a
beneficial character or not. In the third of the cases I have mentioned, the Associated
Cinema Properties case, the plaintiffs acquired office accommodation as
standby accommodation, which was left unfurnished. The question was whether
there was sufficient to justify their being held to be in actual occupation of
the premises. It was held that on the facts of that case they had no more than
an intention to occupy the premises and that was held to be insufficient to make
them liable to be rated. In none of those three cases was there any question of
a competing use; in none of them was the dominion of the owner over his own
property in any way interfered with, and on those grounds it seems to me that
those three cases are clearly distinguishable from the present case.
The appellants
say that the first of the four essential elements of occupation listed in
Tucker LJ’s judgment in the John Laing case can be satisfied by
occupation by anyone, whether it be the owner of the property or any other
person; it need not, they say, be the occupation of the person who in fact
becomes liable to be rated in respect of the property. In the John Laing
case, Tucker LJ, in the passage which I have read, was rehearsing the
submissions which had been made by counsel to the court, and he said that there
did not appear to be any controversy with regard to them. He was not, I think,
in any way intending to modify what had been said by counsel or, I would think,
to invest it with judicial authority; it certainly does not have the sort of
judicial authority that a decision by a court upon a point which had been
contested before it, and argued, has judicial authority. It is therefore
important to see what it is that counsel is reported to have submitted, and
that we find at page 348 of the report, where Mr Rowe is reported to have said:
"There are four essential elements in rateable occupation. There must in
the first place be actual possession by the alleged occupier"–those words,
"by the alleged occupier," do not find a place in Tucker LJ’s
re-rehearsal of Mr Rowe’s submission, but I do not myself think that any
significance is to be attached to their omission by the learned Lord Justice.
Then Mr Rowe goes on to say: "Secondly, the possession must be exclusive
for the particular purposes of the occupier. Thirdly, the possession must be of
some use or value or benefit to the possessor, and fourthly, the possession
must not be for too transient a period."
Jenkins LJ, in his judgment on p 357, says: "Adopting Mr Rowe’s
four factors or ingredients of rateability, it is obvious on the facts here
that the first is satisfied, because the contractors were clearly in actual
possession of the hereditaments claimed to be rateable." Jenkins LJ certainly is not intending in any
way to modify the formulation put forward by Mr Rowe in his argument. That was
not a case in which there was any competing occupation; the question was
whether building contractors were in occupation for their own purposes, or
whether the Crown was in occupation as building owner. Tucker LJ, at page 351,
said this:
Mr Williams
argues that, on examination of the contract between the parties, it will be
found that they are not in exclusive possession. Although at the outset this
case was presented rather as one in which there were competing occupants, or
there might be persons who could be regarded as competing occupants, and the
question was whose was the paramount occupancy, I think the point is more
accurately stated in the way in which Mr Williams put it in his final address:
not whether there are competing occupants, but is there any real occupation by
the appellants, or is not the true position that they are really in occupation
on behalf of someone else, namely, the Crown, for whose purpose, he says, they
are on the site carrying out the works in question.
The object of
the inquiry was there, and must always be, to discover who is rateable. In my
opinion it is the person sought to be rated who must be shown to be in actual
occupation, and that is what Mr Rowe suggested. This need not involve the
personal physical presence of the party; a very slight degree of use by an
owner of property may suffice to result in his being held to be in occupation,
but actual occupation by someone else, unless that occupation can be said to
constitute vicarious occupation by the owner, cannot in my judgment result in
the owner’s being rateable. The appellants say that the liquidator was in
actual occupation, using the premises for the only purpose for which he would
wish to retain them, that is to say, to store the plant and machinery there
pending a sale. In my view this is a very unreal approach to the facts. The
liquidator was not retaining the factory for this purpose: he was not using the
factory at all. He was wholly excluded from it and was permitted no access to
the plant and machinery, which was in fact being wrongfully detained and used
by the work force in carrying on a business of their own in the factory. Unless
the authorities otherwise require, I would hold that the committee, or the work
force, had actual occupation and not the liquidator. But the appellants say
that the liquidator must be presumed to have been in actual occupation
notwithstanding that the committee, or the work force, may have been in de
facto exclusive occupation. The appellants assert that there is a
presumption in such cases, which Mr Glover has formulated in this way: he says
that the owner in possession (by which I do not mean physical occupation but
legal possession) is presumed to be in rateable occupation unless that
presumption is rebutted, which it can be by showing either that there is no
actual occupation by anyone, or that someone other than the owner is in
rateable occupation, or that the owner’s occupation is not a beneficial
occupation. Those are three tests which are obviously related to the first
three of the so-called essential ingredients referred to in the John Laing
case. Alternatively he submits that the presumption is that the owner is in
exclusive occupation and that that presumption can only be rebutted by showing
that someone else is in rateable occupation. In connection with that submission
he referred us to certain passages in Ryde on Rating, 13th ed, at p 42.
In support of
that submission he relied upon what was said by Lord Atkinson in Winstanley
v North Manchester Overseers [1910] AC 7, and also upon what was said by
Vaughan Williams LJ and Buckley LJ in Liverpool Corporation v Chorley
Union Assessment & Withnell Overseers [1912] 1 KB 270. The Winstanley
case was concerned with a parson in whom the freehold of a burial ground
was vested, and the question was whether he had beneficial occupation of the
burial ground so as to be liable for the Poor Rate in respect of it. At the
foot of p 12 Lord Atkinson said: "That question, in my view, resolves
itself into the three questions following, namely: 1. Does the appellant occupy
this cemetery for which he is rated? 2.
If he does, is his occupation a beneficial one, that is, a thing of value? 3. What is the measure of that
value?" At p 14 he said this:
"It is quite true, no doubt, that the ownership of a hereditament does not
necessarily imply occupation for the purpose of rating, and a person or company
may be an occupier within the meaning of the statute of Elizabeth who has no
proprietary interest in the soil: Holywell Union v Halkyn Drainage
Co. But owners in possession are prima facie occupiers, unless it be
shown that the occupation is in some one else: per Buller J and Lord Herschell
in Holywell Union v Halkyn Drainage Co." In Liverpool Corporation v Chorley
Union Assessment & Withnell Overseers [1913] AC 197, Lord Atkinson
explained at p 208 that the passage that I have just read from the Winstanley
case was but a reproduction of what Lord Herschell LC had said in Holywell
Union v Halkyn Drainage Co [1895] AC 117 at p 121, which Lord
Atkinson described as a "guarded and limited proposition." What Lord Herschell had said, starting at the
foot of p 120, was this: "No doubt, if it could be shown that the respondent
company were the owners of the tunnel, this would negative the idea of their
being entitled merely to an easement, and being owners they would, prima
facie, be the occupiers; they would be so regarded unless the occupation
were shown to be in some one else."
In my judgment, neither Lord Herschell nor Lord Atkinson, nor indeed
Vaughan Williams LJ nor Buckley LJ, was saying other than this, that where all
that is known about a hereditament is that it is in use–that is to say, that it
is in some kind of occupation–then, in the absence of countervailing evidence,
the natural inference on the balance of probabilities is that it is the owner
who is using it. The language of none of these learned Lords or judges suggests
that in order to displace such an inference someone else must be shown to be in
occupation of the hereditament in such circumstances that he is rateable in
respect of it; they refer to occupation, not to rateable occupation, by someone
other than the owner.
There is only
one hereditament here, viz the factory, entered in the valuation list; if there
were concurrent uses by the company through its liquidator, and by the
committee or the occupying work force, each was a use of the whole factory. The
case is to be distinguished from one in which a servient tenement is subject to
an easement the exercise of which would necessarily involve the sole occupation
by the dominant owner of that part of the servient tenement which is affected
by the easement, a state of affairs which arose in the Holywell Union
case. The appellants say that if the hereditament is in actual use (that is to
say, not standing empty and altogether unused) and the use is beneficial to
someone (that is to say, not valueless to the user) somebody must be rateable
and that person must be the owner unless upon the facts somebody is in rateable
occupation. This postulates, as it seems to me, that if there is a beneficial
occupation, somebody must be rateable. This submission, in my judgment, is
untenable. If on the true view of all the relevant facts the owner is not in
actual occupation but someone else is, the owner cannot be the occupier, and if
he is not the occupier he is not liable under section 16 to be assessed.
Moreover, the postulate is I think unjustifiable; the person in actual
occupation may for some reason be exempt from rates. Is the owner to be
rendered liable to assessment because someone else who, rightly or wrongly, is
in exclusive occupation of his property is exempt? I think that suggestion has only to be made to
be rejected. Both the fact of occupation and the identity of the occupier are
questions of fact, to be answered on the evidence and the circumstances of the
particular case. There cannot, I think, be two occupiers for rating purposes at
one time of one hereditament. If a state of affairs arises in which two persons
are in occupation of what is listed as one hereditament for rating purposes,
each entitled to exclusive use for a particular purpose, the list must be
amended to show two hereditaments in order to enable the rating authority to
assess both occupiers. But if there are two persons, each of whom makes some
use of an immovable
occupier of each one of which may be rateable; or there may be two concurrent
uses of one hereditament, in which event it may be necessary to discover which
of them has the paramount position so as to be rateable as the occupier.
The Holywell
Union case provides a very good illustration of these two alternative
possibilities. In that case the Duke of Westminster had granted to the
defendant company, the Halkyn Drainage Co, what was described as "all such
easements in and through and right of drainage through and other exclusive
rights of using" a subterranean tunnel which was called the Halkyn Deep
Level, together with power to uphold, maintain, tend and repair that tunnel–the
terms of the grant will be found on p 121 of the report in the Lord
Chancellor’s speech. The Duke further granted to the defendant company full
right and liberty to construct and maintain under and through a certain area of
land further additional tunnels in connection with the Halkyn Deep Level. Both
those grants were expressed to be subject to certain rights reserved to the Duke.
The Lord Chancellor thought that these exceptions and reservations threw much
light on the effect of the grant and on whether all that passed by it to the
drainage company was a mere easement. The first right that was reserved to the
Duke was the right to all lead and lead ore which in the making or extending of
the tunnels and works should be found and discovered to be profitable. Then
there was a right reserved to the Duke and his assigns to use the Halkyn Deep
Level and the additional tunnels, if any, for searching for and working mines
and beds of ore lying under his land and for removing any ore obtained as a
result of those mining operations. Then, later in the deed, there was a
covenant by the drainage company that they would from time to time and at all
reasonable times allow the Duke and his assigns and his or their agents and
surveyors to go down, dial and measure all and every or any of the Halkyn Deep
Level and the tunnels and shafts and other works of the company. The Lord
Chancellor said this: "If the company were to have an easement only, and
were not to be in possession of the tunnels and works which they constructed,
and the Duke was to remain in possession of them, it is difficult to understand
why a covenant should be taken to ‘permit and suffer the Duke to go down, dial
and measure the tunnels and shafts’."
It was provided by the deed that the rights under the exceptions and
reservations should not be exercised except subject to the provisions of the
defendant company’s Act of Parliament and such by-laws as should from time to
time be in force under that Act.
On the facts
of that case it was held that, without deciding whether the defendant company
were the owners of an easement or some other interest in the Halkyn Deep Level
and the tunnels, they were entitled to exclusive use of the Halkyn Deep Level
and the other tunnels. Consequently, the result of the grant by the Duke was to
create a separate hereditament for rating purposes, the Halkyn Deep Level and
the tunnels being in a separate occupation from the land through which they
passed, of which the Duke was the tenant for life in possession and was in
occupation. Before reading what was said by the Lord Chancellor, I should say
that although there were two separate hereditaments, the land on the one part
and the tunnels on the other part, the tunnels were themselves the subject of
concurrent uses by the drainage company and by the Duke, for the Duke was
entitled to the reserved rights to which I have referred, and it is to that
that the passage I am about to read relates. At p 124 the Lord Chancellor said
this: "My Lords, it seems to me clear, therefore, that with regard to
these tunnels the rights of the respondents are paramount, and those of the
Duke are subordinate to them. Upon a careful consideration of the terms of the
deed of grant, I am unable to adopt the conclusion that it conferred upon the
respondents an easement or rights in the nature of an easement only. I think
that it gave them the possession of the tunnels of which they thus have the
exclusive use for purposes of drainage, and that such rights as remained in the
Duke were only those expressly reserved to him and which were subordinate to
those possessed by the company. If the possession thus became theirs, it is
quite immaterial to my mind for the present purposes whether they became the
owners or not." At p 125 the Lord
Chancellor said: "The question whether a person is an occupier or not . .
. is a question of fact; it does not depend on a legal title. A person legally
in possession may not occupy; on the other hand a person may be the occupier
either with or without the consent of the owner." He reached the conclusion, at p 126, that in
respect of the Halkyn Deep Level and tunnels, "On the true construction of
the deed the possession of the" (defendant company) "is paramount,
and any rights which the Duke has are subordinate. The" (company)
"alone have the right of using the tunnels for the primary purpose for
which they have been constructed. The Duke has no such right, and, in my
opinion, the respondents are in occupation of the tunnels and works." I say that that case is a good example of
what can result from concurrent uses because it exhibits both consequences
which may follow. It exhibits an instance of a case in which a separate
hereditament was created, namely the hereditament in the Halkyn Deep Level and
the additional tunnels; it also exhibits an example of what may happen when two
persons are concurrently using one hereditament in circumstances which do not
justify dividing it into two separate hereditaments. There it is necessary to
discover which of the two users is properly to be regarded as being in
occupation, which is to be discovered by investigating whose position is
paramount.
The appellants
contend that in the present case there were concurrent uses and that the
liquidator’s position was paramount, the concurrent uses, of course, being the
use of the factory for the purpose of housing the plant and machinery, and the
use of the factory for the purpose of conducting the printing business which
was being carried on by the committee or by the work force. This seems to me to
be inconsistent with the true state of affairs which existed during the
relevant period. The liquidator was wholly excluded from the works and was
denied access to the plant and machinery; the committee were in the fullest
possible sense in adverse possession–or, if not the committee, then the work
force. No doubt the liquidator could, by legal proceedings and after a lapse of
time, have recovered possession, but while he was out of possession he was in
no position to control in any manner or to any extent the factory or the plant
and machinery or to make any use of them: he was powerless. In such a situation
it is in my opinion impossible to describe the liquidator as having been in a
paramount position.
In Liverpool
Corporation v Chorley Assessment Committee in the Court of Appeal
[1912] 1 KB 270 Buckley LJ said at p 286:
The best
summary that I know of the law as to what constitutes occupation is to be found
in the words of Lush J in 1877 in R v St Pancras Assessment Committee:
"Occupation includes possession as its primary element, but it also
includes something more. Legal possession does not of itself constitute an
occupation. The owner of a vacant house is in possession, and may maintain
trespass against anyone who invades it, but, as long as he leaves it vacant, he
is not rateable for it as an occupier. If, however, he furnishes it and keeps
it ready for habitation whenever he pleases to go to it, he is an occupier,
though he may not reside in it one day in a year. On the other hand, a person
who, without having any title, takes possession of a house or piece of land,
whether by leave of the owner or against his will, is the occupier of it."
Buckley LJ
goes on:
The owner
need not be, and often is not, the occupier. The occupier need not necessarily
have any estate in the land. There may be occupation without the existence of
the relation of tenant
Drainage Co. But an owner in possession is prima facie occupier unless the
occupation is shown to be in someone else; per Buller J in R v Mayor
of London; per Lord Herschell LC in Manchester, Sheffield &
Lincolnshire Railway Co v Doncaster Union Assessment Committee; Holywell
Union Assessment Committee v Halkyn Drainage Co. The intention of
the alleged occupier is a governing factor in determining whether rateable
occupancy is established: per Blackburn J in Allan v Liverpool; R
v Melladew. R v Mayor of London is not an authority for the proposition
that a person who can bring trespass is necessarily in occupation. But it is an
authority for the proposition that a person who can bring trespass and who is
receiving profit or benefit from the property is in occupation if no one else
is.
Here the
committee could have sued anybody other than the company for trespass in the
factory, and they were in beneficial occupation of the factory. They were using
it for the purpose of a printing business which they were carrying on there. It
is common ground that beneficial occupation need not be profitable occupation.
So they, or maybe the work force and not the committee, were in occupation
unless the liquidator was. But on the facts, in my opinion, the liquidator
manifestly was not.
At this point
I should perhaps say something about two fairly recent decisions in the
Divisional Court of the Queen’s Bench Division, Andrews v Hereford
Rural District Council (1963) 10 RRC 1, and Liverpool Corporation v Huyton-with-Roby
Urban District Council (1964) 10 RRC 256.
In the earlier
of those two cases the appellant, Mr Andrews, was the owner of a farm which
included a fenced-off 5-acre patch which consisted of a gravel pit. No use was
made of the gravel pit for agricultural purposes. Mr Andrews agreed with a
company that the company should work this pit under a licence from him, but he
reserved various powers of controlling the manner in which the company should
work the pit. The licence which he granted was not an exclusive licence; he did
in fact subsequently allow others also to take gravel from the pit. The
question was whether, in these circumstances, Mr Andrews was rateable in
respect of the gravel pit, or not. It was, I suppose, in a sense a case of
competing occupations, for the gravel company had certain rights over the
gravel pit; but those rights, as it seems to me, were in the nature of a profit
only–incorporeal rights; and incorporeal rights do not attract liability to
rates unless the exercise of those rights requires that the owner of them
should in fact have exclusive occupation of the land over which the rights are
exercisable, and in this case the rights granted to the gravel company did not
involve such an occupation. As I say, others were allowed to take gravel and
the owner himself retained a measure of control over the way in which the
gravel pit was used. Lord Parker CJ said this at the foot of p 7:
For my part I
approach the matter in this way. Here is an owner of land, a farm, which
includes this gravel pit. Accordingly, he has legal possession of the gravel
pit. He can, I think, properly be said to be in occupation of the gravel pit.
Prior to the first working that was not a rateable occupation because no use
was being made of it. But the moment, as it seems to me, the owner enters into
an agreement whereby that gravel pit is to be worked and will produce profit to
himself then, prima facie, he becomes the rateable occupier unless he
can show that he has entered into some agreement with a third party, in this
case the company, under which agreement the company fulfils the four tests of
rateable occupation.
The reference
there to "rateable occupation" in the closing words of the passage I
have read, as distinct from mere occupation, does not seem to me to have
constituted part of the Chief Justice’s ratio decidendi in this case;
nor from the judgment does it appear to have been a feature of counsel’s
argument. Indeed, the word "rateable" almost seems to have slipped in
unnoticed. Had the gravel company had the right of exclusive occupation of the
pit for the purposes of extracting gravel, they would have been rateable in
respect of it as a separate hereditament, and I think this may have influenced
the Chief Justice’s thought, and his mode of expression, in the passage I have
read. In my judgment, he should be regarded as having spoken in the context of
the facts of that particular case, and I would not myself accept that case as
authority for the view that to displace the liability to rates of an owner it
must be shown that somebody else is in rateable occupation.
In the latter
of the two cases, Liverpool Corporation v Huyton-with-Roby Urban
District Council, it is apparent from the judgment of the court that the
court was not referred in detail to the authorities. Widgery J, as he then was,
who delivered the first judgment, said at p 260: "There is of course a
wealth of authority on the subject, but counsel have not found it necessary to
refer us to cases; they have contended themselves with references to a number
of passages in the edition of Ryde to which I have referred." The effect of the cases seems to have been
largely taken from what was stated in Ryde and consequently, as a result
of this, in my view Widgery J, at p 262, misstates what Lord Atkinson had said
in the Winstanley case. What Widgery J said was this:
When one
comes to look at the facts of the present case, it is, I think, perfectly clear
that the fairground proprietor was not in rateable occupation, because his
interest in the land at the period of his enjoyment of it was far too transient
to satisfy the fourth of the four ingredients for rateable occupation to which
I have referred. For my part I feel quite satisfied that the justices had no
alternative but to find that the fairground proprietor was not in rateable
occupation. When one turns to consider the position of the appellants, one is,
I think, entitled to follow what Lord Atkinson said in the Winstanley
case, and apply a presumption that an owner is in rateable occupation if he
derives benefit from his ownership, and no other person is shown to be in
rateable occupation.
He appears to
have treated ownership as the basis of a presumption of a special kind,
particularly applicable to rating law. Speaking for myself, I would take the
view that it is no more than a feature of the facts of any particular case to
be taken into account with all other relevant facts in determining, on an
overall view, who is in actual occupation. While I think that the case of Liverpool
Corporation v Huyton-with-Roby Urban District Council may have been
properly decided on its facts, I consider, with deference to Widgery J, that he
was mistaken in treating ownership, as he appears to have done, as giving rise
to any presumption of occupation by an owner, beyond the limited scope of a
"presumption of fact," which reduces the significance of ownership to
that of one of the circumstances of the case to be taken into account in
deciding who, on the balance of probabilities, is in actual occupation.
The appellants
say that the liquidator was in occupation, by reason of the fact that the plant
and machinery were housed in the factory, and that he would have stored the
plant and machinery there until sale if there had been no work-in; but the
evidence does not in my view establish that the liquidator would necessarily have
kept the plant and machinery there. The plant and machinery were there, not in
consequence of any decision of the liquidator, but because of their forcible
detention in the factory by the committee, or by the work force: nor were the
plant and machinery being stored in the factory; they were being wrongfully
used there by the committee or the work force.
The learned
judge in the course of his judgment relied on a passage in Ryde on Rating,
13th ed, p 27, as follows: "Occupation is exclusive if the occupier can
exclude all other persons from using the land in the same way as he does;
occupation does not cease to be exclusive because other persons use the land in
some other way, for their different uses may make them separately rateable.
Exclusive occupation can
the land, albeit not in pursuance of an exclusive right or title, is such that
it in fact excludes others from using the land for the same purposes.
Occupation is not exclusive if it is subject to the overriding control and
direction of another." Slade J goes
on: "Notwithstanding Lord Colville’s submission that this represents too
unsophisticated an approach, it seems to me that where, as in the present case,
the owner of a building is wrongly excluded from it by trespassers, who
thenceforth over a period of several months continuously remain in and retain
control of the building to the entire exclusion of the owner, the trespassers
have actual and exclusive occupation of the building within the meaning of the
rating cases over the relevant period, but the owner does not." With that statement I entirely agree. In the
last three centuries there must have been innumerable occupiers of property who
have been rated in respect of such property notwithstanding that they had no
legal title. The fact that the work-in were actively defiant trespassers cannot
make them any less rateable than they would have been if their lack of title
had been less ostentatious; indeed, it is in my judgment clear from R v Bell
(1798) 7 Term Reports p 598, where the defendant was, I think, undoubtedly a
trespasser, that a trespasser is rateable in respect of his wrongful occupation
of another’s land. Lord Kenyon, CJ, said this: "If a disseisor obtains
possession of land, he is rateable as the occupier." Reference was also made in this connection to
Kittow v Liskeard Union (1874) LR 10 QB 7, a decision in the
Queen’s Bench Divisional Court.
So far as
beneficial occupation is concerned, the fact that the use of the hereditament
by someone other than the owner may incidentally benefit the owner cannot in my
judgment clothe the owner with beneficial occupation unless on the facts he is
in occupation, and in the present case, as I have stressed, the liquidator had
been excluded from occupation. I do not think the circumstances are such that
it can be said that the company, the owner, was vicariously in occupation
through the representation of the committee or of the work force, who had
forcibly excluded the company, by its liquidator, from the factory. On these
grounds I would hold in this case that the evidence has established that the
company was not, during the relevant period, in occupation of the factory, and
consequently that the company was not rateable during that time in respect of
the factory.
That is
sufficient to dispose of this appeal, but in case the matter should ever go
further, I think I should make some reference to a point which has been raised
by the respondents in their respondents’ notice. This point has not been
presented in this court in quite the same way as it was before the learned
judge. The learned judge said this in his judgment, at p 34 of the transcript:
Nor do I need
to express any concluded view on the submission which Mr Nicholls put forward
as an alternative to his principal submission that the company and the
liquidator were not in occupation. This alternative submission was that the
members of the work-in committee themselves fulfilled all the four essential
elements of rateable occupation and were in rateable occupation. I should
record in passing that the council has given me an assurance that in the event
of my finding that the committee were in rateable occupation for the whole or
any part of the relevant period, the council would not raise or seek to raise a
separate assessment against the committee or any member or members thereof in
respect of the period so found. Accordingly, even though the committee does not
appear before me, there would no no procedural objection to my finding that it
was in rateable occupation. I am inclined to think, however, that the evidence
before me does not clearly establish that any named individuals or individuals
capable of ascertainment were in occupation of the factory for any specific period
or periods. For all that I know, in view of the shift system that was operated,
it is possible that no single member of the work-in or of the committee was
physically present in the factory during the relevant period for more than very
short transient periods of time. Furthermore, though I accept that it is
theoretically possible that the members of the committee could be rateable. I
doubt whether there is sufficient evidence before me showing how this committee
was constituted or what it actually did, to justify any conclusion that its
members have become liable to rates. I am inclined to think that the evidence
goes no further than to show that a fluctuating body of trespassers, organised
by a committee of which not much is known, proceeded to occupy the factory over
the whole of the relevant period to the entire exclusion of the liquidator.
In this court
Mr Nicholls has not confined his submission to saying that the committee was
the body in rateable occupation of the factory; he says that the evidence is
sufficient to establish that members of either the committee or the work force
were in rateable occupation throughout the relevant period. The evidence is not
very clear, or full, upon this aspect of the case. That is not surprising
because the liquidator was, as I have said, entirely excluded from the factory;
he knows little about the way in which the committee was set up or who may have
been its members from time to time, or who may have been working in the factory
from time to time. Nor, of course has the rating authority any knowledge, or
any direct knowledge, of these matters. But it seems to me that the evidence is
sufficient to lead to a conclusion on the balance of probabilities that there
were at least some members of the committee who were members of that body
throughout the relevant period, and that there were a considerable number of
employees who were working at the factory throughout the whole of the relevant
period. Mr Nicholls has stressed that where there is joint occupation of a rateable
hereditament, every joint occupier is severally liable to be rated for the
whole of the relevant amount of the rate on the hereditament. It is therefore
irrelevant that some of the workers, who started working when the work-in
began, dropped out before the factory was eventually sold. It appears to be the
fact that the work force decreased in numbers, I think from 150 at first to
something like 80 towards the end. The evidence indicates that it is probable
that there were at least three or four members of the committee who were
members throughout the whole period.
For my part I
would be prepared to reach the conclusion upon the evidence that somebody was
in rateable occupation of the factory, other than the company, during the
relevant period, but that there is insufficient evidence to identify who that
person was, or who those persons were. But I should be prepared to hold, if it
were necessary for the disposal of this appeal, that upon the evidence it is
clear that there was somebody, or there were some people, other than the
company, who were in rateable occupation of the factory throughout the relevant
period, and that would operate to rebut Mr Glover’s suggested presumption, if
there is such a presumption. But perhaps I might close my judgment by saying
that in my view no such presumption exists, unless it be purely a presumption
of fact, that is to say, an inference which can be drawn from the fact that the
owner is the owner of the property, when there is nothing to indicate that he
is not the person in occupation of it: but that is merely a circumstance which
has to be taken into account in conjunction with all the other relevant
circumstances of the case, and the question who is in occupation has to be
answered as a question of fact in the light of all those relevant
circumstances. For this reason I would dismiss this appeal.
SCARMAN LJ
said: I am content to express my complete agreement with the judgment of
Buckley LJ; I also would dismiss the appeal.
SIR JOHN
PENNYCUICK said: I am in complete agreement with the judgment of Buckley LJ; I
hope I shall be forgiven if I express my conclusion shortly in my own words.
This case
raises a single issue under section 16 of the General Rate Act 1967. The
occupier of any specified des-
comprising that property. Was the company by its liquidator in occupation of
the factory during the relevant period?
This is the first of the four ingredients of rateable occupation as set
out by Tucker LJ in the case of John Laing & Son Ltd v Kingswood
Assessment Committee: "First, there must be actual
occupation." I am in no doubt that
this first ingredient, that is to say, actual occupation, denotes occupation by
the person sought to be rated. The question: "Was the liquidator in
occupation?" is to my mind a
straightforward question of fact. The judge, in his admirable judgment, has
answered it in the negative, and he had ample evidence on which to reach that
finding. Indeed, I think any other finding would have been so contrary to the
weight of evidence that it could not have stood. I add at this stage that the
judge was in my view also right in finding that the work-in committee were in
actual occupation.
I am not
persuaded on the evidence that there was any sort of combined occupation by the
work-in committee and the liquidator: on the contrary, the liquidator was
wholly excluded from the factory building and also from the machinery in it,
and it is beside the point that the liquidator may have derived some measure of
advantage, incidentally much more than offset by the disadvantages, from the
storing of the machinery.
Nor is it
possible that there should be concurrent occupation of a hereditament in the
sense of a single hereditament, a single physical unit of property, being
regarded as two hereditaments occupied by one person for one purpose and by
another person for another purpose. If two persons have each some interest in
possession of the same hereditament, one must ascertain whose interest is predominant
so as to constitute occupation by that person. Here, however, the occupation by
the work-in committee was exclusive. The position is quite different where a
single hereditament, a single physical unit of property, is split into two
units, so that each of those units comes to form a distinct hereditament–for
instance, telephone wires attached to a house. There could be no question here
of distinct physical units in the factory subsisting side by side.
The main
ground upon which counsel for the rating authority based their argument was
expressed in these terms: there is a presumption that the owner of property is
in exclusive occupation unless someone else is in rateable occupation of it. In
my judgment no such presumption exists. The true statement of the law in this
respect is that contained in the speech of Lord Atkinson in the case of Winstanley
v North Manchester Overseers [1910] AC 7, at p 14: "But owners in
possession are prima facie occupiers, unless it be shown that the
occupation is in somebody else."
Nowhere is there reference to rateable occupation. That statement, which
has been frequently cited, and applied, as I read it simply sets out the prima
facie inference to be drawn where a property is occupied and no one other
than the owner can be shown to be the occupier. In such circumstances the prima
facie inference is that the owner should be regarded as being in
occupation. It is an inference, or presumption, which can be rebutted by
evidence that the owner is not in fact in occupation.
The
presumption formulated by counsel is derived from the judgments of the
Divisional Court in the two cases of Andrews v Hereford Rural
District Council (1963) 10 RRC 1, and Liverpool Corporation v Huyton-with-Roby
Urban District Council (1964) 10 RRC 256. I quote a few words from the
judgment of Widgery J, giving the judgment of the court in the latter case:
"When one turns to consider the position of the appellants, one is, I
think, entitled to follow what Lord Atkinson said in the Winstanley
case, and apply a presumption that an owner is in rateable occupation if he
derives benefit from his ownership, and no other person is shown to be in
rateable occupation." The word
"rateable" has crept twice into that sentence; where the word
"rateable" appears the second time, that is to say, ". . . no
other person is shown to be in rateable occupation," it would seem to me,
with all respect to the Divisional Court, that the word ought not to be there.
It is not to be found in any of the earlier cases; nor is it to be implied from
any statutory provision; and it radically alters the sense of the earlier
statements. It is easy to understand how the word "rateable" may have
slipped into the judgment. I have no doubt that the first decision was correct
on its facts; I have some doubt as to whether the second decision was correct
on its facts. Once the presumption is properly understood, it is irrelevant in
the present case whether all or any of the members of the work-in committee
should or should not be held to have been in rateable occupation; they were in
occupation certainly and I would, if that question ever became material, answer
it in the affirmative, for the reasons given by Buckley LJ.
On the view
which I take, no question arises as to the remaining ingredients specified in
the John Laing case.
I would
dismiss the appeal.
The appeal
was dismissed with costs. Leave to appeal to the House of Lords was refused.
